Closed Joint-Stock Company UAB in Lithuania
Among the many existing options of organizational legal forms of ownership, such a type of company as a closed joint-stock company or Uzdaroji Akcine Bendrove is considered to be the best option for registration of new business in Lithuania.
It should be noted that today 9 out of 10 existing Lithuanian enterprises belong to the UAB format. This form is really convenient primarily because the owners and founders, as well as the shareholders, can be both Lithuanian citizens and non-residents.
The format of a UAB company has a number of advantages for the founders.The limited liability of the management for debts of a company should be mentioned, for example: the directors risk only their contribution to the authorized capital of a newly established enterprise, while personal property and finances remain protected.
You can always sell a Uzdaroji Akcine Bendrove company, as well as change the company’s shareholders, If necessary. An important feature of this type of a company is that it can easily use the services of banking institutions, so you will receive loans for work at minimum interest rates quickly and without obstacles.
Features of a closed joint-stock company in Lithuania
Enterprises in the format of Uzdaroji Akcine Bendrove organizational legal form of ownership are similar to limited liability companies or LLC, which have long been known to us in the domestic market. At the same time, there are certain differences.
For example, the entire authorized capital of Uzdaroji Akcine Bendrove is divided into securities – shares. At the same time the capital of a standard limited liability company is the participatory shares that you could present, sell or give by right of succession.
Authorized capital
To establish a Uzdaroji Akcine Bendrove it is necessary to deposit a minimum amount of the authorized capital into a special account in a Lithuanian bank. Currently, its size for legal entities is €2,9 thousand. It is not necessary to pay the entire amount at once, to start the activity it is enough to deposit the fourth part of it into the account. The remaining amount must be paid within the first year of the company’s operation.
You can replenish the account in various ways, ranging from a transfer from a foreign bank to cash deposits. The deposited funds are under protection of the bank and shall be released at the moment when the company is registered in the state register.
If for some reason you change your mind about registering a new enterprise in Lithuania in the Uzdaroji Akcine Bendrove ownership format, all funds transferred to the savings account shall be returned along the “reverse route” to the accounts of foreign banks or cash shall be given out to the persons who deposited them.
Shareholders of a Uzdaroji Akcine Bendrove company
In accordance with existing Lithuanian laws, a maximum of 250 people can be the shareholders of a company of the Uzdaroji Akcine Bendrove format. Owners, founders and directors can be any private individuals, as well as legal entities, including non-citizens of the Republic of Lithuania. An important plus of such an enterprise is that there are no restrictions on citizenship.
You become a shareholder of a Uzdaroji Akcine Bendrove if you have purchased securities (shares) of a newly established company. The purchase of shares requires execution of relevant documents. If there is only one founder, an act of establishment shall be drawn up. When there are two or more owners and founders, an alienation agreement shall be drawn up.
An important point that requires the attention of future owners and founders of companies in the Uzdaroji Akcine Bendrove format is that valuable shares of such enterprises cannot be bought or sold on stock exchanges, they shall not be available for free distribution.
Governing bodies and employees
Both one director and a specially formed collegial management body, which includes several persons with the right to vote, have the right to perform the functions of management of the company.
As for the company’s reporting, you will need professional specialists in accounting. An accountant himself or herself is not required when carrying out the economic activities of an enterprise in the country, but he or she is needed when it is necessary to organize an effective accounting system.
The owner of the company has several options to choose from. You can hire a separate staff unit who will be responsible for all accounting and reporting issues. Most often, to save money, companies hire outsourcing firms that work remotely.
This allows you to minimize the cost of a new employee in the state, including organization of a workplace, granting vacation pays, bonuses, payment for medical insurance, and so on.
Responsibility of founders
Among the many advantages of the Uzdaroji Akcine Bendrove format is the minimal responsibility of its founders. The founders risk only the amount contributed by each of them to the authorized capital in a bank savings account in a financial institution.
Personal property, bank funds on personal accounts shall not be subject to the risk of seizure in the event of force majeure situations related to the economic activities of a newly established company. Of course, there are some exceptions to this rule (for example, when the founder took a personal loan for operation of the company), however, they are quite rare.
To avoid such situations we recommend you to use assistance of the specialists of our company who will help you collect the necessary documents and resolve any issues with the relevant authorities when registering a closed limited liability company in Lithuania.
Alongside assistance in registration, we also offer additional services, among which remote accounting services, as well as professional legal assistance in resolving any situations may be of interest to you.
The process of registration of a closed joint-stock company in Lithuania
If you want to register a Uzdaroji Akcine Bendrove in Lithuania, you need to form an authorized capital, open an appropriate bank savings account, to which you can deposit the entire amount of the authorized capital or a part of it. In terms of time, the registration processes will take no more than 2 weeks, but, as practice shows, you can fit into 7 days.
You can register a Uzdaroji Akcine Bendrove for an individual or a legal entity. You can be present during the registration processes yourself or delegate your authority to a special trustee. In the latter case it is necessary to issue a notarized power of attorney.
Registration of a Uzdaroji Akcine Bendrove by a private person
A new company must have an original and unique name. You can choose both real and invented words and expressions. The use of numbers and letters, as well as abbreviations, is allowed. There are some restrictions associated with the coincidence of words in the name with terms of judicial, medical industry, legal proceedings, and government activities.
For example, in the name of a company you can not use the word “Lithuania” in all its variants without prior approval from the relevant authorities. Sometimes this requires permission from the government.
You will need an actual legal address of your company in Lithuania. If you are renting a work office space, you will need to obtain written permission from the owner, who shall agree to locate your company at this address for one year.
After opening a bank savings account and depositing the minimum amount of the authorized capital into it, a financial institution is obliged to issue a certificate on the current state of the account. This is necessary for the further registration of a Uzdaroji Akcine Bendrove enterprise and entering data about it into the state register.
So, what is required when registering a company by a private applicant:
- The unique name of the company and the conclusion on its entry into the Register of Lithuanian Legal Entities;
- Future type of economic activity (information can be submitted “in your own words” if it is difficult for you to find official analogues in the labor market);
- Valid legal address with permission to carry out the activities of the company from the owner of the premises;
- Certificate from the bank on the state of the savings account and the amount of the authorized capital on it;
- Information about the directors (full name, passport copies, address of residence and registration);
- Information about the shareholders (full name, copies of the passport, address of residence and registration, official acts on the alienation of shares).
You can register a Uzdaroji Akcine Bendrove in the Republic of Lithuania remotely. The presence of the founder of the company is not required if he or she is represented by a trustee. When registering the company you will need a notarized power of attorney granting the authority to sign to the representative of your choice.
The specialists of our company are always ready to help with registration of a Uzdaroji Akcine Bendrove in Lithuania. We will save your time and nerves by preparing the necessary packages of documents, translating and legalizing them with the appropriate apostille.
We will provide additional services in the form of applying for a temporary residence permit in Lithuania, if necessary. A residence permit in Lithuania is the first step towards naturalization in Europe with minimal effort on your part.
Registration of a Uzdaroji Akcine Bendrove by a legal entity
Similar to the first case, you will need to come up with an original company name. All of the above restrictions and permissions apply here. It is also necessary to determine the type of economic activity. You will need to have an actual office where documents will be kept and employees will work.
The enterprise itself is not obliged to be located at the specified legal address. If the premises are rented, you must obtain written permission from the owner to carry out such activities.
Among the documents for registration of a Uzdaroji Akcine Bendrove by a legal entity the following must be present:
- The unique name of the company and the conclusion on its entry into the Register of Lithuanian Legal Entities;
- Future type of economic activity (information can be submitted “in your own words” if it is difficult for you to find official analogues in the labor market);
- Valid legal address with permission to carry out the activities of the company from the owner of the premises;
- Certificate from the bank on the state of the savings account and the amount of the authorized capital on it;
- Information about the directors (full name, passport copies, address of residence and registration);
- Information about the legal entities – founders (name of the company, its registration number, exact address, copies of statutory documents and registration certificates);
- Information about the individual founders (full name, copies of passport data, exact address, certified copies of statutory documents, as well as acts on alienation of shares);
- A copy and original of the decision taken by the board to establish a Uzdaroji Akcine Bendrove, which shall be certified by a notary.
You can register a company in person or remotely by entrusting the authority to sign to a third-party authorized person. The power of attorney for the authority to sign must be notarized, after which this person shall have the right to sign the articles of association of the enterprise and the act of establishment of a Uzdaroji Akcine Bendrove.
Purchase of an existing Lithuanian company
Despite the fact that the registration of a closed joint-stock company takes minimum of time, sometimes every day counts. If there is no time to spare, you can consider options with the purchase of existing Lithuanian companies.
You do not need to go through the procedures of establishment, notarization, opening accounts and so on. After signing an agreement on the purchase of an enterprise, you will be able to start your activities in the country in just 2-3 days.
In order to purchase shares in an already existing company that has not performed any economic activity previously, it is necessary to sign the appropriate document of purchase and sale. After that, you accept the ready-made documentation and property of a Uzdaroji Akcine Bendrove, choosing the director of a new enterprise.
Should you buy an existing company or establish a new company Uzdaroji Akcine Bendrove in Lithuania? Each founder has his or her own point of view, as well as goals for the future business. In the first case you get the opportunity to significantly reduce the time limits for starting activities, in the second case, you get a unique name that can be used to promote your brand, for example.
The specialists of our company are always ready to help in opening a closed joint-stock company in the Republic of Lithuania. We will answer any questions and advise if necessary, offering the best solutions for each specific situation.