[ESTABLISHING A BUSINESS ENTITY IN LITHUANIA] 310
company before the actual commencement of activities. 1.2 Branch or Representative Office A branch and a representative office can be registered in the Republic of Lithuania, though they are not considered as distinct legal entities from the parent company. A branch is a structural subdivision of a legal entity, having its own registered office and performing all or part of the functions of the legal entity. A representative office is a subdivision of a legal entity, having its own registered office and the right to represent and defend the interests of a legal entity, enter into transactions and perform other actions on behalf of a legal entity, conduct export and import operations exclusively between foreign legal entities, which have established a representative office or related persons thereto. Legal entity assumes all obligations of a branch or a representative office. A branch and a representative office perform their activities under the regulations approved by the founder (legal entity). A branch or a representative office is established upon the decision of the founder (legal entity) to establish a branch or a representative office. Also, regulations of a branch or a representative office shall be prepared. There are no share capital requirements applied to a branch or a representative office under Lithuanian law. 2. Steps and Timing to Establish Generally, a company or a branch is established in two steps:
To establish a new company (the most common corporate structures for foreign investors – AB and UAB), the following main steps must be taken: • making an interim name reservation (optional); • signing of a Deed of Incorporation (or Agreement of Incorporation in case there are two or more founders); • obtaining a consent of the owner for premises wherein the company shall be domiciled (if the premises are not owned by the founders); • opening of an accumulative account at a bank or electronic money institution; • transferring of initial contributions to the accumulative account (initial contributions must be paid in a monetary form and must be not less than EUR 1,000 in case of UAB and not less than EUR 25,000 in case of AB); • signing of the Articles of Association; • drafting of a Report on Establishment of a Company (applicable to AB only) that shall be approved by the Founders’ Meeting; • convening of a Founders' Meeting; electing of the management bodies (always in case of AB and with respect to UAB – if such decision is not taken upon signature of a Deed of Incorporation or Agreement); • notarizing the establishment documents at the notary office; • registration of establishment documents with the Register of Legal Entities; • making entries into the securities’ accounts of each shareholder (applicable to UAB only);
adopting foundation documents and
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• registering the company with the Register of Legal Entities.
ILN Corporate Group – Establishing a Business Entity Series
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