Requirements for associations and foundations: remote meetings, compulsory liquidation and audit conditions

Amendments to the Law on Associations and Foundations (available) entered into force in summer 2024. Additionally, amendments to the Cabinet of Ministers Regulations regarding the Procedure for the Preparation of Annual Reports of Associations, Foundations, and Trade Unions (available) entered into force on 28 January 2025. 

These amendments modernise the procedures for conducting general meetings of members, impose new requirements for the execution of Articles of Association, and introduce a novel provision for the compulsory liquidation of associations or foundations. Consequently, associations and foundations are strongly advised to ensure their compliance with the updated legislative requirements. 

Principal amendments to the existing regulatory framework: 

1. Associations and foundations have the possibility to provide in their Articles of Association that members can participate and vote in general meetings remotely or organise fully remote meetings, ensuring identification of members and transparency of vote counting. 
2. The Articles of Association of associations and foundations must specify the purpose of the association or foundation, as well as the field of its activities in accordance with the classification established by the Cabinet of Ministers. The mandatory requirement to state its field of activity or classification also applies to the management report of the association/foundation to be submitted together with the annual report. 
3. Associations and foundations may be compulsorily liquidated on the basis of decisions of the Register of Enterprises of the Republic of Latvia or the State Revenue Service in the following cases:
   • the association or foundation cannot be reached at its registered address; 
   • the Management Board of the association or foundation has no representation rights for more than 2 years; 
   • the association or foundation has not submitted its annual report within the time limits laid down by law. 
4. The annual reports of an association or foundation must be audited by an audit body composed of at least one member of the board with an understanding of accounting or auditing matters if the turnover of the association or foundation from economic transactions exceeds EUR 1’200 but is less than EUR 1’000’000 per year. However, if the turnover in the accounting year exceeds EUR 1’000’000, the annual accounts must be audited by a certified auditor. In addition, the requirements for the preparation and submission of audit documents and deadlines to the State Revenue Service have been clarified. 

Please contact our experts, Partner Gatis Flinters and Senior Associate Marija Berdova, with any further questions.