This article examines the legal framework surrounding the misuse of corporate assets in Latvia, with a specific focus on the relevant criminal liability provisions as of 2025. Readers will find a breakdown of the main sections of Latvian law that address corporate asset abuse, including the types of conduct criminalized, legal references, and practical compliance insights for company directors and shareholders operating in Latvia.
Overview of Legal Policies on Misuse of Corporate Assets in Latvia (2025)
Latvia maintains clear criminal liability for misuse of corporate assets, targeting conduct where company representatives employ assets for personal use or unauthorized purposes. The relevant statutes are covered extensively in the Latvian Criminal Law. In 2025, both company officials and sole directors/shareholders are subject to these provisions if intent to unlawfully appropriate company assets is present—even in cases where there is no external third-party harm.
Key Legal Provisions
| Relevant Law (Latvian Criminal Law) | Summary of Provision |
|---|---|
| Section 179 (Misappropriation) | Targets unlawful appropriation of assets entrusted to an individual, including scenarios where directors or shareholders use company property for personal gain. |
| Section 196 (Abuse of Powers by an Official) | Applies when persons exercising official duties abuse their powers to the detriment of a legal entity, including misuse or personal use of company assets. |
| Section 177 (Fraud) | Covers acts of deceit related to company asset management or appropriation, penalizing intentional misrepresentation leading to asset misuse. |
| Section 169 (Unlawful Activities with Property of a Legal Person) | Provides further sanctions for unauthorized or illegal actions involving company property by persons in control or fiduciary positions. |
Director and Shareholder Risks
Company directors and even sole shareholders in Latvia are not exempt if company assets are used for personal purposes. Latvian law makes it explicit that the criminal liability framework applies even where there is no prejudice caused to a third-party—what matters is the intent to unlawfully appropriate corporate assets.
These policies reflect Latvia’s commitment to ensuring corporate governance and accountability at all levels. Intentional misuse is prosecuted regardless of company size or structure, and the provisions are equally applied to large corporations, SMEs, and private limited companies with a single shareholder-director.
Application of Criminal Liability for Misuse of Corporate Assets
The following table summarizes how Latvian law treats key aspects of corporate asset misuse during 2025:
| Aspect | Criminal Liability (2025) |
|---|---|
| Misappropriation of Assets | Yes, under Section 179 |
| Abuse of Position | Yes, under Section 196 |
| Acts of Fraud | Yes, covered under Section 177 |
| Unlawful Use by Sole Director/Shareholder | Yes, Sections 169 & 179—liability attaches even without third-party loss if unlawful intent proven |
Compliance Insights: What Triggers Criminal Liability?
- Intent: Prosecutors assess whether the individual had the intent to unlawfully appropriate or use company property.
- Actual Use: Even isolated or seemingly minor uses can be subject to prosecution if not properly documented, justified, or authorized.
- Position: The law covers all company representatives—directors, managers, and major shareholders—regardless of formal job title.
Practical Pro Tips for Mitigating Legal Risks
- Document all asset-related transactions: Ensure any use of company property is properly authorized and recorded in internal documentation or meeting minutes.
- Establish clear company policies: Formalize internal procedures that outline when, how, and by whom corporate assets may be used, with periodic reviews for compliance.
- Separate personal and company assets: Do not blur lines between personal and corporate property, particularly for sole directors/shareholders, to avoid accidental violations.
- Seek legal review before unusual transactions: When in doubt, obtain qualified legal advice before approving unusual or large-value transactions involving company assets.
Key Sources for Official Guidance
In summary, Latvia enforces strict criminal liability for any misuse of corporate assets, governed by multiple sections of its Criminal Law with application to all company representatives. Demonstrating clear intent to unlawfully benefit from company property is sufficient for prosecution, even where no third-party is harmed. Clear policies, detailed documentation, and robust compliance procedures are essential safeguards for anyone managing or owning assets in Latvian companies in 2025.