Types of Lithuanian Companies

Updated on Tuesday 08th January 2019

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types-of-Lithuanian-companies.jpgLithuania is one of the most prolific countries in the European Union as it attracted a great number of investors from all over the world in the past few years. According to statistics, close to 2,000 small and medium-sized enterprises (SMEs) are registered annually in Lithuania.

Those who want to start a business in Lithuania must comply with the local legislation which is the Commercial Code and must first choose one of the types of companies available for registration.

Our company formation agents in Lithuania can help you choose the right type of entity based on your needs and activities.

What are the main types of companies available for registration in Lithuania?

The following types of companies can be registered in Lithuania according to the Company Law:

  • - the sole proprietorship;
  • - the private limited liability company, shortly known as the UAB;
  • - the public limited liability company, or the AB;
  • - the partnership, which can be general or limited and known as the KUB.

Foreign companies are also allowed to operate on the Lithuanian market through subsidiaries which are usually registered as limited liability companies, branch offices and liaison or representative offices.

The sole proprietorship in Lithuania

The sole proprietorship is formed by one single unlimited liability person. There is no minimum share capital request. In order to open a sole proprietorship here are the steps that must be followed: company name reservation at the Public Institution Register Centre, notarize the Articles of Incorporation.

Limited liability companies in Lithuania

If an investor has available approximately 2,900 Euro, he may open a private limited liability company. The UAB may be formed by one single shareholder with limited liability on debts and profits. The limited liability company is the most employed type of company in Lithuania thanks to the low share capital requirements and the less stringent shareholding requisites. At least 25% of the share capital must be deposited upon the formation of a limited liability company in Lithuania.

 With a higher share capital, the investors may open a public limited liability company. The minimum amount of money required to set up an AB in Lithuania is close to 45,000 euros, out of which 25% must be deposited upon incorporation.

The members’ liability is up to their contribution. All the important decisions are taken by the General Meeting of the Shareholders and a Board of Management must be appointed.

Partnerships in Lithuania

The general partnership is based on a signed Agreement between two or more partners with equal liability and contribution. It has the main advantage it is not based on a minimum share capital. The general partners agreement must contain the following: the name of the partnership, information regarding the members, information regarding headquarters, the type of business, procedure regarding the covering of the incorporation costs, the amount of contribution of each member, time of expiration when it is a temporary company, the date of signing the agreement. It must also contain information regarding the procedures of transferring the shares, on accepting new partners and regarding the opening of subsidiaries.

limited partnership is formed by two or more members with different roles in the company, according to their financial contribution. There are the limited liability partners and the general partners with no limited liability and decisional power in the company. An agreement must also be signed. The name of the general partner and the limited partner must be underlined in this document. There is no minimum share capital request.

Branch and representative offices in Lithuania

Compared to the subsidiary, the branch office is linked to the parent company in terms of activities and control. One of the requirements related to setting up a branch office in Lithuania is related to having a local representative who acts as a manager.

When it comes to the liaison office in Lithuania, this will act as a contact point between the parent company and the customers and business partners in Lithuania. The representative office cannot engage in any commercial activity, but it is required to have an office space in Lithuania.

Company formation steps in Lithuania

The company registration process in Lithuania starts with a reservation for the trade name with the Centre of Registers, followed by the preparation and notarization of the company’s Memorandum and Articles of Association.

Following these, the next steps must be completed:

  • - opening the corporate bank account where the share capital is deposited;
  • - filing the incorporation documents together with information on the company’s shareholders and directors with the Trade Register;
  • - registering for tax and VAT purposes;
  • - registering for employment and social insurance purposes.

Once the Trade Register issues the Lithuanian company’s Certificate of Incorporation, the necessary business permits for operating must be obtained. These are issued by specific authorities in the field of activity of the company.

For full information on the types of companies available for registration, you can rely on our Lithuania company formation specialists. Please contact us if you need assistance in registering a company in Lithuania.

 

Partner: Firmengründung in LitauenРегистрация фирм Литва

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