Increasing the contribution (share capital) of a MB (Uždaroji Akcinė Bendrovė) in Lithuania involves several steps. This process typically requires a decision by the company’s members, documentation of the new contribution amount, and an update to the company’s registration details with the State Enterprise Centre of Registers. The increased contribution must be documented through a formal resolution, updated in the company’s statutes, and reflected in the company’s financial records
Increasing the contribution (also known as share capital) of a Uždaroji Akcinė Bendrovė (MB), which is a type of private limited liability company in Lithuania, involves several detailed steps. Here’s a comprehensive guide to the process:
1. Understanding MB Contribution
Contribution:
- Definition: In an MB, the contribution is the total amount of capital invested by the members. It represents their financial commitment to the company and determines their liability.
- Minimum Requirement: The minimum required contribution for an MB is €2,500, but the members can decide to increase this amount.
2. Reasons for Increasing Contribution
Common Reasons:
- Business Expansion: To fund new projects or expand operations.
- Operational Needs: To improve liquidity or cover operational costs.
- Investment Opportunities: To take advantage of investment opportunities or acquire assets.
3. Steps to Increase MB Contribution
1. Decision by Members:
- Resolution: The increase in contribution must be agreed upon by the company’s members. This decision is typically made in a general meeting.
- Meeting Minutes: Document the resolution in the meeting minutes, specifying the new contribution amount and the terms of the increase.
2. Update the Company’s Statutes:
- Amend Statutes: If the increase in contribution affects the company’s statutes, amend the statutes to reflect the new contribution amount.
- Notarization: The updated statutes may need to be notarized if significant changes are made.
3. Deposit the Increased Contribution:
- Bank Account: Deposit the increased amount of contribution into the company’s bank account. This reflects the new capital in the company’s financial records.
4. Register the Increase:
- State Enterprise Centre of Registers: File an application with the State Enterprise Centre of Registers to update the company’s registration details. The application should include:
- Completed Form: The appropriate form for capital changes.
- Resolution: Copy of the resolution or meeting minutes approving the increase.
- Proof of Deposit: Bank confirmation of the increased contribution.
- Updated Statutes (if applicable): Amended statutes if they were changed.
5. Tax Considerations:
- Notify Tax Authorities: Depending on the nature of the contribution increase, notify the State Tax Inspectorate of the change to ensure proper tax treatment and compliance.
6. Update Financial Records:
- Accounting Records: Update the company’s accounting records to reflect the increased contribution. Ensure the new contribution amount is accurately recorded in financial statements.
7. Inform Stakeholders:
- Communication: Inform stakeholders, including creditors, business partners, and financial institutions, of the increase in contribution, as it may impact their dealings with the company.
4. Timeline and Fees
Timeline:
- Processing Time: The process of increasing the contribution and updating the registration can take a few days to several weeks, depending on the efficiency of the registration process and any required documentation.
Fees:
- Application Fees: There may be a fee associated with updating the company’s registration details. Check with the State Enterprise Centre of Registers for specific fee information.
5. Legal and Compliance Considerations
Compliance:
- Legal Requirements: Ensure that all steps are in compliance with Lithuanian company law and that all required documents are accurately prepared and submitted.
- Regulatory Compliance: Follow any additional regulations related to the increase of company capital.
Documentation:
- Accuracy: Ensure all documents, including resolutions and proofs of deposit, are accurate and complete to avoid delays or complications.
6. Post-Increase Considerations
Confirm Updates:
- Verification: Verify that the increased contribution has been correctly updated in the company’s registration records and financial statements.
Monitor Financial Impact:
- Review: Assess the impact of the increased contribution on the company’s financial position and operations.
Increasing the MB contribution in Lithuania involves a structured process of decision-making, documentation, and registration. Proper execution of these steps ensures that the increase is legally recognized and reflects accurately in the company’s financial and regulatory records