Changes to the Companies Act for the Republic of Lithuania Apr 21, 2010
On 1 March 2010, important amendments to the Law on Companies in the Republic of Lithuania (hereinafter – the “Companies Act”) came into force. The key goal of these amendments was the simplification of the rules applicable to private limited companies and the improvement of the business environment. To this end, the option to establish a private limited company using sample establishment documents has been made possible. What is more, it is possible to avoid a constitutive meeting of the shareholders provided the governing bodies of the would-be company are clearly indicated in the incorporation act thereof.
Moreover, taking due account of up-to-date communication technologies and implementing European Parliament and Council Directive 2007/36/EB of 11 July 2007, the Companies Act provides the possibility for shareholders to participate and vote in the shareholders’ general meeting via electronic communications, as well as the possibility for the board members of the company to authorise other board members in a simple written form. Furthermore, the list of shareholders’ non-property rights was expended and shareholders obtained the right to authorise any legal or natural person to act as his/her representative in their relationship with the company.
One of the most fundamental changes in the Companies Act implementing the Twelfth Council Company Law Directive (89/667/EEC) and seeking to ensure business transparency is the obligation for private limited liability companies to provide the Company Register with lists of shareholders indicating the names of the shareholders, their registered addresses (or alternatively the address for correspondence), the number of shares held and dates of acquirement thereof. This obligation is due as of the date of incorporation. However, for existing companies, a transitional period has been set: they must disclose their shareholders by 1 October 2010.
Finally, some changes to the management of companies have been made. Under the former wording of the Companies Act, the board of the company was authorised to take decisions for the investment, pledge, transfer and acquisition of long-term assets exceeding 1/20 of the share capital. As this amount has been considered to be too small for the companies with a minimum authorised capital, the possibility for the shareholders to indicate a higher margin in the bylaws has been set. The manager of the company, on the other hand, has acquired the right to resign at his/her own initiative with 15 days advance notice. Also, the requirement to present a sample of the manager’s signature to the Company Register has been recalled.
For further information please contact Ms Živilė Paškevičiūtė
One of the most fundamental changes in the Companies Act implementing the Twelfth Council Company Law Directive (89/667/EEC) and seeking to ensure business transparency is the obligation for private limited liability companies to provide the Company Register with lists of shareholders indicating the names of the shareholders, their registered addresses (or alternatively the address for correspondence), the number of shares held and dates of acquirement thereof. This obligation is due as of the date of incorporation. However, for existing companies, a transitional period has been set: they must disclose their shareholders by 1 October 2010.
Finally, some changes to the management of companies have been made. Under the former wording of the Companies Act, the board of the company was authorised to take decisions for the investment, pledge, transfer and acquisition of long-term assets exceeding 1/20 of the share capital. As this amount has been considered to be too small for the companies with a minimum authorised capital, the possibility for the shareholders to indicate a higher margin in the bylaws has been set. The manager of the company, on the other hand, has acquired the right to resign at his/her own initiative with 15 days advance notice. Also, the requirement to present a sample of the manager’s signature to the Company Register has been recalled.
For further information please contact Ms Živilė Paškevičiūtė
