The business lifecycle has three phases: formation, operation, and closure. While plenty is said about the first two, the third is discussed hardly at all. Yet it is the liquidation process that determines whether an entrepreneur can move on peacefully — or whether SRS debts, creditor claims, and legal problems will follow. SIA owners often fail to realise that maintaining a dormant company costs money, and improper closure can trigger personal liability. In this guide, we explain step by step how to properly close an SIA in Latvia in 2026.
When Liquidation Is the Right Choice
Before starting the process, it is worth considering all alternatives. Liquidation is not the only way to cease operations.
When to close an SIA:
The company no longer has any active business and there are no plans to revive it.
The company has fulfilled its purpose (e.g. a specific project is completed and a separate legal entity is no longer needed).
The company is unable to meet its obligations and there is no prospect of restoring solvency — in this case, an insolvency process should also be considered (this follows a different procedure).
Alternatives to liquidation to consider first:
Selling the company (sale of shares/capital parts). If the SIA has value (licences, contracts, customer base, name), it can be sold to another entrepreneur without closure.
Reorganisation (merger, division). If the SIA is part of a group, it can be merged into another company.
Administrative strike-off — initiated by the Commercial Register if the SIA persistently fails to file annual reports (8+ months past the deadline). This is not the recommended route, as it does not clear SRS obligations and may cause problems for shareholders in the future.
If you have decided in favour of formal closure, proceed with voluntary liquidation.
Two Routes: Voluntary Liquidation vs Administrative Strike-Off
Voluntary liquidation — a process in which the shareholders adopt a resolution to close the SIA, appoint a liquidator, and take all necessary steps to settle obligations and remove the company from the Commercial Register. This is the safe and correct path.
Administrative strike-off — if an SIA fails to file annual reports for more than 8 months after the deadline and ignores the Register's warnings, the Register may remove the company. However, in this case:
The SIA's tax debts do not disappear and may transfer to the board (the board member's joint and several liability).
Bank accounts may be frozen on the order of the SRS.
It is not possible to close the bank account or recover assets normally.
Conclusion: choose voluntary liquidation even if the company has no assets — it is the cheapest insurance against future problems.
Step by Step: The Voluntary Liquidation Process
1. Shareholder Resolution and Appointment of a Liquidator
Liquidation begins with a decision by the shareholders (owners). This is recorded as minutes of a shareholders' meeting (or a resolution if there is a single shareholder). The resolution states:
The decision to liquidate the SIA.
The appointment of a liquidator (name, surname, personal ID number, address). The liquidator may be an SIA shareholder, a board member, or an external person (lawyer, accountant). The liquidator takes responsibility for managing the process.
The date on which the liquidation commences (usually the date of the resolution).
Signing: the document must be signed by all shareholders using a secure electronic signature (eParaksts, Smart-ID) or a notarised signature.
2. Application to the Commercial Register (UR)
After the resolution is adopted, the liquidator prepares and files an application with the Commercial Register for entry of the commencement of the liquidation process (form KR13). The application must be accompanied by:
A copy of the shareholders' resolution.
The liquidator's consent to take office (signed).
A copy of the liquidator's identity document.
State fee: €75 (standard processing 1–3 working days) or €225 (expedited — 1 working day). Filing takes place electronically through the UR portal.
Once approved, the UR makes an entry in the Commercial Register stating that the SIA is in liquidation. From this point on, the word "likvidējamā" ("in liquidation") must be added to the SIA's name (e.g. "SIA ... likvidējamā"). This must be used on all documents, invoices, and stamps.
3. Publication and Creditor Claims Period
After the entry is made, the liquidator must publish a notice in the official gazette "Latvijas Vēstnesis" announcing that the SIA has entered liquidation. The notice must state:
The SIA's name and registration number.
The liquidator's name and address.
A call for creditors to submit their claims within 3 months from the date of publication.
Publication cost: approximately €30–50.
The creditor claims period of 3 months is a mandatory waiting period during which creditors may submit their claims. The liquidation cannot be completed without this period being fulfilled. Even if the SIA has no creditors, the period must still be observed.
4. Settling Debts and Selling Assets
The liquidator's duty is to identify all of the SIA's creditors, review the accounting records, and ensure that all obligations are settled. Actions:
Assess all assets (cash, receivables, fixed assets, inventory) and liabilities.
Sell assets (if necessary) to cover debts.
Settle all recognised creditor claims in the statutory order (first — tax debts, then — other claims).
If the SIA's assets are insufficient to cover all obligations, the liquidator must file an application for insolvency proceedings to be initiated. In this case, the liquidation converts into a different legal process.
5. Preparing the Final Liquidation Balance Sheet
After the creditor claims period expires and all obligations are settled, the liquidator prepares a liquidation closing balance sheet. This reflects the SIA's financial position at the point liquidation is completed: remaining assets, settled liabilities, and the surplus available for distribution to shareholders.
6. Distributing Remaining Assets to Shareholders
If assets remain after creditors have been satisfied (cash, property), they are distributed to shareholders in proportion to their capital shares. Here, the tax aspects are important:
The amount distributed is treated as a liquidation quota, which is taxable as a deemed profit distribution under the 20/80 formula (effective rate 25% of the net distributed amount).
CIT on the distributed assets must be paid before applying for deletion from the UR.
This is one of the areas where entrepreneurs most often make mistakes — they pay money to themselves without thinking about CIT, and then face an SRS debt after closure.
7. Final SRS (VID) Return and Clearance Certificate
The biggest challenge in the liquidation process. For the UR to delete the SIA from the register, a VID certificate confirming the absence of tax debts is required. This means:
All previously unfiled returns must be submitted.
All tax debts must be paid (including penalty interest and fines).
CIT must be calculated on liquidation quotas.
Once all obligations are settled, a VID clearance certificate must be requested.
Obtaining a VID certificate can take 2–4 weeks after filing the request, depending on the complexity of the SIA's tax history and whether VID needs to conduct a review.
8. Application to the UR for Deletion from the Commercial Register
Once the VID certificate is obtained, the liquidator files an application for the SIA's deletion from the Commercial Register (form KR14). The application must be accompanied by:
The liquidation closing balance sheet.
The VID clearance certificate (original or certified copy).
Confirmation that all creditors have been satisfied.
Proof of payment of the state fee: €20.
The UR reviews the application, and if everything is in order, makes an entry deleting the SIA from the Commercial Register. At that moment, the SIA officially ceases to exist.
9. Closing the Bank Account
After obtaining the UR deletion entry, the SIA's bank accounts must be closed. The bank usually requires the UR extract confirming the deletion. The account balance is paid out to the shareholders in accordance with the liquidation balance sheet.
The Liquidator's Role and Liability
The liquidator is responsible for managing the entire process from start to finish. Their duties include:
Identifying and notifying creditors.
Managing and selling assets.
Putting the accounting records in order and preparing the final accounts.
Communicating with the SRS and the UR.
The liquidator is personally liable for losses caused through their fault. Choosing the right liquidator is therefore a serious decision — if the process is complex, it is advisable to engage a professional lawyer or accountant.
Costs and Timeline
Minimum mandatory costs (if everything is simple, with no debts and no SRS issues):
Item | Amount |
|---|---|
UR fee for liquidation entry (KR13) | €75 (standard) / €225 (expedited) |
Publication in "Latvijas Vēstnesis" | €30–50 |
UR fee for deletion (KR14) | €20 |
Total state fees | ~€125 |
Additional costs (if required):
Professional liquidator's fee: €500–2,000+ depending on complexity.
Accountant's fees for preparing final accounts: €200–500.
SRS penalty interest and fines, if any have accrued.
Timeline (ideal scenario):
Stage | Duration |
|---|---|
Shareholder resolution and liquidator appointment | 1 day |
Application to UR and entry making | 1–3 working days |
Mandatory creditor claims period | 3 months |
Settling debts, distributing assets, SRS return | 2–4 weeks |
UR deletion after obtaining VID certificate | 1–3 working days |
Total minimum time | ~4 months |
In practice, the process can take 5–8 months if there are delays with the SRS, creditor disputes, or complex asset sales.
What Happens to Your Personal Liability After Closure
After the SIA is deleted from the Commercial Register:
Shareholders (owners) are not liable for the SIA's obligations with their personal assets, unless there has been wrongful conduct, fraud, or personal guarantees.
Board members may be held liable if it is proven that they failed to take the necessary steps in the event of insolvency or failed to hand over documents to the liquidator.
Tax debts remaining after the SIA's closure may be recovered from board members jointly and severally if the SRS proves that the board failed to act with due care.
That is precisely why it is critically important to complete the entire process formally, not simply to "abandon" the SIA. An unresolved SRS return and failure to obtain UR deletion are the main reasons why, years later, an entrepreneur may receive an SRS claim for a long-closed company's debts.
Liquidating an SIA is a process that requires patience and precision, but it is not insurmountable. The most important rule is: do not ignore it. The worst thing you can do is leave the SIA "dangling" unsupervised. Our team assists with managing the liquidation process, SRS returns, and the preparation of final accounts — so you can close this chapter with peace of mind.
Last updated: May 2026. Information is based on the Commercial Law, the Law "On Taxes and Duties", and official UR and VID materials.
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