The amendments improve the procedure of transactions between related parties of the company and also provide a modified definition of the term „related party“.

All the transactions of the company with the related parties must be approved by the company's supervisory council, or, in the absence of such entity, with the meeting of the shareholders. Also, the board of the company is required to provide information to the members of the supervisory council about the related party, the necessity of the transaction, the terms of the transaction, as well as an assessment of the impact of the transaction on the company's business activities, financial situation and influence on the shareholders of the company that are not related parties.

If failing to comply with the required procedure, the transaction between the company and its related party is to be considered null and void. A person whose interests have been affected by the transaction may request a declaration of invalidity of the transaction.

Read more details about the subject on our Latvian webpage: http://leinonen.lv/news/news-2017/new-regulation-regarding-transactions-between-related-parties