Almost 13 years have passed since the moment when, with the amendments to the Commercial Law, it was possible to register a limited liability company with a reduced share capital. Already in the first year, many entrepreneurs used this opportunity, as a result of which the total number of new companies increased by 37.4% in 2010. Already in eight months of 2010, of all registered companies with limited liability, more than 40% of the share capital did not reach 2,000 lats or 2,845.74 euros, according to “Lursoft”.
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The data gathered by “Lursoft” reveal that in the period of time since May 1, 2010, 97.4 thousand small capital SIAs have been registered, in some cases their share capital was only 1 cent. At the same time, it should be noted that 42% of the small-capital SIAs registered in less than 13 years have already been liquidated.
“Lursoft” is investigating how successful the operation of the first small capital SIA was.
Research data shows that more than half of all small capital SIAs registered in 2010 have not been able to develop successfully. “Lursoft” data show that out of 5,178 small-capital SIAs registered in the first year, 3,000 have already been liquidated, while another 75 are in the process of liquidation. One of these companies was liquidated back in 2010, only four months after its registration, but the average life of the small capital SIA registered in 2010, but now liquidated, was 8 years.
Almost half of all small-capital SIAs registered in 2010, which continue to operate, have already increased their share capital to at least 2,800 euros, while the share capital of three companies even exceeds 1 million. EUR limit.
One of them is SIA “Legal Support and Accounting”, which was registered at the end of 2010 with a share capital of 1 lats, in November 2014 it was increased to 2,800 euros, and two weeks later – already to 4.94 million. EUR. Over the years, SIA “Legal Support and Accounting” has also changed its shareholders, since 2016 the company has become an Estonian capital company. Lursoft Multi report data show that the company’s turnover has been very modest throughout the years. The highest turnover was achieved in 2018, when it increased to 83 thousand euros. Last year, the company had a turnover of 51.43 thousand. EUR. SIA “Legal Support and Accounting” has no registered structural units or participation in other companies.
The second most significant increase in share capital is SIA “24D”, which, like SIA “Legal Support and Accounting”, was once registered with share capital of 1 lats. The company working in the real estate sector has experienced an increase in both turnover and profit in recent years, in 2021 its turnover reached 405.5 thousand. EUR, but the profit after tax is 141.97 thousand. EUR. The largest shareholder of SIA “24D” is holding AS “AB CITY” (99.87% of capital shares), which also owns SIA “Vitrum MT”, SIA “AB Celtnieks” and other companies.
Many small-capital limited liability companies registered in 2010 have proven with their performance that the decision to allow entrepreneurs to register limited liability companies with a smaller share capital, thus promoting the growth of the business environment, was correct. For example, the turnover of 41 of the analyzed companies exceeded 1 million in 2021. EUR, while 95 such limited liability companies employed at least 10 employees last year. Lursoft has researched that the small capital SIA registered in 2010 last year had a total turnover of 281.92 million euros, earned 21.47 million euros, and paid 26.16 million euros in taxes. It should be noted that these companies employed 5.5 thousand employees in 2021.
SIA “SNG group”, registered in May 2010, has been working with considerable growth for the last five years, according to the report data of “Lursoft” Multi. If in 2016 the company had a turnover of 175 thousand EUR, then rapid growth followed in the following years, as a result of which mobile phone and tablet wholesaler SIA “SNG group” reached 32.25 million EUR in 2021. EUR turnover, earning 1.1 million after taxes. EUR. The company explains the positive results with the review of the product portfolio, with the main focus on the most profitable year of economic activity, which is why the number of products in circulation has been significantly reduced. It should be noted that since May 2010, when SIA “SNG group” was registered with a share capital of 200 lats, not only the share capital of the company, but also the owner, have changed over time. Since February 2018, the share capital of SIA “SNG group” has been increased to 2,800 euros.
Among the small capital SIA registered in 2010, the second largest turnover in 2021 was “Depsol Technologies” SIA. Last year, the chemical wholesaler had a turnover of 12.26 million euros. The data of “Lursoft” show that the company was initially registered with a share capital of 500 lats, which was increased to 2000 lats in the summer of 2013, while since 2016 it has reached 94.94 thousand. EUR. Lursoft has investigated that the sole shareholder of SIA “Depsol Technologies” is Depsol Technologies LLC from the USA. It should be noted that foreign capital is only less than 5% of all small capital SIAs registered in the first year, which are still operating.
Initially, in 2010, SIA “Depsol Technologies” was registered under the name SIA “Rotcho”, which was changed to the current name in 2013. Lursoft’s data show that less than 13% of all small capital SIAs registered in 2010 have changed their name over time.
If both SIA “Depsol Technologies” and SIA “SNG group” have increased their share capital over the years, then in some cases, despite the growth of the company, the amount of share capital has remained unchanged during these almost thirteen years. This was the case with SIA “BLIKO” as well as SIA “Euro Building”. The turnover of both companies exceeded 1 million euros last year.
“Lursoft” data shows that the turnover of the food products wholesaler SIA “Bliko” exceeds 1 million euros for the last five years, and last year it already increased to 2.58 million euros. EUR, but the profit increased to EUR 301.24 thousand. The company’s turnover has remained constant throughout the years since its foundation in 2010. It should be noted that the company was once registered with a share capital of 20 LVL, currently it is still 28 euros. Meanwhile, SIA “Euro Building”, registered in the construction industry, which increased its turnover to 1 million in 2021. EUR, the share capital is still EUR 3. Lursoft’s inquiry information reveals that SIA “Euro Building” currently has several overdue payments registered, as well as accumulated more than 21 thousand. EUR large tax debt.
