Establishment of public company

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Establishing a Public Limited Liability Company (AB) in Lithuania involves several key steps:

  1. Choose a Name: Ensure the name is unique and available.
  2. Prepare Documents: Draft and notarize the company’s statutes and secure a registered legal address in Lithuania.
  3. Register the Company: Submit the necessary documents to the State Enterprise Centre of Registers, including the statutes, proof of address, and proof of identity.
  4. Tax Registration: Register with the State Tax Inspectorate for VAT and corporate income tax purposes.
  5. Open a Bank Account: Set up a business bank account and deposit the minimum share capital of €40,000.
  6. Compliance: Adhere to accounting, reporting requirements, and corporate governance regulations.

An AB structure is ideal for larger businesses seeking public investment and can be listed on the stock exchange

Establishing a Public Limited Liability Company (AB) in Lithuania involves a series of detailed steps and compliance requirements. An AB is suited for larger businesses that may seek public investment and can be listed on the stock exchange. Here’s a comprehensive guide to the process:

1. Understanding Public Limited Liability Company (AB)

Description:

  • AB is a business structure designed for larger enterprises and can be publicly traded.
  • Share Capital Requirement: Minimum share capital of €40,000.
  • Liability: Shareholders’ liability is limited to their investment in the company.

2. Pre-Registration Requirements

Business Name:

  • Choose a Name: Ensure the company name is unique and available. Verify and reserve the name through the State Enterprise Centre of Registers.

Legal Address:

  • Address Requirement: The AB must have a registered legal address in Lithuania. This can be a physical office or a virtual office service.

3. Drafting and Notarizing Documents

Company Statutes:

  • Prepare Statutes: Draft the company’s statutes (articles of association) detailing the company’s governance, shareholder rights, and operational rules.
  • Notarization: The statutes must be notarized by a Lithuanian notary.

Shareholders and Directors:

  • Appoint Shareholders and Directors: An AB requires at least two shareholders and one director. Shareholders can be individuals or legal entities.

Supervisory Board:

  • Establish a Supervisory Board: An AB must have a supervisory board, which oversees the management board. The board must have at least three members.

4. Company Registration

State Enterprise Centre of Registers:

  • Submit Documents: Register the AB with the State Enterprise Centre of Registers. Required documents include:
    • Completed registration form
    • Statutes of the company (notarized)
    • Proof of address
    • Proof of identity of the founders
    • Bank confirmation of the deposited share capital (minimum €40,000)

Registration Process:

  • Application Submission: Submit the application either online via the Centre’s portal or in person. Online registration is generally quicker.

5. Tax Registration

State Tax Inspectorate:

  • Register for Taxes: After registration, the AB must register with the State Tax Inspectorate. This includes:
    • VAT Registration: Required if the company’s taxable turnover exceeds the VAT threshold or if the company wishes to reclaim VAT.
    • Corporate Income Tax: Register for corporate income tax purposes.

6. Opening a Bank Account

Business Bank Account:

  • Open an Account: Open a business bank account in Lithuania. This account will be used for financial transactions and for depositing the minimum share capital of €40,000.

7. Compliance and Reporting

Accounting:

  • Set Up Accounting: Implement an accounting system that complies with Lithuanian accounting standards. Consider hiring a local accountant or accounting firm.

Annual Reports:

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

Disclosure Requirements:

  • Public Disclosure: As a public company, an AB must comply with public disclosure requirements, including financial reporting and periodic updates to shareholders and regulatory authorities.

Corporate Governance:

  • Comply with Regulations: Follow regulations related to corporate governance, including the responsibilities of the management and supervisory boards.

8. Licenses and Permits

Industry-Specific Licenses:

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

9. 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.

10. Post-Establishment

Operational Setup:

  • Begin Operations: Once all registration and compliance requirements are completed, you can commence business operations.

Ongoing Compliance:

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

Public Listing (if applicable):

  • Stock Exchange Listing: If planning to list the AB on the stock exchange, follow additional regulations and requirements set by the stock exchange and securities regulators.

Establishing an AB in Lithuania involves a comprehensive process but provides significant benefits for larger businesses, including access to public capital markets and a robust legal framework for corporate governance