MB ACCOUNTING

A small partnership (LLP) is one of the most popular legal forms in Lithuania, and is most often chosen by small businesses or start-ups. It is easy to set up and flexible enough to manage, which makes it particularly suitable for those who want to formally run their business, while avoiding complex set-up and administration procedures.

Accounting for an LLP is the recording, organising and processing of the partnership’s financial data. Recording income and expenses, tax returns, reporting, payroll, paperwork. Although the law allows the management of the accounts of a small partnership to be carried out by the manager himself, more and more people are choosing to entrust them to professionals.

This information is for business owners who are planning to set up a small partnership or who already have an MB and are looking for reliable accounting services. For small businesses, a properly chosen accounting strategy not only ensures compliance with the law, but also business stability and growth. That is why it is important to understand how this form of business differs from others, what its main advantages are and what nuances are involved in keeping accounts.

MB as a legal form, essential features

A small partnership is a legal person with limited civil liability. This means that the obligations of the company are solely the responsibility of the company and not of the members’ personal assets. An LLP is based on voluntary participation and can be set up by one or several (up to ten) natural persons. It does not require any share capital, making it the perfect solution for those who want to start a business with minimal investment.

Members of an MB can operate without employment contracts, using civil agreements to carry out activities or withdraw funds. This flexibility reduces administrative burdens and lower fees increase operational efficiency. On the other hand, an MB cannot have legal persons as members and the responsibility for the performance and accuracy of the accounts lies with the members or the manager.

In addition, the MB form is attractive for those who are looking for a simpler business model than a limited liability company, but want to operate professionally and with legal clarity. However, the accounting and tax requirements for this form are specific, so it is important to assess in advance whether you have the knowledge and resources to implement them on your own, or whether you would prefer to seek the advice of experienced accountancy professionals.

Accounting specifics, what is mandatory and what is optional?

Although the law allows you to keep accounts without an accountant, most small partnerships still choose to work with professionals to keep accurate accounts and comply with all legal requirements. The accounts can be kept by one of the members of the LLP or by its manager. However, this is only recommended if the person has the relevant knowledge and experience, as even in a small company it is important to ensure that declarations are submitted on time, that taxes are correctly calculated and that financial documents are accurate.

The accounting treatment of an LLP becomes more complex when the partnership expands its activities, such as by becoming VAT-registered, employing staff, generating more income or acquiring fixed assets. For example, once the annual turnover reaches €45,000, the LLP must register for VAT.

The accounts of an MB must record all income and expenses, keep a cash book, submit reports to the Tax Inspectorate, SODRAI and the Centre of Registers, and at the end of the year, prepare annual financial statements: a balance sheet and a profit-and-loss account. At the same time, even if the partnership is not active, it is still necessary to submit the declarations on time.

Who should you trust to do your accounting, do it yourself or hire a specialist?

Although the law allows the members or the manager to keep the accounts of an MB, in practice this is often a challenge. Even for simple activities, it is important to meet deadlines, understand tax obligations and keep abreast of changes in new legislation.

Many managers try to do everything themselves and end up making mistakes: miscalculated taxes, late declarations, confusion between personal and company funds. It is also often forgotten that, even if the business is not active, returns must still be submitted on time. Although self-management of finances may seem like a cost-saving measure, the cost of mistakes can range from interest penalties to serious legal consequences.

In such cases, it is much safer to outsource this part. Professionals ensure that the paperwork is handled correctly and that in case of mistakes, they are held accountable – they are covered by public liability insurance and keep up to date with changes in legislation. In such cases, the business owner can concentrate only on his core business and leave the financial supervision to experienced professionals.

As the volume of business grows or the number of transactions increases, bookkeeping becomes more and more important – which is why many small partnerships turn to accountancy firms at an early stage. In many cases, the most effective solution is to work with an external accountancy firm that offers a wide range of services, from day-to-day paperwork to annual reporting and advice.

Why outsource your accounting?

Outsourced accounting for a small partnership is a practical choice that allows you to ensure professionalism without the additional worries of hiring, qualifying or maintaining accounting software. One of the main advantages is the uninterrupted service: you don’t have to worry about whether your accountant is ill or on holiday, because the work is done on time and is the responsibility of the entire accounting firm. This is particularly useful for start-ups, as they are only paid for work actually carried out. The cost of the service varies according to the volume of work and is not fixed from day one, as it would be with an employee. In addition, working with a company that has more than one specialist ensures a greater wealth of knowledge, a wider range of experience and a sharing of responsibilities. It is worth noting that accountancy firms are usually covered by public liability insurance, so the risk of mistakes is reduced both financially and psychologically.

Common mistakes

1. Small partnership owners, especially those who choose to do their own bookkeeping, often make mistakes that can lead to financial or legal problems. One of the most common is the improper and insufficient registration of documents. Invoices, bank transactions, cash movements, all need to be properly recorded and documented.

2. Another common problem is missing tax deadlines and filing deadlines. Even if the MB is not active or has no employees, certain mandatory documents still have to be submitted by the deadlines. Late submission of PSD or GPM returns, inaccurate VAT data can result not only in late payment penalties but also in unpleasant attention from public authorities.

3. It is also important to be aware of the tax obligations of MB members to SODRAI and VMI. Many people do not realise that, even in the absence of a formal employment contract, members have to self-declare and pay PSD and GPT, and pay the relevant taxes on the profit distributed. Another common mistake is not separating company funds from personal funds. This can be considered as financial mismanagement for the business and can lead to additional problems. Therefore, even with a simple business model, it is worth at least periodically consulting professionals or choosing external services.

MB accounting services with Baulera.lt

Baulera.lt, a brand owned by Baulera UAB, has been providing professional accounting services to small partnerships for more than 10 years. Our clients range from start-up small partnerships looking for a reliable partner for their start-up, to growing or established companies that are not only interested in accounting for financial data, but also in detailed management accounting, process control and long-term efficiency growth.

We are transparent, clear and always answer your questions. Whether you’re just planning to set up an MB or you already have a company. We will help you both in the initial step and in the day-to-day development of your business. Our clients appreciate our promptness, our responsibility and the fact that we always speak in a simple and understandable way. You don’t have to go through the law, that’s our concern.

Our specialists have worked with small partnerships in a wide range of fields – from services, transport and logistics to manufacturing and e-commerce – and are able to adapt to the specifics and needs of different activities. Our work is guided by the principles of quality, professionalism and confidentiality. We advise on tax, labour relations and company optimisation issues, and we represent VMI, SODRAI, the Centre of Registers and the Department of Statistics.

We organise and consult on accounting both remotely and on-site, depending on the client’s needs. This is particularly convenient for entrepreneurs from different cities in Lithuania or living abroad. We take into account the nature of the business, the number of documents, the number of employees and other criteria. This allows us to offer an optimal price/quality ratio. The cost of MB accounting services starts from EUR 100 per month, but the final price depends on the specifics of the business and the volume of work.

When you choose Baulera.lt, you are investing not only in your bookkeeping but also in your peace of mind. Let us take care of the numbers so you can concentrate on growing your business.