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Trademark after dissolution of a company: is it possible to restore a company in Latvia?

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The next aspect of the topic on dissolved company’s trademarks, is connected with the question whether it is possible to restore the Latvian legal entity if, after its liquidation, it becomes clear that it has undivided property, for example, a trademark that was overlooked by the liquidator during the liquidation procedure.

Yes, "restoration" is possible. The company shall be recognized as dissolved and removed from the Commercial Register by the Decision of the Register of Enterprises of the Republic of Latvia adopted at the request of the liquidator and on the basis of the attached documents, including a Plan for the division of the remaining property (see Art. 14 of the Law on the Register of Enterprises of the Republic of Latvia). The decision of the Register of Enterprises is an administrative act that can be disputed to the Chief Notary of the Register of Enterprises by a submission regarding the disputing of an administrative act. If, following the disputing, the decision is revoked, the legal status and legal capacity of the company, in fact, will be restored.

However, the revocation of the Decision of the Register of Enterprises on the removal of a legal entity from the Commercial Register (hereinafter - the Decision) is associated with certain specific terms.

Firstly, to revoke the Decision, the Register of Enterprises must recognize that the overlooked property is a sufficient basis for revocation of the Decision. The Administrative Procedure Law of the Republic of Latvia (Article 75) provides an exhaustive list of situations when the disputing is possible, namely, in case of an unclear administrative act, procedural error or mistakes regarding substance. Procedural error is the result of non-compliance with the Administrative Procedure Law or other rules governing the issuance of the relevant administrative act, in this case, the provisions of the Law on the Register of Enterprises of the Republic of Latvia. Mistakes regarding substance take place when the substance of an administrative act is in conflict with the rules or the institution has incorrectly applied the rules (or has relied upon erroneous facts), or it has not observed the hierarchy of the legal force of rules or has erred regarding considerations of usefulness. However, a notary of the Register of Enterprises is not obliged to check the actual circumstances of the liquidation of the company, including the company’s property to be divided. It means that all company’s property shall be listed in the documents submitted by the liquidator. In accordance with the Commercial Law (Article 330, parts 1 and 5), the remaining property of the company shall be divided among the shareholders in accordance with the plan for division of the remaining property prepared by the liquidator, in proportion to the shares owned by each shareholder, if the founding documents do not specify otherwise. At the same time, the liquidator may not sell property if it is not necessary for satisfaction of the claims of creditors and if it is specified in the decision on the termination of the activities of the company. Thus, if the fact of not including the company’s property in the initial plan for division of the remaining property submitted by the liquidator is recognized by the Chief Notary  of the Register of Enterprises as a procedural error or mistakes regarding substance, this may be the basis for revocation of the Decision.

Secondly, the time limit for disputing the Decision is limited. A submission regarding the disputing can be presented to the Chief Notary of the Register of Enterprises within 30 days from the date the Decision enters into force (Administrative Procedure Law, Article 75). If a trademark overlooked during the liquidation process, which could take up to three years, the likelihood of revealing the trademark registered in the name of the dissolved company within 30 days after the liquidation of the company is also low. The term for disputing the Decision may be restored if the procedural term was missed due to good reasons (Administrative Procedure Law, Art. 48) and the Chief Notary of the Register of Enterprises finds the evidence of such reasons convincing.

After the Decision is revoked, the liquidator will have the opportunity to dispose the trademark under the rules of the liquidation process of the company.

Thus, the procedure for “restoration” of a company provides for the compliance with specific requirements and is associated with the risk that the grounds for revocation of the Decision to remove the company from the Commercial Register or for restoring the term (if applicable) are found insufficient. However, it can be concluded that in comparison with the actions that must be taken to obtain the property, e.g., the trademark,  without heirs from the State, the procedure of “restoration” of the has a greater advantage, since the company does not lose control of the trademark.

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