COMPANY REGISTRATION AND RESTRUCTURING

Where to start to acquire a company in Lithuania

Before starting a business, it is important to choose a legal form, which is usually determined by the objectives of starting a business in Lithuania. To date, one of the most popular forms of legal entity in our country is the private limited company (UAB). This is a legal entity with limited civil liability. This form of business is aimed at making a profit through commercial activities. Although the liability of a private limited liability company is limited, this form of business is most suitable for large companies, as it requires a significant amount of funds to form the authorised capital and has a more complex management structure. However, it is quite simple to take business decisions in such a company, as it is not required to have a board of directors.

A sole proprietorship (SE) is another popular form of business in Lithuania. It can be a great alternative to running a small business. Setting up such companies is convenient because the founder and owner can only be one natural person who cannot be the owner of another individual company. Since Lithuanian law does not require a minimum initial capital for the creation of such a company, it is possible to start a business with a good idea and a small initial investment.However, a serious disadvantage of this legal form is the unlimited liability.

Small partnerships are another relatively new legal form of company in Lithuania. It is a legal entity with limited liability. Although it does not require share capital, only natural persons can become founders, and accounting is only in some cases easier than in a private limited company. However, the establishment of companies through the creation of small partnerships is rapidly gaining popularity in Lithuania.

For non-commercial activities, it is proposed to set up a representative office of a foreign company. Registering it gives the entrepreneur very limited opportunities to do business, usually by performing certain representative or similar functions. Unlike a representative office, a branch may carry out commercial activities, but it is not an independent legal entity. Before registering a branch, you should carefully analyse the tax nuances that may arise both for the branch itself and for the registering company. Therefore, you should review and consider all the above aspects before setting up a company in Lithuania.

Based on practice and the factors listed above, foreign entrepreneurs often register a private limited company. One of the most important steps in the process of registering a company in Lithuania is the choice of the field of activity in which the entrepreneur plans to work. In order to carry out a certain type of activity in Lithuania, a licence is required. Therefore, this issue should be addressed in advance and experts should be consulted. It is also necessary to decide who will be the founders of the company. It is sufficient for one natural or legal person, but no more than 250 shareholders, to set up a private limited company in Lithuania.

Thus, a company in Lithuania (a private limited liability company) can be set up by either a natural or a legal person. The authorised capital of a private limited company is €2 500. This amount will be available for operations as soon as the company documents are completed.

It should be noted that a company’s director can only be a natural person, while a shareholder can be either a legal person or an individual, including a foreign representative. Thus, foreign nationals can be both directors and shareholders without restriction.

Setting up a company in Lithuania – key steps and stages

• Copies of the founder’s registration certificate and its articles of association are prepared, as well as a document stating who has the right to provide the legal entity with a translation into Lithuanian.
• A power of attorney, certified by a notary public, for the right to sign the memorandum of association, articles of association and registration is prepared if the founder is unable to visit a notary in Lithuania.
• Options for the name of the company to be set up are prepared. The name of the company must be written in Latin characters. It is advisable to prepare several possible options and to consult with company registration specialists. The chosen name should also be reserved in the register of legal entities.
• Drafting company statutes. The requirements of the Charter are laid down in the Law of the Republic of Lithuania on Joint-Stock Companies. Among other information, the articles of association should specify the activities of the company. These may be in free form.
• Establish a legal address in Lithuania. The company does not have to be located or operate at this address, but the written consent of the owner of the premises is required to register the company at this address in Lithuania. The company may use another address for its business activities, but this must be notified by filling in a special form.
• The name, surname, personal identification number (if any), passport number (accompanied by a copy of the passport) and address of the director of the future private limited liability company.
• Shareholder, company name, address and registration number. In the case of non-participating companies and individuals (or in the case of individual participants), the name, surname, personal identification number, passport number, address.
• A constitutive instrument (contract) is drawn up, which must contain all the necessary statutory provisions.
• A savings account is opened with a bank and the share capital is paid in.
• Completion and signature of the necessary forms for registering the company in the Register of Legal Entities.
• All documents are notarised in accordance with the established procedure and forwarded to the Register of Legal Entities.

Selling your company is another way to start a business

On the other hand, there is another, quicker way to open a company in Lithuania to avoid the registration procedures and save time. You can turn to specialists in the sale and establishment of companies and buy a ready-made company registered in Lithuania with a minimum share capital and a bank account.

Once you have acquired a ready-made company in Lithuania, a share purchase and sale agreement is concluded, after which you can start using the ready-made company immediately. It is worth noting that this way of starting a business is not only quicker, but also allows for certain reorganisation activities. However, this type of company formation is more expensive. It is possible to change the name of the company, increase the share capital and carry out other reorganisations if necessary. All these procedures are not very complicated and can be carried out in a relatively short period of time by the experienced professionals at Buhalteria.lt, but will require additional investment.

Each entrepreneur decides whether to set up a new company in Lithuania or buy a ready-made one, taking into account his or her own preferences, opportunities and needs. If you have any questions regarding the establishment, acquisition or sale of a company, you can get more information from the specialists of the Buhalteria.lt team at the following contacts.