The main laws the companies must obey in Lithuania are related to the Civil Code and the Law on Companies.
The Law on Companies regulates activities such as: registration, liquidation, transformation, division, rights and duties of the members, registration of the branches.
Also, in this law are specified all the details regarding the content of the documents necessary for incorporation. The Articles of Association must contain: the name of the company, the name of the incorporator, headquarter, type of business, shares related procedures, the power of the general Meeting and ways of choosing the Supervisory Board, the procedure of liquidation or reorganization the company.
The reorganization of a company in Lithuania has the main advantage that the company doesn’t need to be liquidated. The reorganization may be accomplished through merger, division or changing status.
The merger can be made in two ways: by transferring all the assets to another company or by combination of several companies into a newly formed one.
The division can take place by distributing the assets among several companies, by incorporating new firms from one or by separating only some parts of the assets and join it to another company or a newly formed firm.
A company may be changed from a private limited company to a public limited company if the specific criteria are met and the shares are registered at the Securities Commission or from a public one to a private by deleting its shares from the Securities Commission.
In all the above cases of reorganization, the Articles of Association must be amended and register at the Public Institution Register Centre. Also a plan of reorganization must be filled.
The liquidation may be a necessary process if the company is only temporary and the term has expired, at a General Meeting decision, if the creditors have requested so and filled up a bankruptcy file or if the appointed Court has decided that the company was breaking the law.
The liquidator must be nominated by the institution that has decided to liquidate the company. In the same day, the previous managing body must cease its activities and the liquidator must take its attributions. These activities must only be related to the liquidation process. The decision must be registered at PIRC and all the shareholders and creditors must be announced in person.
If the company doesn’t have the possibility to pay its debts, but there are shareholders that haven’t fully paid their shares, then these members are required to do it.
After two months from the last announcement regarding the liquidation and after paying the company’s debts, the remains assets may be redistributed to the shareholders up to their contribution in the company.
The last step is erasing the company from the Registers.