[ESTABLISHING A BUSINESS ENTITY IN LITHUANIA] 312
However, please note that in case the founder is a foreign legal entity or a foreign natural person, who does not have the above- mentioned digital or mobile signature, there is no possibility to register UAB online. In such a case UAB establishment documents (including the extract of the founder from the foreign register, copy of articles of association of the founder, etc.) should be submitted to the notary for prior notarization procedure. Documents issued by the foreign state officials must be officially certified (i.e., apostilled or legalized) and translated into Lithuanian language. 3. Governance, Regulation and Ongoing Maintenance 3.1 Corporate Governance The company (UAB and AB) shall always have the general meeting of shareholders and the head of the company. The board (collegiate management body) is not a mandatory body in UAB, whereas in AB at least one collegiate body shall be formed (the supervisory board or the board). In case the supervisory board is not formed in a listed AB, the supervisory functions shall be delegated to the board. The general meeting of shareholders shall be the highest decision-making body. The annual general meeting of shareholders shall be convened no later than 4 months from the close of the financial year of the company. The head of the company (CEO) shall be a single-person management body of the company. The CEO must be a natural person. The company shall be solely represented by the CEO acting on behalf of it, he/she has a duty to ensure the day-to-day activities of the company. Members of the board must be natural persons and members of supervisory board may be natural persons or legal entities. At least 1/2 of the supervisory board members and the
members of the board which performs the supervisory functions shall be not employed at the company. At least 1/3 of the members of supervisory board of listed AB as well as the members of the board of listed AB which performs the supervisory functions must meet the statutory independence requirements (e.g., not have an employment relationship with the company, parent company or subsidiaries for at least one year, not to be a member of the company's collegial body for more than 10 years, etc.). Specific laws that regulate activity of the company it is engaged in, soft law or company’s policies may provide for additional independence requirements. Members of the board and the CEO must act in good faith and reasonable manner in respect of the company and members of other bodies of it. Furthermore, they must be loyal to the company and maintain confidentiality. Member of the board and the CEO of the company who fails to perform or performs improperly his/her duties set in laws or incorporation documents (e.g., duty of confidentiality, care) must redress all damage incurred on the company, if all the conditions of civil liability are proven (unlawful actions, damage, causal link between unlawful actions and damage and fault). An audit committee must be formed in a company if it meets the criteria of a public interest entity (e.g., listed AB, banks, Central Credit Union, insurance company, etc.). The audit committee shall be responsible for supervision of financial reporting and audit process, the effectiveness of internal quality control, risk management and internal audit systems as well as the related party transactions. The general meeting of shareholders of listed AB at least every 4 years shall approve the remuneration policy. The remuneration policy
ILN Corporate Group – Establishing a Business Entity Series
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