[ESTABLISHING A BUSINESS ENTITY IN LITHUANIA] 309
ESTABLISHING A BUSINESS ENTITY IN LITHUANIA 1. Types of Business Entities Investors may choose from the following types of business entities:
association or if required by law. For example, the applicable law foresees that the annual financial statements of UAB shall be audited, if at least two of the following three criteria are met: net sales revenue during the reporting financial year exceeds EUR 3.5 million, asset balance value exceeds EUR 1.8 million, average annual number of employees exceeds 50. The auditor is elected, and his/her remuneration is set by the shareholders of the company; • bodies of the company: the general meeting and the head of the company are mandatory bodies for UAB and AB. One of the collegiate bodies (the board or the supervisory board) is mandatory for AB while formation of collegiate bodies for UAB is optional. For more comprehensive description of the bodies of the company, please refer to Article 3.1 below; • public trade of shares and bonds: AB can be listed in a stock exchange and sell its securities and bonds publicly. UAB securities and convertible bonds cannot be offered publicly, though there are no limitations in relation to offering bonds for a general public. A licence / permit may be required for certain regulated areas of activities. For instance, companies engaged in businesses such as insurance, banking, pharmacy, construction, transportation, etc. must obtain licences / permits. In certain cases, those licences / permits are either issued before the establishment of a company (i.e., its registration with the Register of Legal Entities) or after the establishment of a
Private limited liability company
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Public limited liability company
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Individual enterprise
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Limited partnership
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General partnership
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Small business
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Cooperative
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Agricultural company
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• Branch or representative office The most common types of business for foreign investors in Lithuania are private limited liability companies or branch. 1.1 Public and Private Limited Liability Company Public limited liability company (“akcine bendrove” or “AB”) and private limited liability company (“uzdaroji akcine bendrove” or “UAB”) are the mo st common types of companies in Lithuania. At the beginning of the third quarter of 2023, there have been 122,065 UAB and 260 AB registered with the Register of Legal Entities. The main differences between UAB and AB: • capital requirements: the minimum share capital requirement for UAB is only EUR 1,000, whereas for AB it is EUR 25,000; • auditing: AB must always have an auditor for the carrying out of the audit of its annual financial statements. UAB must have an auditor when it is established in its articles of
ILN Corporate Group – Establishing a Business Entity Series
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