UAB (in Lith. – Uzdaroji Akcine Bendrove) – the most common organizational and legal form of legal entities in Lithuania. This is generally consistent with the concept of a limited liability company (LLC). Therefore, when it comes to the company registration in Lithuania, it is implied the registration of the UAB.
There are several other forms of doing business. For example, you can operate as an individual enterprise (in Lithuanian — “Individuali Imone” or “II”) or small partnership (in Lithuanian — “Mazoji Bendrija” or “MB”). The registration process of MB and II is similar to the registration process of UAB, however, due to some features of taxation the number of registered small and individual enterprises is significantly lower than UAB.
It is also possible to register representative office or a branch of a foreign company in Lithuania, however, the registration process is more complicated in comparison with the above-mentioned companies.
Establishing a company in Lithuania usually takes about 5 business days.
In some cases, registration of the company via the Internet is possible, as well as the purchase of a ready-made company in Lithuania.
Minimum share capital of UAB has to be not less than 2 500 EUR.
The cash contribution must be at least 2 500 EUR, the remaining amount can be paid by property. The non-cash contribution is assessed by a certified assessor according to special rules. Funds for the formation of a share capital may be transferred from another bank account, including foreign accounts.
The number of shareholders may be from 1 to 250. Shareholders can be individuals or legal entities, including non-residents of the Republic of Lithuania.
An individual can be appointed as a director, including non-residents of Lithuania. Once UAB is registered, the employment contract should be concluded with the director. In this case, the employment permit for the director is not required.
The management bodies are the General shareholders meeting and the director. A supervisory board may also be established. There is an opportunity to establish a collegial body instead of a single director.
In order to convert the savings bank account to the checking, the personal presence of company's director is required. It typically takes one business day. This process is accomplished after the establishment of the UAB. If the director does not wish to convert the already opened account with the paid-in share capital, he can open a checking account in another bank or another country.
The decision to liquidate a company is taken by the general meeting of the shareholders. The insolvent company is liquidated in the order established by the Law on Enterprise bankruptcy.
The general meeting of the shareholders appoints a liquidator who acquires the rights and obligations of the head of the company. The liquidation of a company shall be announced publicly no less than three times at no shorter than 30 days intervals in the source specified in the charter or only once, however each creditor of the company shall be personally notified thereof.
After the discharge of liabilities to the creditors, the remaining assets shall be distributed to the shareholders in proportion to the par value of the shares held by them by ownership right. The absence of debts of the company shall be confirmed by the Tax Inspectorate.
An average time to liquidate a company in Lithuania is between 4 to 8 months. However, this process may be delayed if violations or disputes occur. As practice shows, if the company (II or UAB) had low turn over the liquidation process is easier and faster.