Establishment of MB

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> Establishment of MB

Establishing a MikroĮmonė (MB), or Microenterprise, in Lithuania is a streamlined process:

  1. Choose Business Name: Select a unique name and ensure it’s available.
  2. Prepare Documentation: Draft and notarize the company’s statutes and obtain a registered legal address in Lithuania.
  3. Register the MB: Submit registration documents to the State Enterprise Centre of Registers, including proof of identity and address.
  4. Tax Registration: Register with the State Tax Inspectorate for VAT and other taxes as needed.
  5. Open a Bank Account: Set up a business bank account in Lithuania.
  6. Compliance: Adhere to local accounting and reporting requirements.

The MB is ideal for small businesses due to its flexible structure and simplified regulatory requirements.

Establishing a MikroĮmonė (MB), or Microenterprise, in Lithuania involves a series of detailed steps designed to ensure compliance with local regulations while benefiting from a simplified administrative process. Here’s a comprehensive guide:

1. Understanding MikroĮmonė (MB)

Description:

  • MB is a simplified form of a private limited company, specifically designed for small-scale enterprises.
  • Share Capital Requirement: No minimum share capital is required.
  • Liability: Shareholders have limited liability, meaning their financial risk is limited to their investment in the company.

2. Pre-Registration Requirements

Business Name:

  • Choose a Name: Ensure the business name is unique and not already registered. You can verify name availability through the State Enterprise Centre of Registers.

Legal Address:

  • Address Requirement: The MB must have a registered legal address in Lithuania, which can be a physical or virtual office.

3. Drafting and Notarizing Documents

Company Statutes:

  • Prepare Statutes: Draft the company’s statutes (articles of association) outlining the operational and structural rules. This document should specify the business’s purpose, shareholder rights, and management structure.
  • Notarization: While not always mandatory for MBs, notarizing the statutes is often advisable to ensure legal validity and smooth registration.

4. Company Registration

State Enterprise Centre of Registers:

  • Submit Documents: Register the MB with the State Enterprise Centre of Registers. Required documents include:
    • Completed registration form
    • Statutes of the company
    • Proof of address
    • Proof of identity of the founders
    • Bank confirmation of the deposited share capital (if applicable)

Registration Process:

  • Application Submission: Submit the registration application either online through the Centre’s portal or in person. Online registration is often quicker and more efficient.

5. Tax Registration

State Tax Inspectorate:

  • Register for Taxes: After registration, the MB must register with the State Tax Inspectorate. This includes:
    • VAT Registration: If the MB’s taxable turnover exceeds the VAT registration threshold or if the company wishes to reclaim VAT.
    • Corporate Income Tax: Register for corporate income tax purposes, although small businesses might benefit from simplified tax regimes.

6. Social Security Registration

State Social Insurance Fund Board (Sodra):

  • Register with Sodra: If the MB has employees, it must register with the State Social Insurance Fund Board for social security contributions, including pensions and health insurance.

7. Opening a Bank Account

Business Bank Account:

  • Open an Account: Open a business bank account in Lithuania to handle all financial transactions, including the deposit of any initial capital if required.

8. Compliance and Reporting

Accounting:

  • Set Up Accounting: Implement an accounting system in compliance with Lithuanian accounting standards. You can manage this internally or hire an external accountant.

Annual Reports:

  • Prepare and File: The MB is required to prepare and file annual financial reports with the State Enterprise Centre of Registers and tax returns with the State Tax Inspectorate.

Employment Regulations:

  • Adhere to Labor Laws: Ensure compliance with Lithuanian labor laws, including employee contracts, working conditions, and health and safety regulations.

9. Licenses and Permits

Industry-Specific Licenses:

  • Obtain Licenses: Depending on the nature of the business, specific licenses or permits may be required. Check with local authorities or industry-specific regulations.

10. Legal and Advisory Services

Consult Professionals:

  • Legal and Financial Advisors: Engage local legal and financial advisors to ensure compliance with all regulations and to assist with the establishment process.

11. Post-Establishment

Operational Setup:

  • Start Operations: Once registration and compliance are complete, begin business operations in Lithuania.

Ongoing Compliance:

  • Monitor Regulations: Regularly review and adhere to legal, accounting, and tax regulations to ensure smooth business operations.

The MB structure offers a flexible and simplified approach for small enterprises, making it an attractive option for entrepreneurs and small business owners in Lithuania.