Stock Corporation

General Information

The AB offers the advantages of liability limited by shares, relatively easy transfer of shares and access to stock markets. It is therefore usually chosen by larger businesses. Statutory governance structure and rules on capital protection are particularly strict.

Incorporation

Formation by at least one person - individual or legal -nationality irrelevant.
Incorporation requires incorporation agreement/statement and notarial certification that legal framework was obeyed. Additionally, founders must open a general securities account with the Central Securities Depository prior to payment of initial shares. Company must then be registered in Register of Legal Entities.

Duration of incorporation approximately 1 - 8 weeks.

Incorporation costs of about LTL 500 (approximately € 150; consisting of notarial and registration fee).

Capitalisation and Financing

The statutory minimum share capital amounts to LTL 150,000 (approximately
€ 44,000). Contributions can be made in cash or kind. Prior to incorporation, at least one-quarter of capital must be paid up, if shares are paid in cash, or whole amount, if shares are paid in kind. Remaining cash contributions must be paid up within 12 months after execution of incorporation agreement/statement.

Board Structure

An AB is managed by its managing director (vadovas) in and out of court. The managing director is responsible for the day-to-day management of the company and cannot be instructed by shareholders' meeting.

Shareholders' decisions are made by way of shareholders' resolutions at shareholders' meeting (visuotinis akcininkų susirinkimas).
Ordinary general meeting must be convened annually within four months of end of company's previous business year. Extraordinary meetings shall be convened in certain cases required by law or by-laws of the company, or upon request of supervisory board or shareholders having initiative right.

The establishment of a board (valdyba) and/or a supervisory council (stebėtojų taryba) is common but optional and may be decided upon by the shareholders.

Annual Costs

None.

Corporate Taxation and Financial Reporting

All legal entities registered in Lithuania as well as foreign companies receiving income from permanent establishment in Lithuania or income related to business in Lithuania are subject to corporate profit tax. Tax rates range from 10 - 15 %.
Annual accounts shall be approved by the shareholders' meeting within four months of the end of the business year. Generally, accounts must contain a balance sheet as well as an income and cash flow statement. Companies considered "small", may be granted certain relief from reporting requirements.
Accounts have to be drawn up in accordance with Lithuanian accounting standards (LAS).

Employee Participation in Corporate Bodies

None.