Akcine Bendrove (AB) leads Lithuania’s business structures when it comes to serious ventures. The structure needs a minimum share capital of €40,000. Unlike its counterpart, the Uždaroji Akcinė Bendrovė (UAB), an AB can be listed publicly and attract investment from the general public.
Let’s get into everything you need to know about the Akcine Bendrove structure. The Lithuanian Civil Code and Law on Companies govern these joint-stock companies that offer proportional ownership through shareholding. Corporate income faces a 15% tax rate. The structure has a distinctive governance model with a Board of Directors making strategic decisions while a CEO runs daily operations. This complete overview will help you decide if an AB suits your venture when you think about establishing a major business presence in Lithuania.
Types of Akcinė Bendrovė
Lithuania has two different forms of joint-stock companies that serve various business needs and investor profiles. Both types work under the same simple legal framework but have several important differences.
Public Akcinė Bendrovė (AB)
The Public Akcinė Bendrovė is Lithuania’s version of a publicly traded company. The company’s shares can be freely traded on the stock exchange, which makes them available to public investors. This business structure needs a minimum share capital of €40,000, though some sources show this might have dropped to €25,000 in 2023.
A single shareholder can set up a Public AB with no upper limit on shareholder numbers. The company must put in at least 25% of its capital during registration.
A Public AB’s governance structure needs a Board of Directors with at least 3 members and a Supervisory Board that has 3-15 members including an auditor. Each Public AB must register with the Lithuanian Securities Commission to ensure proper oversight of publicly traded entities.
Private Akcinė Bendrovė (UAB)
The Private Akcinė Bendrovė (UAB) is a more common and available option for foreign investors and entrepreneurs. A UAB needs only €2,500 as minimum capital, which makes it much easier to start for small to medium-sized businesses.
One person can start a UAB, and it can have up to 100-250 shareholders based on different sources. The main difference is in share transfers – UAB shares need other shareholders’ approval before being transferred to third parties.
A UAB’s management rules are more flexible. One director can run the company and can also be the only shareholder. An auditor becomes mandatory only in specific cases: when yearly turnover goes above €1,400,000, employee count exceeds 50, or total assets are more than €720,000.
Both company types protect personal assets from company debts through limited liability. The choice between AB and UAB depends on how much capital you have, who you want as investors, and what management structure you need.
Key Features and Legal Requirements
You need to know the legal framework of an akcine bendrove to understand its capital requirements, shareholder rights, and regulatory obligations under Lithuanian law.
The capital requirements create the biggest difference between company types. A public limited liability company (AB) needs €40,000 in minimum capital. A private limited liability company (UAB) needs just €2,500. The UAB minimum has dropped to €1,000 due to recent changes. Both types must pay at least 25% of their registered capital when they start.
These company structures give strong protection to their owners. An akcine bendrove’s shareholders can only lose what they’ve invested. The company takes full responsibility for its debts through its property, and shareholders don’t have to worry about personal liability.
Lithuanian law gives shareholders many rights. They can get dividends, receive company funds during capital cuts, get free shares when capital grows from company funds, and keep their first rights to buy new shares. They also get to attend meetings, ask questions beforehand, vote based on their shares, and look at company information.
Lithuanian companies can create different types of shares with varying voting rights. They can issue shares with or without voting power, but non-voting shares can’t be more than 50% of all shares. On top of that, recent changes let companies be more flexible with their share structure. Now they can create shares with different property or non-property rights.
Every akcine bendrove must create and submit yearly financial statements to the Register of Legal Entities. Public companies (AB) need audits every year. Private companies (UAB) only need audits if they grow beyond certain sizes in revenue, assets, or staff numbers.
The company must hold a general meeting of shareholders once a year within four months after the financial year ends.
How to Form an Akcinė Bendrovė
The process of forming an akcine bendrove in Lithuania takes about 2-3 weeks when you prepare all documents properly. Let me explain the steps you need to take.
You should first check and reserve your company name at the State Enterprise Center of Registers. Your chosen name must be unique and comply with Lithuanian naming conventions. The reservation remains valid for 6 months, which gives you enough time to complete the registration.
The next step requires preparation of these documents:
- Articles of Association (containing company name, legal form, business purpose, authorized capital amount, share information, and management structure)
- Constituent Agreement (if multiple founders) or Constituent Act (if single founder)
- Documents confirming the legal address
- Information about founders and directors (identification documents)
A bank account must be opened to deposit the share capital. Public ABs need €40,000 minimum capital, while private ABs (UABs) require €2,500 or €1,000 based on recent regulations. The registration process needs at least 25% of this capital deposited beforehand.
Document notarization plays a vital role in the process. A notary verifies that all paperwork meets Lithuanian law requirements before submission.
The Register of Legal Entities processes all submitted documents within 3 working days. Your company receives a registration certificate and becomes a legal entity.
The next steps involve getting an official company seal for business transactions. The State Tax Inspectorate registration must happen within 5 days to receive your tax identification number and VAT registration if applicable.
Foreign investors can handle the process through power of attorney if they cannot be present physically. However, opening a bank account might still require them to appear in person.
Conclusion
The Akcine Bendrove proves to be a resilient business structure that attracts entrepreneurs looking for substantial investment opportunities in Lithuania. We got into the main differences between public ABs and private UABs. These business types are separated by their capital requirements, share transferability, and how complex their governance needs to be. Your business scale and investment goals will shape which structure works best for you.
ABs’ legal framework protects shareholders’ interests and you retain control through financial reporting and governance requirements. The limited liability protection keeps personal assets safe from business obligations. This makes both structures attractive to investors who want to minimize their risks.
Setting up an AB follows a well-laid-out path that includes specific capital and documentation requirements. The process takes 2-3 weeks and moves from name reservation to final tax authority registration.
Your decision to establish an AB in Lithuania should align with your capital availability, target investor base, and management priorities. Public ABs need €40,000 in capital compared to UABs’ €2,500 requirement – that’s a key factor to think about. In spite of that, businesses with ambitious growth plans can tap into the potential of public investment through stock exchange listings. Both company types are the foundations of business success in Lithuania’s well-regulated corporate landscape.
FAQs
Q1. What is the main difference between a public and private Akcinė Bendrovė in Lithuania? The main difference lies in the minimum capital requirement and share transferability. Public ABs require a minimum capital of €40,000 and can be listed on the stock exchange, while private ABs (UABs) need only €2,500 and have restrictions on share transfers.
Q2. How many shareholders can an Akcinė Bendrovė have? A public AB can have an unlimited number of shareholders, while a private AB (UAB) is typically limited to 100-250 shareholders. Both types can be established by a single shareholder, either a natural person or a legal entity.
Q3. What are the liability protections for shareholders in an Akcinė Bendrovė? Shareholders in both public and private ABs enjoy limited liability protection. They are only liable to the extent of their invested capital, and their personal assets are protected from the company’s debts and obligations.
Q4. What are the key steps to form an Akcinė Bendrovė in Lithuania? The main steps include reserving a company name, preparing necessary documents (Articles of Association, Constituent Agreement), opening a bank account, depositing the required capital, notarizing documents, and registering with the Register of Legal Entities and tax authorities.
Q5. Are there different types of shares that can be issued by an Akcinė Bendrovė? Yes, Lithuanian law allows ABs to issue various share classes with different voting rights. Companies can have shares with or without voting rights, though non-voting shares cannot exceed 50% of total shares. Recent amendments also permit greater flexibility in share structures with different property or non-property rights.
