Increasing the authorized capital of a Uždaroji Akcinė Bendrovė (UAB) in Lithuania involves several key steps. This process typically includes a decision by the company’s shareholders, an amendment to the company’s statutes, and updating registration details with the State Enterprise Centre of Registers. The increase in capital must be documented through a formal resolution, deposited into the company’s bank account, and officially registered to reflect the new capital amount
Increasing the authorized capital of a Uždaroji Akcinė Bendrovė (UAB), or private limited liability company, in Lithuania involves several detailed steps. This process ensures that the increase is properly documented and legally recognized. Here’s a comprehensive guide:
1. Understanding Authorized Capital
Authorized Capital:
- Definition: Authorized capital is the maximum amount of share capital that a company is allowed to raise as per its statutes. It represents the total nominal value of shares that the company can issue.
- Purpose: Increasing authorized capital allows the company to raise additional funds for expansion, investment, or other financial needs.
2. Reasons for Increasing Authorized Capital
Common Reasons:
- Business Expansion: To fund new projects, acquisitions, or growth strategies.
- Operational Needs: To improve liquidity and financial stability.
- Investment Opportunities: To attract new investors or increase financial capacity.
3. Steps to Increase Authorized Capital
1. Decision by Shareholders:
- General Meeting: Hold a general meeting of shareholders to approve the increase in authorized capital.
- Resolution: Pass a resolution specifying the amount of the increase, the new authorized capital amount, and the terms of the increase.
- Minutes: Document the resolution in the meeting minutes, which must be signed by the authorized persons.
2. Amend the Company’s Statutes:
- Update Statutes: Amend the company’s statutes to reflect the new authorized capital amount. This may involve updating provisions related to the share capital and share issuance.
- Notarization: The amended statutes must be notarized to be legally valid.
3. Deposit the Increased Capital:
- Bank Account: Deposit the increased capital into the company’s bank account. This reflects the additional funds 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 shareholders’ resolution approving the capital increase.
- Amended Statutes: Notarized amended statutes reflecting the new capital amount.
- Proof of Deposit: Bank confirmation of the increased capital.
5. Tax Considerations:
- Notify Tax Authorities: Inform the State Tax Inspectorate of the capital increase if required, to ensure proper tax treatment.
6. Update Financial Records:
- Accounting: Update the company’s accounting records to reflect the new authorized capital. Ensure that financial statements accurately represent the increased capital.
7. Inform Stakeholders:
- Communication: Notify shareholders, business partners, and financial institutions about the increase in authorized capital.
4. Timeline and Fees
Timeline:
- Processing Time: The process of increasing authorized capital and updating registration details typically takes a few days to several weeks, depending on the efficiency of the registration process and completeness of the submitted documents.
Fees:
- Application Fees: There may be fees 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 the increase complies 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 that 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 authorized capital is correctly updated in the company’s registration records and financial statements.
Monitor Financial Impact:
- Review: Assess the impact of the increased capital on the company’s financial position and operations.
Increasing the authorized capital of a UAB in Lithuania involves a structured process of shareholder approval, statutory amendments, bank deposit, and official registration. Following these steps ensures that the increase is legally recognized and accurately reflected in the company’s records