Law on Companies Lithuania: Parliament adopts new regulations

The Parliament of the Republic of Lithuania has adopted amendments to the Law on Companies which are expected to improve conditions for business growth and to attract more investment into the country. The Ecovis experts explain the details.

The aim of the amendments is to encourage the use of digital tools in decision-making, protect the interests of minority shareholders and allow companies to hold a wider range of share classes.

Shareholders can vote digitally

Companies will be obliged to provide for electronic voting if requested by shareholders whose shares represent at least 1/10 of the total number of votes. General meetings of shareholders may also be held entirely online.

Reduction of the mandatory share capital

From 1 May 2023, it will be even easier to set up a new company. To attract new investment, the mandatory authorised capital of a company being set up will be reduced to a minimum of EUR 1,000, compared to EUR 2,500 previously.

Sell-out and squeeze-out rights

Together with the amendments, new company sell-out and squeeze-out rights are introduced. This will give minority shareholders the right to withdraw from the company and large shareholders the right to buy out minority shareholders.

We can help implement the amendments to the Law on Companies in Lithuania in your company.

Loreta Andziulytė, Attorney at Law, Partner, ECOVIS ProventusLaw, Vilnius, Lithuania

Changes to preferential shares

One of the most important changes to the law is the liberalisation of share classes, allowing companies to issue different types of preferential shares which go beyond the preferential shares currently provided for. These changes take effect on 1 May 2023.

Changes to the procedure for payment of shares

Previously, the issue price of shares in a company had to be the same, with different issue prices causing a lot of debate in practice. The amendments also clarify this situation, allowing shares to be issued at different issue prices in the same share issue. This change will help companies to avoid a wasting a great amount of time and money when, for example, a capital increase had to be raised several times due to the impossibility of using different issue prices for different shares in the same issue.

For further information please contact:

Loreta Andziulytė, Attorney at Law, Partner, ECOVIS ProventusLaw, Vilnius, Lithuania
Email: loreta.andziulyte@ecovisproventuslaw.com