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The Saeima
1 has adopted and the President
has proclaimed the following law:
ASSOCIATIONS AND FOUNDATIONS LAW
Division A. General Provisions Chapter I. Basic Regulations

Section 1. Purpose of the Law (1) The purpose of this law is to promote the activity of associations and foundations
and their long-term development, and to suppor t the strengthening of a democratic civic
society. (2) This law shall regulate the basic principles of the activity of associations and
foundations, their organisational struct ure, liquidation and reorganisation. Section 2. Concept of associations and foundations (1) An association is a voluntary organisation of people, which is founded to achieve
the objective set out in its articles of associati on, which is not of a profit gaining nature. (2) A foundation or fund is a body of assets which has been set aside to achieve the
objective determined by the founder, and whic h is not of a profit gaining nature. Section 3. Legal status of associations and foundations An association or a foundation ga ins status as a legal person at the time it is entered into
the register of associ ations and foundations. Section 4. Liability delimitation fo r associations and foundations (1) An association or foundation is liable for all its obligations with all of its assets.

1 The Parliament of the Republic of Latvia

(2) An association is not liable for the obligations of a member. A member is not liable
for the obligations of the association. (3) A foundation is not liable for the obligations of its founder. The founder is not liable
for the obligations of the foundation. Section 5. Legal address of an association or foundation (1) The legal address of an association or foundation is the address which is entered
into the register of associations and foundations. The institution of the register of
associations and foundations shall be notified of a change of the legal address. (2) If information, documents or other correspondence is sent to an association or
foundation at the legal address registered at the register of associations and foundations,
it shall be deemed that the association or foundation has received such documents,
information or other correspondence on the se venth day if the sender has proven that
such sending has taken place. Section 6. Name of an association or foundation (1) The name of an association or foundation shall not be in contradiction to legislative
enactments and good morals, i.e., it shall not contain the name of a military group or of
an organisation or group which is recognised as criminal or anti-c onstitutional, it shall
not show a positive attitude towards violence etc. (2) The name of a foundation shall contain the word “nodibinajums” [foundation] or
“fonds” [fund]. (3) The name shall clearly and definitely di ffer from the names of associations or
foundations already registered or signed up in the register of associations and
foundations. (4) Only the letters of the Latvian or Latin alphabet shall be used in the name of an
association or foundation. (5) The name shall not contain misleading in formation about the objective, type of
activity or legal form of th e association or foundation.

(6) The name of an association of foundation shall not include the names of local
government institutions or the word s “state” or “local government”. (7) An association or foundation whose rights have been infringed upon by illegal use
of its name may demand from the infringer to stop using the name, and to compensate
the association or foundation for the losses incurred by the illegal use of its name. Section 7. The right of associations and foundations to carry out busine
ss
operations (1) An association or foundation has the right to carry out business operations in the
form of supplemental activities, which are related to maintaining or utilising its assets,
and to carry out other business operations in order to achieve the objectives of the
association or foundation. (2) The income of an associ ation or foundation may be used only for the achievement
of the objective set out in the articles of association. The profit which is gained from the
business operations that the association or foundation has carried out, shall not be
divided amongst the members of the associ ation or the founders of the foundation. Section 8. Volunteer work (1) Associations and foundations have the ri ght to engage persons in volunteer work.
Volunteer work shall be considered to be work or services provided without pay, which
is carried out by a natural pe rson who does not enter into legal employment relations
with the association or foundation, and which is directed at achieving the objective of
the association or foundation as set ou t in its articles of association. (2) At the request of a person, a written agreement may be entered into regarding
volunteer work, setting out the work to be done and timeframe for performing it. (3) A person carrying out volunteer work ma y request compensation for such expenses
as are incurred during the performance of the volunteer work, if this is set out in the
articles of association or board decisions of the association or foundation.

(4) An association or foundation is liable for harm caused to a person during the
performance of volunteer work if it has taken on such a responsibility or if the harm has
been caused due to the fault of the association of foundation. Section 9. Payment for activities in an association or foundation If a person receives payment (remuneration) for activity in the association or
foundation, this payment (remuneration) shall be set in conformity with the relevant
person’s scope of duties and the financial s ituation of the association or foundation. Section 10. Public activities (1) In order to achieve the objective set out in the articles of association, an association
or foundation has the right to carry out activities which are not contrary to law,
especially to freely distribute informa tion on its activities, create its own press
publications and other mass media, organise meetings, marches and demonstrations,
and other public activities. (2) In regard to questions relating to the obje ctive of the activities of an association or
foundation, the association or foundati on may ask state and local government
institutions, and may go to court and defend th e rights or legally protected interests of
its members. Section 11. Prohibition to create armed or militarised units An association or foundation is prohibited from arming its members or other persons, to
organise military training for them or to create militarised units. Section 12. Laws which regulate the acti vity of other not-for-profit entity
associations and foundations The activities of political parties, religi ous organisations, trade unions, professional
organisations, and their associations, who ar e the autonomous subjects of public law,
and the activities of public foundations (f unds) shall be regulated by other laws.

Chapter II. Registration of Associations and Foundations

Section 13. Recordkeeping of the register of associations and foundations (1) Information on associations and foundations is recorded in the register of
associations and foundations (hereafter –“register”). (2) The register is kept by a state instituti on (hereafter –“register institution”) which is
authorised by law to do so. Section 14. Accessibility of the register (1) Everyone has the right to access the records of the register and the documents
submitted to the register institution. (2) After submitting an appropriate written a pplication and paying a state fee, everyone
has the right to receive an information statem ent of the records of the register, and an
extract or copy of a document in the register files. At the request of the receiving party,
the correctness of the extract or copy shall be certified by the signature of an official of
the register institution and stamp, showing th e date of issue. Information on personal
identity codes of board members, liquidators and administrators shall be issued by the
register only if the person can jus tify the reasoning of their interest. (3) At the request of the receiving party, an official of the register institution shall
provide a statement that a specific record in the register has not been altered, or that a
specific entry has not been r ecorded in the register. Section 15. Information to be entered into register The following information shall be entered into the register: 1) the name of the association or foundation; 2) the legal address of the association or foundation; 3) the objective of the association or foundation;

4) the date of the founding decision and when the articles of association were signed; 5) the name, surname and personal identity code of the board members, indicating
whether they have the right to represent the association or foundation separately or
together; 6) the time of operation for the associat ion or foundation if the association or
foundation is founded for a period of time; 7) information about the prohibition of public activities or other activities, termination
or continuation of activities of the association or foundation, and insolvency,
liquidation and reorganisation of the association or foundation; 8) information on the appointment of a liqui dator, indicating his or her name, surname
and personal identity code; 9) information on the appointment of an admi nistrator in an insolvency case, indicating
the name, surname and personal identity code of the administrator; 10) the date the entry is made; and 11) other information as provided for by law. Section 16. Documents to be submitted to the register institutions and their
maintenance (1) Documents which justify entries to be ma de in the register (Section 15) and their
amendments, and other documents as speci fied by law (Section 52, Paragraph three;
Section 95, Paragraph four; and Section 102) shall be submitted to the register
institution. The original or an appropriately certified copy of the document shall be
submitted. Public documents which have been issued abroad shall be legalised in the
procedure set out in international agreements , and a notarised translation into Latvian
shall be attached to them. (2) At the request of the regist er institution, the association shall provide information on
the number of its members.

(3) The documents submitted to the register institution shall be kept in the file of the
relative association or foundation, if on their basis an entry has been made in the
register. Section 17. Making an entry in the register (1) An entry is made in the register on the basis of an application or court decision. The
application forms shall be approved by the Cabinet. (2) An application to enter an association into the register shall be signed by all
founders or at least two persons authorised at the founding meeting; to enter a
foundation (fund) into the regist er – all founders; and in regard to a foundation based on
a will – the executor of the will, heir or guardian. (3) The decision to make an entry in the register, a refusal to make an entry or
postponement of making an entry shall be made by a register institution official within
seven days of receiving the application. Within the same period of time, a register
institution official shall take a decision rega rding making an entry in the register on the
basis of a court decision. (4) A decision to postpone making an entry shall be taken by a register institution
official if: 1) in drafting the articles of association or in selecting a name, the requirements of this
law or other laws have not been taken in to consideration; or 2) all documents, as required by law, have not been submitted. (5) A decision to refuse to make an entry sh all be taken by a register institution official
if: 1) the objective set out in the articles of association is in contradiction to the
Constitution, laws or other international agreements binding to Latvia; 2) the procedure for founding an associati on or foundation as set out in this law has
been breached; or

3) after a decision to postpone making an entry has been taken, the shortcomings in the
articles of association of the name have not been eliminated within the set period of
time. (6) A decision to refuse to make an entry in the register or to postpone the entry must
be justified. If a decision to postpone making an entry is made, a period of time shall be
set to eliminate the shortcomings. (7) A register institution offici al shall send the decision ment ioned in Paragraph three of
this Section to the applicant within three days of the day the decision is taken. (8) The applicant has the right to contest and appeal the decision of the register
institution official in accordance w ith procedures proscribed by law. (9) The entry shall be made in the register on the same day when the decision is taken
to make the entry. Section 18. Certificat e of registration (1) After the associa tion or foundation is registered in the register, a certificate of
registration shall be issued which is issued and stamped by a register institution official. (2) The certificate of registration shall contain: 1) name; 2) registration number; 3) place of registration; and 4) date of registration. Section 19. Deletion of an association or foundation from the register An association or foundation is dele ted from the register based on: 1) an application from the liquidator of the association or foundation;

2) an application from the administrator of an insolvent association or foundation; 3) an application from the association or foundation to make a reorganisation entry; or 4) a court decision. Section 20. State fee (1) A state fee shall be paid for making an entry in the register, the amount of which
shall be determined by the Cabinet. (2) A state fee in the amount set out in legi slative enactments shall be paid for the
issuing of an extract from the register or an extract or copy of a document from a
register file. (3) A state fee for an entry in the regist er, for issuing an extract or copy, or for
providing information shall not exceed the administrative costs related to taking a
decision regarding registration and making the appropriate entry, or for searching for a
document or information, processing it and copying it. Section 21. Time period to provide information Information on the basis of which new entries in the register are made and documents
required by law shall be submitted to the register institution within 14 days of the
relevant decision being taken, if not otherwise specified in this Law. Section 22. Liability for providing false information to the register institution The relevant persons shall be held liab le according to law for providing false
information to the register institution.

Division B. Associations
Chapter III. Founding an association

Section 23. Founders (1) The founders of an association may be natu ral or legal persons, or partnerships with
legal status. (2) The number of founders may not be less than two. Section 24. Decision to found an association (1) In order to found an association, the founders shall take a decision to found the
association. (2) In the decision to found the association shall be indicated: 1) the name of the association; 2) the objective of the association; 3) the name, surname and personal identity c ode of the founders, and for a legal person
or partnership — the name, registration number and legal address; 4) the rights and responsibilitie s of the founders if the founders have agreed on such; 5) the authorisation (if such is given) to individual founders to sign the articles of
association and application for the register institution; and 6) other information which the f ounders consider to be necessary. (3) After the decision to found an associati on has been taken, the founders approve the
articles of association, elect the associat ion’s executive body (hereafter “board”), which
may be collegial or consist of one person, and other bodies if such are pr
ovided for in
the articles of association.

(4) The decision to found an association is prepared in written form, and it is signed by
all the founders of the associ ation. The decision may be si gned on behalf of a founder
by a person authorised by him, who has part icipated in the taking of the decision. A
written authorisati on shall be attached to the decision. Section 25. Articles of asso ciation of an association (1) The articles of association of an a ssociation shall be prepared in writing. (2) The articles of association shall indicate: 1) name of the association; 2) objective of the association; 3) term of operation of the association (if the association is founded for a certain period
of time); 4) prerequisites for members to join or leave the association; 5) rights and responsibilities of the members; 6) procedure by which the rights and responsibil ities of territorial and other units of the
association (if such are f ounded) shall be determined; 7) procedure for calling a genera l meeting and taking decisions; 8) name of the executive body, and its numerical composition, denoting the rights of
the members of the executive body to represen t the association individually or together;
and 9) structure of the auditing body of busine ss and financial operations, procedure for
elections, competence, procedure for taking decisions and term of office, or the
procedure by which a sworn auditor is appointed and terms authority.

(3) The articles of association may provide for other regulations which are not in
contradiction to the law. If the articles of association are in contradiction to the law, the
provisions of the law shall be applicable. (4) The articles of association shall be signe d by all founders or at least two of their
authorised representatives, and the date of approval shall be indicated in the articles of
association. Section 26. Application for an associat ion to be entered in the register (1) The founders shall submit an application to the register institution to enter the
association in the register. The application shall indicate the information mentioned in
Section 15, Clauses 1-6 of this Law. (2) Attached to the ap plication shall be: 1) decision to found the association; 2) articles of association; and 3) list of board members. (3) The application shall be signed by all founde rs or at least two of their authorised
representatives. Section 27. Liability for obligations which have come about before the association
is registered in the register (1) A founder, who has acted on behalf of the association to be founded before the
association is registered in the register is liable for obligations which have arisen from
these actions. If several founders have acted on behalf of the association to be founded,
they shall be jointly liable. (2) The obligations mentioned in Paragraph On e of this Section shall be transferred to
the association from the time it is registered in the register if the founders had the right
to act on behalf of the a ssociation to be founded.

(3) If a founder did not have the right to act on behalf of the association, the obligations
which have arisen from such actions shall be transferred to the association if a general
meeting definitely approves such obligations.

Chapter IV Members

Section 28. Minimum number of members (1) An association shall consist of at least two members if the articles of association do
not provided for a larger number of members. After the association is registered in the
register, the founders of the a ssociation gain the status of members of the association. (2) Each association shall keep a register of its members which shall indicate the name,
surname, personal identity code and home a ddress (name and address of a legal person)
of each member. Information about members of the association shall be accessible only
to the members of the relevant associati on, and to controlling and law enforcement
institutions. Section 29. Membership in an association (1) The board shall take a decision for a member to join an association, unless
otherwise provided for in the articles of association. (2) If the board or other body (except a general meeting), responsible for the joining of
members, shall take a decision to refuse to accept a member, the person, who wishes to
become a member, has the right to request a review of the matter according to the
procedure provided for by the articles of association. (3) Responsibilities for members shall be determined only in accordance with the
procedure provided for by the articles of association. (4) A member’s participation in an association shall not be transferable to a third party
or inheritable unless otherwise provided for by law. The member’s participation shall
end with leaving or being removed from th e association, and also the death of a
member – natural person, or the disso lution of a member – legal person.

(5) A member’s – legal person’s participation shall continue if the legal person is
reorganised, altering it in accordance with procedures provided for by law. If a legal
person is reorganised by merging it with another subject or by dividing it, this person’s
participation in the association shall end. (6) When a member – legal person is reor ganised through separation, the participation
in the association of th e legal person to be separated shall continue. (7) A legal person within the meaning of Para graphs Four, Five and Six of this Section
shall be understood to also be a partnership with legal status. (8) The rights and responsibilities of pers ons with special status (nominee members,
honorary members, associated members, lo ng-standing members, etc.) shall be
determined by the articles of association. Section 30. Leaving the association A member may leave the association at any time by submitting a written announcement
to the board of the association, unless it is provi ded for in the articles of association that
such announcement shall be submitted to a different administrative body. Section 31. Exclusion from the association (1) A member may be excluded from the asso ciation based on a decision of the board
or a decision of another body in accordance wi th the cases and procedures prescribed
by law. The articles of association may also provide that a member may be excluded
from an association based on a decisi on of a meeting of the members. (2) A member may be excluded from an associ ation, regardless of the regulations of the
articles of association, with good reason. A gro ss violation of the articles of association
or committing a significant harm to the association shall be considered to be good
reason in any situation. (3) The board of the association is obliged to inform a member in writing within five
days of the decision to exclude him or her from the association and the reasoning
(justification) for this decision.

(4) If the decision to remove a member is taken by the board or another body, the
member has the right to request a review of the matter at a general meeting. Section 32. The consequences of the end of a member’s participation (1) If a member’s participation in an association comes to an end, the membership fee
provided for in the articles of association a nd which has been paid shall not be repaid. (2) A person whose participation in an association has ended does not have the right to
the association’s assets. (3) The association does not ha ve the right to collect an unpaid membership fee from a
member.
Chapter V. Organisational Structure of an Association

Section 33. Administrative bo dies of an association (1) The administrative bodies of an associat ion are a general meeting (meeting of the
members) and the board. (2) The articles of associat ion may also provide for ot her administrative bodies and
determine the procedure for their creation and their competence. Section 34. General meeting (1) The highest body of an association is a general meeting. (2) All members of an association have the right to participate in the general meeting,
unless otherwise provided for by law. A memb er may also participate in a general
meeting with the intermediation of a repres entative, unless otherwise provided for by
law. An authorisation to participate and vot e in a general meeting shall be issued in
writing. Section 35. Responsibilities of a general meeting (1) The responsibilities of a ge neral meeting shall include:

1) amending the articles of association; 2) the election and removal of members of th e board and audit bodies, if such rights are
not granted to another ad ministrative body by the articl es of association; 3) taking a decision to terminate, continue or reorganise the activities of the association;
and 4) other issues which in accord ance with the law or the articles of association are within
the competence of the general meeting. (2) A general meeting has the right also to take such decisions as are within the
competence of the board and other bodies as provided for by the arti cles of association,
unless otherwise provided for by the articles of association. Section 36. Calling a general meeting (1) The board shall call a general meeting in accordance with the procedures prescribed
by law or the articles of association in the cases determined by law or the articles of
association, or if the calling of a general meeting is necessary in the interests of the
association. (2) The board shall call a general meeting im mediately (without delay to be found fault
with) if such is requested in writing by no le ss than one tenth of the members and if the
articles of association do not provide for a smalle r number of members. (3) If the board does not call a general meeting based on Paragraph Two of this Section,
the members who are requesting a general meeting may call a general meeting
independently, observing the proced ures set out to call a meeting. (4) The board shall inform members of the calling of a general meeting if it is intended
to take decisions on issues mentioned in S ection 35, Paragraph One, Clauses 1-3 at the
meeting, and shall announce its agenda no later than 14 days before the m
eeting unless
the articles of association pr ovide for a longer time period. Section 37. General meeting proceedings

(1) The general meeting is able to take decisions if more than half of the members
participate in it and if the articles of association do not provide for a larger quorum. (2) If the general meeting does not have the right to take decisions in accordance with
Paragraph One of this Section, the board, not later than three week s later, shall again
call a general meeting with the same agenda. The meeting thus called shall be able to
take decisions regardless of the number of members present, but only if at least two
members participate in the general meeting. (3) If in calling a general meeting, the regulatio ns of law or the articles of association
regarding the procedure or date for calling a meeting have been violated, the general
meeting shall not have the right to take decisions, except in cases when all members
participate in the general meeting. (4) The general meeting shall be chaired by the chairperson of the board if the members
do not elect a different chairperson for the meeting. Minutes shall be taken of the
proceedings of the general meeting. The minutes shall be signed by the chairperson of
the meeting and the minute taker. (5) General meetings are open if the meeting does not take a reasoned decision for a
different procedure for the meeting. Section 38. Decisions of the general meeting (1) A decision of the general meeting is a dopted if more than half of the members
present vote in favour of it, unless the law or articles of associati on provide for a larger
number of votes. (2) Each member of the general meeting sha ll have one vote. A member shall not have
the right to vote if the general meeting is voting on signing a transaction with this
member or on raising a claim or e nding a claim against such member. (3) In order to amend or terminate the right s of a member, which are different from the
rights of other members, or to determine ob ligations of a member which are different
from the obligations of other members, th e consent of this member is required. Section 39. Adopting a decision to amend the articles of association

(1) A decision to amend the articles of association is adopted if not less than half of the
members present vote in favour of it, if the articles of association do not provide for a
larger majority of votes. (2) Amendments to the articles of associati on shall come into force at the time they are
adopted if the articles of association or the decision do not provide otherwise; and in
regard to third parties, only after the amendments to the articles of association are
registered in the register. (3) Notification of amendments to the articl es of association shall be submitted to the
register institution, attaching an extract of the minutes of the general meeting or an
extract of the minutes of the voting with th e decision on amendments to the articles of
association and the full revised text of the articles of association. Section 40. Finding the decision of a general meeting to be invalid (1) A court, based on the application of a member, board me mber, or auditor (also of
another body if so indicated in the articles of association) of the association, may find a
decision of the general meeting to be invalid if such decision or its adopting procedure
is in contradiction with the law or the articles of association, or if significant violations
have taken place in the calling of the meeting or in taking the d ecision. A claim may be
raised within three months from the day th e relevant person came to know, or should
have come to know of the decision of the ge neral meeting, but not later than one year
from the day the decision was adopted. (2) In accordance with the regulations of Paragraph One of this Section, the court may
find the decisions of other bodies of th e association also to be invalid. Section 41. Meeting of proxies (1) The articles of association may provide that the responsibilities of the general
meeting within the scope provided for by the ar ticles of association are carried out by a
meeting of proxies elected from the total number of members. The representation quota
and the procedure for nominating and electing proxies shall be determined by the board
if the articles of association do not provide otherwise. All members of the association
have the right to participate in proxy elections.

(2) The provisions of this law regarding the general meeting shall be applicable to the
meeting of proxies if not otherwise provided by law. Section 42. Board (1) The board shall manage and represent the association. (2) The board may consist of one member or more members. The general meeting shall
elect a chairperson of the board from the board members unless otherwise provided for
by the articles of association. (3) Board members shall be natural persons with legal capacity. (4) Not less than half of the board members shall be persons whose place of residence
is Latvia. Section 43. Responsibilities of the board (1) The board shall administrate and manage the affairs of the association. It shall
administrate the assets of the association and shall deal with its funds in accordance
with laws, the articles of association, a nd decisions of the board or other bodies. (2) The board shall organise bookkeeping accounts for the association in accordance
with legislative enactments and shall carry out other responsibilities in accordance with
its competence as set out in the articles of association. Section 44. Right of repres entation for the board (1) All board members have the right of representation. The board members represent
the association jointly, unless otherwise prov ided for by the articles of association. (2) The right of representation for the board in regard to third parties shall not be
limited. The right of board members to repres ent the association jointly or individually
as set out in the articles of association shall not be considered to be a limitation of the
right of representation for the board within the meaning of this Section.

(3) In relation to the association, the board shall observe lim itations of representation as
prescribed in the articles of association, decisions of the general meeting and other
bodies as provided for by the articles of association. Section 45. Election, removal and righ t to leave office of board members (1) Board members shall be elected by a decision of the general meeting unless
otherwise provided for by the articles of association. (2) A board member may be removed by the body which has elected the board member
or by the general meeting. (3) The articles of association may provide for a board member to be removed only if
there is good reason to do so. Su ch a reason shall be considered to be, in any case, non-
performance or inadequate performance of responsibilities, inability to manage the
association, harm done to the interests of the association and loss of trust. (4) A board member does not have the right to transfer his or her authority to third
parties. (5) A board member may at any time su bmit an announcement to the association
regarding leaving the office of board member. (6) The election of a board member or the en d of his or her term of office shall be
announced for entry in the register, and th e announcement shall be accompanied by an
extract of the minutes of the general mee ting, or other body provided for by the articles
of association, with the deci sion regarding the election or recall of the board member. Section 46. Adopting of decisions of the board (1) The board has decision taking rights if its meeting is attended by more than half of
the board members and unless the articles of association provided for a larger quorum. (2) If the board consists of several members, a decision shall be adopted with a simple
majority of votes of the board members pr esent, unless the articles of association
provide for a larger majority of votes.

(3) Regardless of the provisions of Paragraphs One and Two of this Section, the board
has the right to take decisions without call ing a meeting if all board members vote in
written form for taking the deci sion and unless otherwise provided for by the articles of
association. (4) Minutes shall be taken at board meetings of the association. It shall be mandatory to
record in the minutes the decisions taken, indicating the vote of each board member
“for” or “against” each decision. Section 47. Payment and covering of expenses (1) A board member shall carry out his or her responsibilities without pay unless
otherwise provided for by the articles of association. (2) If the articles of associat ion provide for a board member to have the right to receive
pay, its amount and procedures for payment shall be determined by a decision of the
general meeting, unless otherwise provide d for by the articles of association. (3) A board member may request the covering of such expenses as are incurred during
the carrying of his or her responsibilities, unless otherwise provided for by the articles
of association. Section 48. Other bodies of the association The articles of association may provide that in addition to the board another body may
be created to carry out separate activities according to the procedures provided for in
the statues for appointment (election). Section 49. Liability of members of the board and other bodies (1) Members of the board and other bodies ar e jointly liable for losses arising to the
association through their fault. (2) An association may raise a claim agai nst a member of the board or other body
within five years, counting from the day the rights were violated or the day when
violation of rights became known.

Section 50. Units of the association (1) An association may have its territorial and other organisationally independent units.
Units of the association are not legal persons. (2) If a unit of an association has its own general meeting and board, then the provision
of Sections 33, 34, 36-38, 40-43, 45-47 and 49 of th is Law shall be applicable in regard
to them. Section 51. Right of contro l of the general meeting (1) The board shall ensure that the member s of the association have all necessary
information and documents in regard to the operations of the association and shall also
prepare a relevant repor t at their request. (2) The general meeting shall control the activ ities of all administrative bodies. For this
purpose, the general meeting has the right to determine an internal audit. (3) Board members have the responsibility to provide all information and documents
necessary for the aud it to the auditing body. (4) The auditor shall prepare an opinion on the results of the audit which shall be
presented to the general meeting. Section 52. Annual report of an association (1) At the end of a reporting year, the boa rd shall prepare an annual report of the
association in accordance with the La w on Accounting and other regulatory
enactments. (2) The annual report of the association sha ll be reviewed by the auditing body of the
business and financial operations or a sworn auditor. Members of the association have
the right to familiarise themselves with the annual report. (3) Every year, not later than by 31 March, the annual report shall be submitted by the
association to the State Revenue Se rvice and the register institution.

Chapter VI. Termination of activities of an association and liquidation

Section 53. Basis for the termination of activities for an association The activities of an association shall be terminated: 1) with a decision of the general meeting; 2) by starting bankruptcy proceedings of the association; 3) when the number of members is decrea sed to one member or another number as
provided for by the articles of association; 4) when the time period set out in the ar ticles of association has ended (if the
association is founded for a period of time); 5) with a court decision; or 6) on a different basis as set out in la w or in the articles of association. Section 54. Terminating the activities of an association with a decision of the
general meeting A decision of the general meeting to termin ate the activities of an association is
considered adopted if two thir ds of the members present vot e in favour of it and if the
articles of association do not provided for a larger majority of votes. Section 55. Terminating the ac tivities of an association by starting bankruptcy
proceeding The procedure by which the operations of an association shall be ended in case of
bankruptcy shall be regulated by a separate law. Section 56. Terminating the activities of an association with a decision of the board If the number of members is decreased to one member or another number as provided
for by the articles of associ ation, or if the time period set out in the articles of

association, for which the association was founded has ended, the decision to terminate
activities shall be taken by the board of the association. Section 57. Terminating the activities of an association with a court decision (1) The activities of an association, based on a court de cision, may be terminated: 1) if the operations of an association are in contradiction to the Constitution, laws or
other regulatory enactments; 2) if business operations, of a profit-gaini ng nature, have become the main operations
of the association; 3) if the board of the association has not submitted an application to terminate the
activities of the association in accordance with this Law; or 4) in other cases as provided for by law. (2) A prosecutor or a State Revenue Serv ice Territorial Institution may submit an
application in court if the association: 1) after receiving a warning in writing, the association ha s not eliminated violations
during the time period speci fied in the warning. The time period for eliminating
violations shall be set as not less than 15 days and not longer than three months; or 2) within a year of having received the warning, repeatedly commits a violation,
especially in its public activities. (3) At the request of the applicant, the c ourt may prohibit the association from carrying
out public activities or other act ivities until the final decision is taken in the matter. The
decision may be appealed in accordance with the procedure set out in the Civil Law. (4) The decision regarding the prohibition of public activities of the association or other
activities shall be sent to the register institu tion in order for an entry to be made in the
register.

(5) The court, taking into account the severity and consequences of the violation
committed by the association, and evaluation the objective and activities of the
association overall, may limit itself to issu ing a warning to the association, and not
terminating its activities. Section 58. Liquidation of an association (1) When the operations of an association ar e ended, liquidation of the association takes
place unless otherwise provided for by law. (2) The word “likvidejama” [to be liquidate d] shall be added to the name of the
association. Section 59. Liquidators of the association (1) The liquidation is carried out by members of the board unless otherwise provided
for by the articles of association, a decision of the general meeting or court decision. (2) If a liquidator is appointed by the general meeting, it will determined the amount of
his or her payment and procedures for paying. (3) If the operations of an association ar e ended based on a court decision, a liquidator
is appointed and the amount of his or her payment and procedure for paying shall be
determined by the court. (4) A liquidator may be a legally competent na tural person whose place or residence is
in Latvia. Section 60. Notification of terminating th e activities of an association and its
liquidation (1) If the activities of an association are terminated in relation to the conditions
mentioned in Section 53, Clauses 1, 3 and 4 of this Law, the board shall
submit a
notification to the register institution regard ing the termination of activities of the
association. Attached to th e notification shall be:

1) an extract of the minutes of the general meeting with the decision to terminate the
activities of the association if the activities of the association have been terminated with
a decision of the general meeting; and 2) information about the liquidator’s name, surname and personal identity code. (2) If the activities of an association are terminated based on a court decision, the court
shall send the respective decision for entry into the register. Within three days of the
decision coming into force, the liquidator shall submit the information mentioned in
Paragraph One, Clause 2 of this S ection to the register institution. (3) If the liquidation is carried out by the members of the board, this fact is indicated in
the notification or in the court decision and the information mentioned in Paragraph
One, Clause 2 of this Section shall not be attached. Section 61. Recalling of the liquidator (1) A liquidator may be removed by a decision of the general meeting, at the same time
appointing a different liquidator. (2) A liquidator may be removed by a decision of the court, based on the application of
a member or other concerned party, with good reason to do so. (3) A court appointed liquidator may be re moved only by a court decision based on the
application of a member or other concerne d person, with good reason to do so, and a
different liquidator is appoi nted at the same time. (4) The decision to recall a liquidator shal l be submitted by the new liquidator to the
register institution within three day of the decision being taken. Section 62. Rights and respons ibilities of a liquidator (1) A liquidator has all the rights and re sponsibilities of the board and other bodies
provided for by the articles of association (except the genera l meeting) which are not in
contradiction to the aim of liquidation.

(2) A liquidator shall collect debts, sell the assets of the association, settle creditor
claims and after covering the costs of the liquidation and settling the claims of the
creditors divide the remaining assets of the association among the persons who have
rights to the assets. (3) A liquidator may conclude only such deals as are necessary for the liquidation of the
association. Section 63. Right of representation of the liquidator (1) If the liquidation of an association shall be carried out by several liquidators, they
have the right to represent the associati on only jointly unless otherwise provided for by
the statues, a decision of the general m eeting or court decision. The provision for
individual representation shall be valid only in relation to third parties if so registered in
the register. (2) The liquidators may authorise one or several persons from amongst themselves to
carry out separate legal activities. Section 64. Submitting notification of insolvency If during the proceedings of the liquidation it is found that the assets of the association
to be liquidated are not sufficient to settle all the justified creditor claims, the liquidator
shall have the responsibility to submit a notif ication of insolvency in accordance with
the procedures prescribed by law. Section 65. Informing creditors and raising claims (1) The liquidator shall announce notification of the termination of activities of the
association and its liquidation in the newspaper “Latvijas Vēstnesis” within 15 days
after the respective decision has come into force. (2) The liquidator shall send a notification of the initiation of liquidation to all known
creditors of the association. (3) In the notification mentioned in Paragrap hs One and Two of this Section, creditors
of the association shall be asked to raise thei r claims within three months of the day of

publication of the claim if a decision of the general meeting or court decision regarding
the termination of activities of the association does not prescr ibe a longer period of time
to raise claims. (4) Within the set period of time, creditor s shall notify the liquidator of their claims
against the association. The clai m shall state the content of the claim, basis and amount
and documents which justify the claim shall be attached to it. Section 66. Financial report at the beginning of liquidation After the end of the time period for creditors to make claims, the liquidator shall
prepare a financial report of th e beginning of the liquidation. Section 67. Creditor protection (1) If a known creditor does not make a claim, does not accept fulfilment or the
obligation cannot be fulfilled yet, the amount s which they are entitled to shall be
deposited in court. (2) if there is a controversial creditor claim, the assets of the association shall be
divided only if the respective creditor has been provided for. Section 68. Closing financial report of th e association and division of assets (1) After settling the claims of the creditors , or depositing the money intended for them,
and covering the costs of liquidation, the liquidator shall prepare a closing report of the
association in accordance with regulatory enactments and shall divide the remaining
assets of the association among the persons who have a right to these assets in
accordance with the statues or law. (2) The articles of associat ion may prescribe that before dividing the assets of the
association, a general meetin g shall designate the persons who have the right to these
assets unless otherwise provided for by law. Such rights may not be indicated for the
founders of the association, members of the boa rd or other bodies, or for other persons
with a similar material interest, especially spouses, relatives and in-laws, with a kinship
to the second degree and affinity to the first degree.

(3) If the articles of association or decisions of the general meeting do not provide for
persons who have a right to the remaining asse ts, they shall be divided in equal shares
among the persons who were members of the association at the time of terminating
activities unless otherwis e provided for by law. (4) If the assets of the asso ciation cannot be divided in accordance with the procedure
set out in Paragraphs One, Two and Three of this Section, the assets of the association
shall transfer to the State. (5) If the operations of the association have been ended in accordance with the
provisions of Section 57, Paragraph One, Clau ses 1 and 2 of this Law, after covering
the costs of the liquidation and settling the claims of the creditors, the remaining assets
shall transfer to the State. (6) The assets of the association shall be divided not sooner than six months after the
day when the notification of terminating the activities of the association was published.
The court may allow the remaining assets of the association to be divided before the
designated time period if losses will not be incurred by the creditors. Section 69. Storing of documents of the association The liquidator shall carry out the necessary actions to put the documents of the
association in order and to deposit them at the state arch ives. The costs of putting the
documents in order and depositing them at the archives shall be covered from the assets
of the association to be liquidated. Section 70. Continuing the operations of the association (1) If the termination of activities of the association is provided for by the statues or if
the decision to the operations of the associ ation is adopted by the general meeting, until
the commencement of the division of the asse ts, the members may take a decision to
continue the operations of the association or to reorganise the association. The decision
shall be considered to be adopted if more than two thirds of the members present vote
in favour of it.

(2) When the decision to continue the operations of the asso ciation is taken, a board and
other bodies provided for by the articles of a ssociation shall be created at the same
time. (3) A liquidator shall notify the register institution regarding the continuation of
operations of the association. The decision to continue operations of the association
shall come into force after it is registered in the register. Section 71. Deletion from the register (1) After the remaining assets of the associa tion are divided, the liquidator shall submit
a notification to the register institution regarding the end of liquidation. The closing
financial report of the association sh all be attached to the notification. (2) In the notification the liquidator shall certify that: 1) the closing financial report of the association has not been contested in court or that
the respective claim has been denied; 2) all creditor claims have been settled or that money intended for them has been
deposited; and 3) the documents of the association have been deposited for storage at the state archive. Section 72. Liability of the liquidator (1) The liquidator shall be liable for losse s occurring due to his or her fault. (2) If there are several liquidators, they shall be jointly liable for the losses occurring
due to their fault.
Chapter VII. Reorganisation of Associations

Section 73. Reorganisation (1) An association may be reorga nised through joining or division.

(2) Only associations may take part in the reorganisation process unless otherwise
provided for by law. (3) The articles of association may provide that reorganisation is permissible or not
permissible upon certain preconditions Section 74. Joining (1) The association may be joined with another association through acquiring or
merging. (2) Acquiring is a process in which the association (association being acquired)
transfers all of its assets to anothe r association (acquiring association). (3) Merging is a process where two or more associations (associations being acquired)
transfer all of their assets to the association being f ounded (acquiring association). (4) In the event of joining, the associati on to be acquired ceases to exist without
liquidation proceedings. (5) In the event of joining, the rights and obligations of the association being acquired
are transferred to the acquiri ng association. Members of th e association being acquired
shall become members of the acquiring association. (6) In regard to the association being founded, the provisions of this Law on founding
an association shall be app licable to the association be ing founded, insofar as is not
prescribed otherwise in this chapter. The associations being acquired shall be
considered to be the founde rs of the association. Section 75. Division (1) Division is a process when the associati on (association being divided) shall transfer
its assets to one association or several diffe rent associations (acquiring associations)
through splitting or partition.

(2) In the event of splitting, the associati on being divided shall tran sfer all of its assets
(rights and obligations) to two or more acqui ring associations and cease to exist without
liquidation proceedings. (3) In the event of splitting, the members of the association being divided become
members of the acquiring association in accord ance with the agreement or decision of
reorganisation. (4) In the event of part ition, the association being divided sh all transfer part of its assets
(rights and obligations) to one acquiring associ ation or several such associations. In the
event of partition, the association bei ng divided shall continue to exist. (5) In the event of partition all members of th e association being divided or part of them
become members of the acquiring associatio ns in accordance with the agreement or
decision of reorganisation. (6) The acquiring association may be an exis ting association or an association being
founded. In regard to the association bein g founded the provisions of this Law on
founding an association shall apply insofar as this Chapter does not prescribe otherwise. Section 76. Agreement of reorganisation (1) If two or more existing associations participate in the process of reorganisation, they
shall enter into an agreement of reorganisa tion. The agreement shall be entered into in
writing. (2) The agreement shall set out: 1) the name, registration number and legal addr ess of the associations involved in the
reorganisation; 2) the rights which the acquiring association shall grant to the members of the
association being acq uired or divided; 3) the consequences of reorganisation for the employees of the associations involved in
the reorganisation process;

4) in the event of division – the material and non-material rights and obligations to be
transferred to each acquiring association; 5) in the event of merging – the further utilisation of the non-material rights of each
association. (3) In the event of merging associations, in addition to the information mentioned in
Paragraph Two of this Section, the name a nd legal address of the acquiring association
(association being founded) shall also be noted in the reorganisation agreement. (4) If another already existing association is not involved in the division process, the
association being divided shall adopt a deci sion on division which shall replace the
agreement mentioned in this Section. In addition to the information mentioned in
Paragraph Two of this Section, the name a nd legal address of the acquiring association
and information on the division of the assets of the association being divided shall be
set out in the decision on division. The assets division document may be attached to the
decision as a separate document. Section 77. Decision on reorganisation (1) The draft agreement on reorganisation shall be reviewed and the decision on
reorganisation shall be adopted by the gene ral meeting of each association involved in
the reorganisation process. (2) Not less than one month before the day when the general meeting to approve the
agreement is planned, all members of the a ssociation shall be given the opportunity to
familiarise themselves with the draft agre ement according to their legal addresses. (3) The decision on reorganisation shall be cons idered to be adopted if more than two
thirds of the members present vote in favour of it and if the articles of association do
not prescribe a greater majority of votes. (4) The decision on reorganisation shall be prepared as a separate document. (5) If the acquiring association is a newly founded asso ciation, the general meeting of
each association involved in the reorganisation process shall review the draft articles of
association of the associ ation being founded. At the same time the decision on

reorganisation is adopted, the articles of association of the association being founded
shall be approved. (6) Based on the decision on reorganisation, th e relevant association enters into an
agreement. Section 78. Protecting the in terests of the creditors (1) Within fifteen days from the day a decision is adopted for reorganisation, each
association involved in the reorganisation process shall inform all know
n creditors in
writing who had claim rights agai nst the association up to the adoption of the decision
for reorganisation. (2)Each association involved in the reorga nisation process has the responsibility to
publish an announcement in th e newspaper “Latvijas Vēstnesis” that a decision for
reorganisation has been adopte d. The announcement shall state: 1) the name, registration number and legal address of the association; 2) the name, registration number and legal a ddress of the other associations involved in
the reorganisation; 3) the fact that a decision for reorganisati on has been adopted, indicating the type of
reorganisation; and 4) the place and time, which may not be less than one month from the date of the
publication, of claims to be made by creditors. (3) An association being acquired or divided shall secure a creditor’s claim if it is
requested and if it is submitted within the time set out in Paragraph Two of this Section.
A creditor of an acquiring association may request securing of a claim only if it is
proved that joining will threaten the settlement of his claim. (4) A secured creditor may request securing onl y for the amount of the unsecured part
of the debt. Section 79. Dispute of a decision to reorganise

(1) Based on the claim of a member or board member of an association involved in
reorganisation, a court may adjudicate that a decision for reorganisation is not valid, if
it has been adopted by violation of the law or articles of association and it is not
possible to eliminate these violations or they are not eliminated within the time period
set by the court. (2) The time period to raise a claim is thr ee months after the date of publication of the
announcement mentioned in Section 78 of this Law. (3) The association, whose general meeti ng decision on reorganisation has been
deemed to be invalid, shall have the responsibility to publish an announcement
regarding this in the newspaper “Latvijas V ēstnesis” within 15 days of the date of court
decision coming into force. (4) If the decision for reorganisation is ad judged to be invalid, it shall not affect the
obligations which the association has taken on in regard to third parties during the
process of reorganisation. Section 80. Application to the register institution (1) Each association involved in the reorganisation process shall submit to the register
institution, not earlier than three months after the date of publication of the
announcement, an application to register the reorganisation. Attached to the application
shall be: 1) the agreement for reorganisation or an appropriately certified copy of it; 2) an extract of the minutes and decision for reorganisation; 3) articles of association of the acquiring association (if a new association is being
created as a result of the reorganisation); and 4) a list of the members of the board of th e acquiring association if a new association is
being created as a result of the reorganisation). (2) In the application the association shall certify that creditor claims, which have been
submitted within the prescribed time period, ar e secured or settled and that the decision

for reorganisation has not been contested in court or that the respective claim has not
been satisfied. (3) In the event of associations being me rged, the associations being acquired shall
submit to the register institution a joint appl ication for the association being founded to
be registered in the register. Section 81. Name of the acquiring association The acquiring association may continue its operations using the name of the acquired
association. Section 82. Entry to be made in th e register regarding reorganisation (1) An entry regarding the association being acquired shall be made after entries have
been made regarding all acquiring associations. (2) After an entry is made in the register regarding the acquiring of the association, the
file of the association bei ng acquired is added to the register file of the acquiring
association, and the acquired associat ion is deleted from the register. (3) After an entry has been made in the re gister regarding the reorganisation of an
association being divided, the ap propriate extracts from the file of the association being
divided are attached to the f iles of the acquiring associations, and in cases when the
division takes place by way of splitting, the as sociation being divided is deleted from
the register. Section 83. Legal meaning of the en try made in the register regarding
reorganisation (1) Reorganisation shall be deemed to be in force from the moment entries are made in
the register regarding all of the associations involved in the reorganisation process,
including newly founded associations. (2) From the moment the reorganisation comes into force:

1) the assets of the association being acquired shall be cons idered to be transferred to
the acquiring associations; and 2) the assets of the associati on being divided shall be considered to be transferred to the
acquiring associations. (3) Upon the deletion of the association from the register, this association shall be
considered to be liquidated. Section 84. Liability of the associations involved in the reorganisation process (1) The acquiring association shall be liable fo r all of the obligations of the association
being acquired. (2) All the associations i nvolved in a division, includi ng newly founded associations,
shall be jointly liable for the obligations of the association being divided, which have
arisen until the time the reorganisation has come into force. (3) If the obligations of an association involved in a di vision are not set out in the
agreement, it is jointly liable together wi th the other associations involved in the
division for the obliga tions of the association being divi ded which have arisen up to the
time the reorganisation has come into force a nd whose time of discharge is five years
from the time of the reorganisation coming into force. Section 85. Liability of board members (1) The board members of the associations in volved in reorganisation shall be jointly
liable for losses which have been incurred by the association during the reorganisation
proceeding due to their fault. (2) The limitation period of the claim set out in Paragraph One of this Section shall set
in within five years from the day the reorganisation shall come into force.

Division C. Foundations
Chapter VIII. Founding a Foundation

Section 86. Founders (1) A foundation may be founded by one or more persons. (2) If a foundation has several founders, th ey shall realise their founder rights only
jointly. (3) Persons who have granted assets to the f oundation after it has been registered in the
register shall not be considered founders. (4) The status of founder shall not be inhe rited and it may not be transferred to third
parties. If a founder has undertaken obligatio ns before the foundation is registered in
the register, the provisions of Section 27 of this Law shall be applicable. Section 87. Basis for founding A foundation is founded based on the decision of a person to found a foundation or on a
will. Section 88. Decision to found a foundation The provisions of Section 24 of this Law shall apply to a decision to found a
foundation. Section 89. Founding of a foundation on the basis of a will (1) When a foundation with generally useful and charitable objectives is founded based
on a will (foundation based on a will), the pr ovisions of the Civil Law shall be
applicable insofar as this La w does not prescribe otherwise. (2) If a will does not include the information mentioned in Section 24 of this Law, the
articles of association for the foundation being founded have not been d
rafted, or board
members have not been appoint ed, the executor of the will, heir or guardian (Section

496 of the Civil Law) shall carry out the appropriate actions (drafting of articles of
association, appointing board members). In ca rrying out the actions mentioned in this
Section, the executor of the will, heir or gua rdian shall take in to consideration the
wishes of the testator as far as possible. (3) Until the board members are appointed, th e executor of the will, heir or guardian
shall utilise the rights of a f ounder, administer the assets which have been transferred to
the foundation being founded, and shall carry ou t other activities as prescribed by Law. (4) The authority of the executor of the will, heir or guardian as set out in this Section
shall end on the day that the foundati on is registered in the register. Section 90. Articles of association of the foundation (1) The articles of associati on of the foundation shall set out: 1) the name of the foundation; 2) the objective of the foundation; 3) the procedure according to which assets shall be transferred to the foundation; 4) the procedure according to which the funds of the foundation shall be used; 5) the period of operation of the foundation (if the foundation is set up for a specific
time period; 6) the procedure for division of assets in the case of liquidation of the foundation; 7) the procedure for appointing and recalli ng board members and the term of office; 8) the procedure for appointing and recalli ng members of other administrative bodies
(if such are provided for) and the term of office; 9) the structure of the business and fina ncial operations auditing body, procedure for
election, competence, procedure for adopting decisions and term or office, or the
procedure for appointing a sworn auditor and term of office; and

10) procedure for making amendments to the articles of association. (2) The articles of association may prescribe other provisions which are not in
contradiction to the law. If the articles of a ssociation are in contradiction to the law, the
provisions of the law shall apply. Section 91. Beneficiary and restrictions of the operations of the foundation (1) The articles of association may prescribe a set of benefi ciaries. In case of doubt, a
beneficiary shall be considered to be a pe rson to whom funds may be paid from the
assets of the foundation in accordance with the articles of association of the foundation. (2) The foundation is prohibited to grant funds, offer guarantees, issue bills of
exchange, or otherwise fund the founders, members of the board or other administrative
bodies (if such have been crea ted), or other persons who have similar material interests,
especially spouses, relatives, and in-laws, in kinship to the second degr ee and affinity to
the first degree. Section 92. Application to regist er the foundation in the register (1) A founder shall submit an application to the register institution to register the
foundation in the register. The application sh all set out the information mentioned in
Section 15, Clauses 1-6 of this Law. (2) The application shall be signed by the founder, and when founding a foundation
based on a will, the executor of the will, heir of guardian. (3) Attached to the application shall be: 1) the founding decision; 2) the articles of association; 3) the written consent of each board member to be a board member. (4) When founding a foundation based on a will, instead of attaching the founding
decision, an appropriately authenticated copy of the will shall be attached as well as

documents which certify the authority of the guardian (Section 496 of the Civil Law)
and the coming into legal force of the will.
Chapter IX. Organisational Structure of a Foundation

Section 93. Administrative bodies of a foundation (1) The administrative body of a foundation is the board. (2) The articles of association may provide for the creation of other administrative
bodies, prescribing the procedure for thei r creation and their competence, and the
granting of administrative competence to ot her subjects or their bodies (hereafter –
other administrative bodies). Section 94. Board (1) The provisions of Section 42-45 and Sec tion 49 of this Law shall be applicable in
regard to the board of a foundation insofar as this Chapter does not prescribe otherwise. (2) The articles of association may prescribe restrictions in regard to members of the
board. Board members may not be persons mentioned in Section 89, Paragraph Two of
this Law, if the will does not prescribe otherwise. (3) The board shall consist of at least three members. If the articles of association do
not prescribe otherwise, the board members shall elect a chairperson of the board from
among themselves, who shall organise the work of the board. (4) In its activities, the board shall observ e the objective of the foundation, the wishes
of the testator, and the inst ructions of other administrative bodies (if the articles of
association provide for such instructions to be given) as set out in the decision of the
founder and in the articles of association, and also the competence prescribed by law
and in the articles of association. Section 95. Appointing and removing b oard members and their right to leave
office

(1) If the foundation is founded during the lifetime of the founder, the board members
are appointed by the founder. If a foundation is founded based on a will, the board
members are appointed by the persons listed in Section 89, Paragraph Two of this Law,
except in cases when the board members are appointed by the will. (2) Decisions on further changes in the co mposition of the board, and the removal of
board members shall be adopted according to the procedures set out in the articles of
association. (3) A board member may at any time submit a notification of leaving the office board
member. (4) The appointment of a board member or the end of his or her term of office shall be
announced for entry into the register. If in accordance with the articles of association,
the decision of appointing or removing a board member is adopted by a different
administrative body, the respective decision of the body shall be attached to the
application, as well as the written consent of the board member to be a board member.
If a board member leaves office in accordance with Paragraph three of this Section, the
respective announcement of the board member shall be attached to the application. Section 96. Payment and reimbursement of expenses (1) A board member shall carry out his or her responsibilities without pay unless the
articles of association prescribe otherwise. (2) If the articles of associ ation provide for payment to a board member, the amount
and procedure for paying shall be determin ed by the person or body who has the right
to appoint board members in accordance with the articles of association. (3) A board member may request reimbursement for such expenses as he has incurred
during the carrying out of his or her responsib ilities if the articles of association do not
provide otherwise. Section 97. Adopting of board decisions (1)The board has the right to adopt decisions if more than half of the board members
are present in its meeting.

(2) The board shall adopt its decisions with a simple majority vote of the board
members present, if the articles of associa tion do not prescribe a greater majority vote. (3) Minutes shall be taken at board meetings. The minutes shall set out: 1) the name of the foundation; 2) the place and time of the board meeting; 3) participants of the meeting; 4) items of the agenda; 5) the procedure and proceedings of discussing the items of the agenda; 6) results of voting, indicating the vote of each board member “in favour” or “against”
for each decision; and 7) the decisions adopted. (4) If a board member does not agree with a board decision and votes against it, the
differing opinion of the board member shall be recorded in the minutes of the board
meeting at his or her request. (5) Minutes of board meetings shall be signed by the board members present at the
meeting. Section 98. Other administrative bodies (1) If the articles of association provide fo r the creation of another administrative body
or granting administrative competence to another subject or its body, then such subject
or its body may adopt decisions only for issues which are not in the competence of the
board in accordance with the law or the articles of association. (2) In regard to a collegial administrative body, the provisions of Section 97 of this Law
shall be applicable.

Section 99. Restriction for members of the board and other administrative bodies (1) If the interests of the foundation are in conflict with the interests of a member of the
board or other administrative body, his or her sp ouse, relative or in-law, with kinship to
the second degree and affinity to the first degree, the issue shall be decided at a meeting
of the body at which the member concer ned of the administrative body may not
participate in discussions of the issue, and also shall not have voting rights, and such
shall be recorded in the minutes of the m eeting of the administrative body. A member
of the administrative body has the responsibility to announce such interests before the
start of the respective meeting. A memb er of the administrative body has the
responsibility to announce such interest s to the administrative body after the body
meeting as well. (2) A member of the administrative body who has violated the provision of Paragraph
one of this Section, is responsible to co mpensate the losses incurred by the foundation.
Chapter X. Revoking or amending the fo unding decision and the articles of
association

Section 100. Revoking or amending the founding decision and the articles of
association before the foundation is registered in the register (1) The founder may revoke or amend the decision on founding or the articles of
association. (2) In the case of death of a founder – na tural person, or closing of a founder – legal
person, the other founders do not have the ri ght to revoke the founding decision, if the
founding decision or other agreement of th e founders does not provide otherwise. Section 101. Amending the articles of asso ciation after the foundation is registered
in the register (1) After the foundation is regi stered in the register, amendments to the articles of
association may be made only by the board. The board may make amendments to the
articles of association only in the cases provided for by the articles of association, or if
the need for amendments is justified by th e fact that the conditions, from which the
objective of the foundation arose, have changed.

(2) The articles of association may provide that amendments to the articles of
association require the consent of another administrative body. (3) Amendments to the articles of associati on shall come into force from the time they
are adopted unless the decision pr ovides otherwise, and in regard to third parties, only
after the articles of association ar e registered in the register. (4) When applying for amendments to the articles of association to be entered into the
register, the minutes of the board meeting w ith the decision to amend the articles of
association, a document which certifies the c onsent of another administrative body to
the amending of the articles of associati on (if so prescribed by the articles of
association) and the full text of the revised articles of association shall be attached.
Chapter XI. Annual report and control of a foundation

Section 102. Annual report of a foundation At the end of the reporting year, the board sh all prepare and submit an annual report in
accordance with the provisions of Section 52 of this Law. Section 103. Rights of control of donors Persons who donate to the foundation may at any time find out about the activities of
the foundation, and familiarise themselves will all documents, except accounting
documents and information on other pers ons who have made donations to the
foundation.
Chapter XII. Termination of activities , liquidation and reorganisation of a
foundation

Section 104. Basis for termination of activities of a foundation The activities of a foundation shall be terminated: 1) with a court decision;

2) when the term of operation ends (if the foundation is founded for a specific period of
time); 3) upon initiating bankruptcy proc eedings for the foundation; or 4) on the basis prescribed by another law or the articles of association. Section 105. Termination of activities of a foundation with a court decision (1) The activities of a foundation shall be terminated, based on a court decision: 1) if the objective of the foundation has been achieved or its achievement has become
impossible, and the articles of association do not prescribe the right for the board to
change the objective of the foundation, or th e board has not received the consent of
other administrative bodies to change the objec tive (if so provided for in the articles of
association); 2) if the operations of the foundation are in contradiction to the Constitution, laws or
other regulatory enactments; 3) if the operations of the foundation are not in accordance with the objective set out in
the articles of association; 4) if business operations with a profit gaini ng nature have become the basic activity of
the foundation; or 5) in other cases prescribed by law. (2) In the case set out in Paragraph One, Clause One of this Section, the application for
terminating the activities of the foundation shall be submitted by the board. (3) In the cases set out in Pa ragraph One, Clauses 2-5 of this Section, the application
shall be submitted in court by a prosecutor or a State Revenue Service Territorial
Institution if the foundation:

1) after receiving a written warning, has not eliminated the violations within the time
period set out in the warning. The time peri od for eliminating violations shall be not
less than 15 days and not longe r than three months; or 2) repeatedly commits a violation within one year of receiving a warning, especially in
its public activities. (4) At the request of the applicant, the court may prohib it the foundation to carry out
public activates or other activities until the final decision is adopted. The decision may
be appealed in accordance with the pr ocedure prescribed by the Civil Law. (5) The decision to prohibit the public activ ities or other activities of the foundation
shall be sent to the register institution in or der for an entry to be made in the register. (6) The court, taking into consideration the severity and consequences of the violation,
and also evaluating the overall objective and activities of the foundation may limit itself
to issuing a warning but not terminating its activities. Section 106. Termination of activities of a foundation upon initiating bankruptcy
proceedings The procedure according to which activities of a foundation shall be terminated in the
event of bankruptcy shall be regulated by a separate law. Section 107. Liquidation of a foundation (1) The provisions of Chapter VI of this Law on the liquidation of an association shall
be respectively applicable to foundations insofar as is not otherwise prescribed in this
Chapter. (2) Liquidation shall be carried out by memb ers of the board if the articles of
association do not prescribe otherwise. If liquidation is carried out by other persons
who are not board members, the articles of association shall prescribe the procedure for
appointing such liquidators. (3) If the activities of a foundation are termin ated when the conditions set out in Section
104, Clauses 2 o4 4 set in, the board shall submit a notification to the register institution

regarding the termination of activities of the founda tion. The name, surname and
personal identity code of the liquidator shall be attached to the notification. (4) If the activi ties of a foundation are terminated ba sed on a court decision, the court
shall send the respective decision for registrati on in the register. Within three days of
the decision coming into force, the liquidator shall submit to the register institution the
information set out in Paragraph three, sentence of two of this Section. (5) If the liquidation is carried out by board me mbers, this fact shall be indicated in the
notification or in the court decision and the information set out in Paragraph three,
sentence of two of this Section shall not be attached. (6) A liquidator may be removed by a court decision, based on the application of an
interested person, with good reason, and another liquidator shall be app
ointed at the
same time. (7) The decision to continue operations of the foundation shall be adopted by the board
or other administrative bodi es provided for by the articles of association. Section 108. Closing financial report of the foundation and division of assets (1) After satisfying the claims of creditors or depositing money intended for them, and
covering the costs of liquidation, the liquidator shall prepare a closing financial report
in accordance with regulatory enactments and shall divide the remaining assets of the
foundation among the persons who have a right to these assets in accordance with the
articles of association, if not provided othe rwise by law. The assets shall be divided
among these persons in equal parts unless ot herwise prescribed by the articles of
association. (2) If the activities of a f oundation are terminated in accordance with the provisions of
Section 105, Paragraph One, Clauses 2-5 of th is Law, then after covering the costs of
liquidation and satisfying creditor claims the remaining assets shall be transferred to the
State, for utilisation for similar objecti ves, except in cases when the donor has
prescribed other procedures for the use of the assets in the case of liquidation. (3) The assets of a foundation shall not be divided among the founders, members of the
board or other administrative bodies, or am ong other persons with similar material

interests, especially spouses, relatives and in-laws, with kinship to the second degree
and affinity to the first degree. Section 109. Reorganisation of a foundation (1) The provisions of this Law on the re organisation of associations shall be
respectively applicable to foundations inso far as this Section does not prescribe
otherwise. (2) Reorganisation may be carried out only in the cases set out in the articles of
association. The reorganisation of a f oundation based on a will is not permitted. (3) The decision for reorganisation shall be adopted by the board of each foundation
involved in the reorganisation. The articles of association may prescribe that a decision
for reorganisation shall require the c onsent of another administrative body. The
decision for reorganisation shall be considered adopted if more than two thirds of the
board members vote in favour of it, and if th e articles of association do not prescribe a
greater majority of votes. The decision shall be prepared as a separate document. (4) The reorganisation agreement shall set out: 1) the name, registration number and legal address of the foundations involved in the
reorganisation; 2) the consequences of reorganisation for the employees of the foundations involved in
the reorganisation proceedings; and 3) in the case of division , the assets to be transferred to each foundation. (5) If another already existing foundation is not involved in the division proceedings,
the foundation being divided shall adopt a de cision on division, which shall replace the
agreement mentioned in this Section. In the decision on division, in addition to the
information mentioned in Paragraph Three of this Section, the name and legal address
of the acquiring foundation and information on the division of the assets of the
foundation being divided shall be set out in the decision on division. The document on
the division of assets may be attached to the decision as a separate document.

(6) A document which certifies the consent of other administrative bodies to the
reorganisation (if such consent is prescribed by the articles of association) shall be
additionally attached to the application for registering reorganisation in the register.
Transitional Provisions
1. The coming into force of this Law shall be determined by a special law. 2. Section 15, Clause 9; Secti on 19, Clause 2; Section 53, Cl ause 2; Sections 55 and 64;
Section 104, Clause 3; and Section 106 of this Law shall come into force at the same
time as the law which regulates the insolvency of associations and foundati
ons. This Law shall come into force on 1 April 2004. This Law has been adopted by the Saeima on 30 October 2003. President V.V īķe-Freiberga Riga, 14 November 2003