4.Liability of legal representatives for contractual obligations of minors, who are under fourteen years of age, shall be prescribed by law if they fail to prove that they are not at fault for the breach of the said obligations.
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5.Where a contract concluded by a minor under fourteen years of age is not recognised to be null and void and where the said person becomes legally capable, the other party to the contract may apply in writing to the party to the contract, who has become legally capable, and request the approval of the contract within the time limits, which may not be shorter than one month, determined in the application. Where the person fails to notify about his refusal to approve the contract within the proposed time limits, he shall be deemed to have approved the contract.
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Article 2.8Active civil capacity of minors over fourteen and under eighteen years of age
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1.Minors over fourteen and under eighteen years of age shall enter into contracts with the consent of parents or guardians. The form of consent shall have to correspond to the form of the contract concluded. Contracts concluded without the consent of legal representatives shall be deemed valid if the consent of the legal representative is given after the contract has been concluded.
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2.Minors over fourteen but under eighteen years of age, apart from the rights laid down in paragraph 3 of Article 2.7, shall have the right to dispose of their income and property acquired for that income, implement copyright to their works, inventions, industrial design as well as the right to enter into contracts alone to meet their ordinary and usual needs.
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3.Where there are sufficient grounds, the court may be called upon to rule on an application filed by child care institutions or other interested persons to impose restrictions on or divest minors, who are over fourteen but under eighteen years of age, of the right to dispose independently of their income and property.
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4.The right of minors over fourteen but under eighteen years of age to make deposits in credit institutions and dispose of them shall be prescribed by law.
\n
5.Minors over fourteen but under eighteen years of age shall alone be liable for their contractual obligations.
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Article 2.9Emancipation of minors
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1.Where a minor is sixteen years of age the court may emancipate him after he or his guardian , parents, institutions of guardianship or he himself has filed a declaration to that effect with the court if there are sufficient grounds to believe that he may exercise all civil rights and discharge his obligations alone. In all cases a minor has to give his consent to be emancipated.
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2.The court may annul minor’s emancipation on the request of parents or child care institutions in the event that exercising his rights and discharging his obligations a minor causes damage to his own or other persons’ rights or lawful interests.
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SECTION THREE DECLARATION OF INCAPACITY OR LIMITATION OF CAPACITY OF A NATURAL PERSON
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Article 2.10Declaration of incapacity of a natural person
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1.Natural person who as a result of mental illness or imbecility is not able to understand the meaning of his actions or control them may be declared incapable. The incapable person shall be placed under guardianship.
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2.Contracts on behalf and in the name of the person, who was declared incapable, shall be concluded by his guardian. Rights and obligations of a guardian are laid down in the provisions of Book Three of the given Code.
\n
3.Where a person who was declared incapable gets over his illness or the state of his health improves considerably the court shall recognise his capacity. After the court judgement becomes res judicta, guardianship to the said person shall be revoked.
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4.The spouse of the person, parents, adult children, care institution or a public prosecutor shall have the right to request the declaration of person’s incapacity by filing a declaration to the given effect. They shall also have the right to apply to the court requesting the declaration of person’s capacity.
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Article 2.11Limitation of active civil capacity of natural persons
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1.Where natural persons abuse alcoholic beverages, drugs, narcotic or toxic substances the court may impose restrictions on their civil capacity. After person’s capacity has been imposed limitations , he shall be placed under guardianship. Rights and obligations of a guardian are laid down in the provisions of Book three of the given Code.
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2.Upon imposition of a limitation on a person’s capacity he may enter into contracts related to the disposition of his property, receive his salary, pension or any other income and dispose of it only with the consent of his guardian , with the exception of contracts, which he concludes to meet his ordinary and usual needs. Person whose capacity has been imposed limitations may not without the consent of his guardian curator:
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1)borrow and lend money, when the sum exceeds two average monthly wages (without deductions);
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2)extend a guarantee or offer a surety to other person;
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3)conclude contracts of alienation or encumbrance of rights to his property ;
\n
4)conclude an arbitration agreement;
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5)file a statement of claim related to that part of his active civil capacity where his active capacity is limited;
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6)come into inheritance or disclaim an inheritance;
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7)conclude a contract for the construction of a building (apartment) or major repairs;
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8)conclude a contract of tenancy or a loan-for-use contract;
\n
3.The court may request the consent of the guardian curator to conclude other contracts, which are not laid down in paragraph 2 of the given Article.
\n
4.Where the reasons for which person’s capacity was imposed limitations are no more valid the court shall lift the limitations on person’s capacity. After the court judgement has come into force, guardianship to a person under which he has been placed shall be annulled.
\n
5.A person of full age who has limited capacity shall be alone liable for his contractual and non-contractual obligations.
\n
6.A request to impose limitations on person’s civil capacity may be filed by the spouse of the said person, his parents, adult children, institution of guardianship or the public prosecutor. The person whose capacity was imposed limitations shall also have the right to apply to the court requesting to lift the limitations on his capacity.
\n
7.Provisions of the articles of Part VII of Book Three of the given Code are applied mutatis mutandis to relations, arising in the exercise and protection of the property and non-property rights of an incapable natural person or a natural person of limited capacity.
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SECTION FOUR DOMICILE AND RESIDENCE OF A NATURAL PERSON
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Article 2.12Domicile of a Natural Person
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Being an expression of person’s relationship with the state or part of its territory, domicile of a natural person shall be that state or its part, in which he permanently or ordinarily resides, regarding that state or its part to be the seat of his personal, social and economic interests.
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1.A natural person is deemed to be domiciled in the Republic of Lithuania when of his own will he establishes and maintains the only or principal residence with the intention to make it a seat of his personal, social and economic interests. This intention, inter alia, may manifest itself by person’s actual presence on the territory of the Republic of Lithuania as well as the establishment of personal or business relations between him and the persons of the Republic of Lithuania or by some other criteria.
\n
2.A natural person may have only one domicile. A person called to a temporary or revocable public office shall retain his domicile.
\n
3.Domicile of a natural person shall be deemed unchanged until he changes it to another domicile.
\n
4.Domicile of a married person shall not depend on the domicile of his spouse, although the domicile of one of the spouses is the fact, which has to be taken into consideration in establishing the domicile of the other spouse.
\n
Article 2.13Domicile of Legally Incapable Natural Persons
\n
1.Domicile of legally incapable natural person shall be deemed to be the domicile of his guardian if the guardian and his ward reside in the same state.
\n
2.Where a legally incapable person resides in a different from his guardian state and the said state is the seat of personal, social and economic interests of the legally incapable person he shall be deemed to be domiciled in that state.
\n
Article 2.14Domicile of Juvenile Natural Persons
\n
1.Domicile of minor natural persons shall be deemed to be the domicile of their parents or guardians (foster parents).
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2.Where parents of a minor natural person fail to have a common domicile, the domicile of a minor shall be deemed to be the domicile of one of his parents with whom the minor resides most of the time, unless the court has established the domicile of a minor with one of his parents.
\n
Article 2.15Right of the Parties to the Contract to Choose Domicile
\n
The parties to a contract shall enjoy the right to choose, in writing, domicile with the view to the performance of the contract and the exercise of the rights arising from the said contract.
\n
Article 2.16Place of Residence of a Natural Person
\n
1.The residence of a person shall be the place where he ordinarily resides.
\n
2.Where a person has more than one residence, the seat of his principal establishment (where the person has property or a major part of property, where he has his job or where he lives the longest) shall be deemed to be his principal residence. In such case person’s principal residence shall be taken into consideration in establishing his domicile.
\n
3.A person, whose domicile cannot be determined with certainty in accordance with the criteria laid down in Article 2.12 of the given Code, shall be deemed to be domiciled at the place of his residence. This rule shall, too, be applied to refugees from the state, which was their domicile unless they were domiciled in the Republic of Lithuania in accordance with the provisions of Article 2.12 of the given Code.
\n
Article 2.17Criteria for the Establishment of Residence
\n
1.Length and continuity of actual residence at the place, data on person’s residence in public registers as well as his own public statements about his residence shall be taken into account in determining residence of a natural person.
\n
2.A person whose residence is unknown or cannot be determined with certainty shall be deemed to live at the place of his last known residence.
\n
3.A natural person must notify, in writing, the other party to the contract as well as his creditors or debtors about the change of residence. Where a person fails to perform this obligation the other party to the contract and creditors shall have the right to send notifications and perform other acts at the place of his last known residence.
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SECTION FIVE ACTS OF CIVIL STATUS
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Article 2.18State Registration of Acts of Civil Status
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The state conducts mandatory registration of the following acts of civil status:
\n
1)birth of a person;
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2)death of a person;
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3)entering into marriage;
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4)dissolution of marriage
\n
5)adoption;
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6)recognition and establishment of parenthood;
\n
7)change of the first name and surname;
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8)change of designation of sex of a person;
\n
9)partnership.
\n
Article 2.19The Order of Registration of Acts of Civil Status
\n
1.Acts of civil status, except partnership, shall be registered in the registry offices by making respective entries into the register of civil status and issuing to the person the certificate of a respective entry of the act.
\n
2.The procedure of registration of acts of civil status, alterations of the acts of civil status, rectification and reconstitution of acts is established in Book Three of the given Code.
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PART TWO ENJOYMENT AND EXERCISE OF SPECIFIC CIVIL RIGHTS OF NATURAL PERSONS
\n
Article 2.20Right to a Name
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1.Every natural person shall enjoy the right to a name. Right to a name includes a right to a surname, name (names) and pseudonym. It shall be prohibited to gain rights and assume obligations under the cover of other person’s name.
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2.A natural person shall have the right to use his full or abbreviated name (names) and request other persons not to use and not to act in his name without his authorisation.
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3.The basis and the procedure for the change of name and surname shall be provided by law.
\n
4.Having changed his surname or name a natural person must inform his debtors and creditors thereof. Where the person fails to perform this obligation he shall run the risk of negative consequences ensuing after his failure to notify about the change of his name or surname.
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Article 2.21Protection of the Right to a Name
\n
1.A natural person whose right to a name has been infringed as a result of other person’s unlawful acts in his name or some other mode of unlawful appropriation of his name or he is prevented from using it, shall have the right to apply to court and request to oblige the guilty person to discontinue the said acts and redress the property and non-pecuniary damage incurred on him by such unlawful acts.
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2.After the death of a natural person such claim may be presented by his spouse, parents or children.
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Article 2.22Right to an Image
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1.Photograph (or its part) or some other image of a natural person may be reproduced, sold, demonstrated, published and the person may be photographed only with his consent. Such consent after natural person’s death may be given by his spouse, parents or children.
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2.Where such acts are related to person’s public activities, his official post, request of law enforcement agencies or where a person is photographed in public places, consent of a person shall not be required. Person’s photograph (or its part) produced under the said circumstances, however, may not be demonstrated, reproduced or sold if those acts were to abase person’s honour, dignity or damage his professional reputation.
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3.Natural person whose right to image has been infringed enjoys the right to request the court to oblige the discontinuance of the said acts and redressing of the property and non-pecuniary damage. After person’s death, such claim may be presented by his spouse, children and parents.
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Article 2.23Right to Privacy and Secrecy
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1.Privacy of natural person shall be inviolable. Information on person’s private life may be made public only with his consent. After person’s death the said consent may be given by person’s spouse, children and parents.
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2.Unlawful invasion of person’s dwelling or other private premises as well as fenced private territory, keeping his private life under observation, unlawful search of the person or his property, intentional interception of person’s telephone, post or other private communications as well as violation of the confidentiality of his personal notes and information, publication of the data on the state of his health in violation of the procedure prescribed by laws and other unlawful acts shall be deemed to violate person’s private life.
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3.Establishment of a file on another person’s private life in violation of law shall be prohibited. A person may not be denied access to the information contained in the file except as otherwise provided by the law. Dissemination of the collected information on the person’s private life shall be prohibited unless, taking into consideration person’s official post and his status in the society, dissemination of the said information is in line with the lawful and well-grounded public interest to be aware of the said information.
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4.Public announcement of facts of private life, however truthful they may be, as well as making private correspondence public in violation of the procedure prescribed in paragraphs 1 and 3 of the given Article as well as invasion of person’s dwelling without his consent except as otherwise provided by the law, keeping his private life under observation or gathering of information about him in violation of law as well as other unlawful acts, infringing the right to privacy shall form the basis for bringing an action for repairing the property and non-pecuniary damage incurred by the said acts.
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5.Where the said acts are committed on the basis of reasoned judgement of the court, restrictions imposed on the publication and collecting of information about the person which are laid down in the provisions of paragraphs 1 and 3 of the given Article shall not be applied.
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Article 2.24Protection of Honour and Dignity
\n
1.A person shall have the right to demand refutation in judicial proceedings of the publicised data, which abase his honour and dignity and which are erroneous as well as redress of the property and non-pecuniary damage incurred by the public announcement of the said data. After person’s death this right shall pass on to his spouse, parents and children if the public announcement of erroneous data about the deceased person abases their honour and dignity as well. The data, which was made public, shall be presumed to be erroneous as long as the person who publicised them proves the opposite.
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2.Where erroneous data were publicised by a mass medium (press, television, radio etc.) the person about whom the data was publicised shall have the right to file a refutation and demand the given mass medium to publish the said refutation free of charge or make it public in some other way. The mass medium shall have to publish the refutation or make it public in some other way in the course of two weeks from its receipt. Mass medium shall have the right to refuse to publish the refutation or make it public only in such cases where the content of the refutation contradicts good morals.
\n
3.The request to redress the property or non-property non-pecuniary damage shall be investigated by the court irrespective of the fact whether the person who has disseminated such data refuted them or not.
\n
4.Where a mass medium refuses to publish the refutation or make it public in some other way or fails to do it in the term provided in paragraph 2 of the given Article, the person gains the right to apply to court in accordance with the procedure established in paragraph 1 of the given Article. The court shall establish the procedure and the term for the refutation of the data, which were erroneous or abased other person’s reputation.
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5.The mass medium, which publicised erroneous data abasing person’s reputation shall have to redress property and non-pecuniary damage incurred on the person only in those cases, when it knew or had to know that the data were erroneous as well as in those cases when the data were made public by its employees or the data was made public anonymously and the mass medium refuses to name the person who supplied the said data.
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6.The person who made a public announcement of erroneous data shall be exempted from civil liability in cases when the publicised data is related to a public person and his state or public activities and the person who made them public proves that his actions were in good faith and meant to introduce the person and his activities to the public.
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7.Where the court judgement, which obliges the refutation of erroneous data abasing person’s honour and dignity, is not executed , the court may issue an order to recover a fine from the defendant for each day of default. The amount of the fine shall be established by the court. It shall be recovered for the benefit of the defendant irrespective of the redress for the inflicted damage.
\n
8.Provisions of the given article shall, too, be applied to protect the tarnished professional reputation of a legal person.
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9.Provisions of the given article shall not be applied to those participants of judicial proceedings who are not held responsible for the speeches delivered at court hearings or data made public in judicial documents.
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Article 2.25Right to the Inviolability and Integrity of the Person
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1.A natural person shall be inviolable. No natural person may be made to undergo scientific or medical test or examination against his will and without his free consent (in cases of person’s incapability – without consent of his legal representative). Such consent shall be given in writing.
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2.Intervention into a human body, removal of parts of his body or organs shall be possible only with his consent. Consent to a surgical operation shall be given in writing. Where a person is incapable his guardian shall give his consent, in the event of castration, sterilisation, abortion, operation, removal of organs of an incapable person, however, authorisation of the court shall be necessary. Such consent shall not be necessary in emergency cases when person’s life is endangered and has to be saved while the person himself is unable to express his will.
\n
3.A natural person may determine, in writing, the nature of his funeral and the disposal of his body after his death.
\n
4.The procedure for the donation and transplantation of human tissues and organs is established in a separate law.
\n
5.Human body, its parts or organs and tissues may not become subjects of commercial contracts. Such contracts shall be deemed null and void.
\n
6.The person whose right to the inviolability of and integrity of his person has been infringed shall enjoy the right to request the guilty persons to redress property and non-pecuniary damage incurred on him.
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Article 2.26Prohibition to Restrict the Freedom of a Natural Person
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1.Freedom of a natural person shall be inviolable. A capable person may be placed under any supervision or imposed any restrictions only after his consent has been given as well as in other cases prescribed by law.
\n
2.Where a person’s life is endangered or he has to be hospitalised to protect the public interests person’s consent to the medical care shall not be required.
\n
3.Psychiatric examination of a person may be conducted only with his consent or after the authorisation of the court has been granted. Consent to conduct psychiatric examination of an incapable person may be given by his guardian or by the court. Where a person’s life is seriously endangered urgent psychiatric care may be taken without person’s consent.
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4.A person may be confined in a psychiatric institution only with his consent and after the authorisation of the court has been granted. Where a person is seriously ill with a mental disease and where there is a real danger that his actions may cause considerable damage to his or other people’s health or life and property, the person may be hospitalised in a compulsory manner for the period not exceeding two days. Compulsory hospitalisation may be extended only after the authorisation of the court in accordance with the procedure prescribed by law has been granted. Where a person is incapable, his guardian may give his consent to the said person’s compulsory hospitalisation for the period not exceeding two days. Compulsory hospitalisation of an incapable person may be extended only after the authorisation of the court following the procedure prescribed by law has been granted.
\n
5.Persons who unlawfully imposed restrictions on the freedom of a natural person shall have to redress property and non-pecuniary damage incurred on the said person.
\n
Article 2.27Right to the Change of the Designation of Sex
\n
1.An unmarried natural person of full age enjoys the right to the change of designation of sex in cases when it is feasible from the medical point of view. The application to the given effect shall have to be made in writing.
\n
2.The conditions and the procedure for the change of designation of sex shall be prescribed by law.
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CHAPTER THREE RECOGNITION OF PERSON’S ABSENCE OR DECLARATORY JUDGEMENT OF DEATH
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Article 2.28Recognition of person’s absence
\n
1.Where for the period of one year in person’s domicile there is no information about his whereabouts the court may recognise the person to be an absentee.
\n
2.Where there is no possibility to establish the day when the last data about an absentee have been received, the first of January of the following year shall be deemed to be the beginning of person’s absence.
\n
Article 2.29Protection of the Property of an Absentee
\n
1.After application of the interested persons or the public prosecutor has been filed, the court shall appoint a temporary administrator of absentee’s property. Absentee’s spouse, close relatives or person’s who are motivated to preserve his property may be appointed temporary administrators. The temporary administrator must take the inventory of the property and take measures to safeguard it. The court shall establish the amount of remuneration for the administrator’s services with the exception of cases where the temporary administrator is person’s spouse or a close relative. They shall fulfil the said functions free of charge.
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2.Temporary administrator shall administer the property, shall maintain the persons whom the absentee is obliged to maintain and shall pay the absentee’s debts. Temporary administrator shall have to obtain the authorisation of the court to dispose of the property, mortgage it or restrict the right to property in some other manner.
\n
3.Where the absentee’s property is an enterprise the court shall appoint its administrator. The administrator shall act in his owner’s name.
\n
4.Where the court gives a judgement that the person is recognised an absentee, a permanent administrator to his property shall be appointed by the court judgement.
\n
5.A person may be appointed an administrator to the property only with his consent.
\n
Article 2.30Revocation of the Judgement to Recognise the Person an Absentee
\n
1.In the event that an absentee returns or his whereabouts become known the court shall revoke its judgement to recognise the person an absentee and the administration to his property.
\n
2.Revenues received by the administrator from the property of the absentee shall be recovered by the owner of the property who has returned and who has to reimburse the property administrator for all expenses related to the administration thereof.
\n
Article 2.31Declaratory Judgement of Death
\n
1.In the event that no information on person’s whereabouts is obtained in his domicile for a period of three years and where he disappeared under such circumstances, which posed a mortal threat or give the grounds to suspect that he was killed in an accident, and no information about the person has been obtained for a period of six months, a declaratory judgement of natural person’s death may be pronounced. The beginning of the said term is established in accordance with the rules laid down in paragraph 2 of Article 2.28 of the given Code.
\n
2.A soldier or other person who disappeared as a result of military actions may in judicial proceedings be declared dead but not earlier than two years as of the day of the end of military actions.
\n
3.A declaratory judgement of death may be pronounced for a person irrespective of the fact whether he was or was not recognised an absentee.
\n
4.The date of death for a person for whom a declaratory judgement of death was pronounced shall be deemed the day when the court judgement becomes res judicata . Where a declaratory judgement of death is pronounced for a person who disappeared under such circumstances, which posed mortal threat or give grounds to suspect that he was killed in an accident the court may consider the alleged day of the accident to be the date of his death.
\n
5.Specific location pointed out in the court judgement shall be considered to be the location of such person’s death. Where it is impossible to establish a specific location of person’s death the last known location of his whereabouts is deemed to be the location of his death.
\n
6.From the point of view of person’s civil rights and obligations, pronouncement of a declaratory judgement of his death shall equal the act of person’s death.
\n
Article 2.32Consequences of the Return of a Person who was Declared Dead
\n
1.Where a person who was declared dead returns or his whereabouts become known the court revokes its judgement to declare the person dead.
\n
2.The person who has returned shall not have the right to request the recovery of his property, which has been inherited after a declaratory judgement of death was pronounced. However, in cases where a person was absent for serious reasons he shall enjoy the right, irrespective of the time of his return, to request the recovery of his property which is in possession of his heirs.
\n
3.A person who has returned shall also enjoy the right to request either the recovery of his property, which was gratuitously received by the third persons, or its value. He shall have, however, to compensate the person, who, in good faith, was in possession of his property, for all losses related to the recovery of the said property or its value.
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PART II
\n
LEGAL PERSONS
\n
CHAPTER IV
\n
GENERAL PROVISIONS
\n
Article 2.33Concept of a Legal Person
\n
1.A legal person shall be an enterprise or an organisation which has its business name, which may in its name gain and enjoy rights and assume obligations as well as act as a defendant and as a plaintiff in courts.
\n
2.Provisions of the PART II of the given book shall be applied to individual juridical forms of legal persons except as otherwise provided by the provisions of the given Code.
\n
Article 2.34Public and Private Persons
\n
1.Legal persons shall be divided into public and private persons.
\n
2.Public legal persons shall be legal persons established by the state or municipalities, their institutions or other non-profit-seeking persons whose goal is to meet public interests (state and municipality enterprises, state or municipality institutions, public institutions, religious communities, etc.).
\n
3.Private legal persons shall be legal persons, which aim at meeting private interests.
\n
4.Chapter VII of the given book shall be applied to the public legal persons in a subsidiary manner.
\n
5.Chapter IX of the given book shall not be applied to the public legal persons.
\n
Article 2.35State and Municipalities
\n
1.The state and municipalities shall be legal persons.
\n
2.State and municipality institutions the existence whereof is prescribed by the Constitution of the Republic of Lithuania shall be legal persons in the cases prescribed by law.
\n
3.With the exception of Articles 2.36, 2.74, 2.76, 2.80, 2.84, 2.85 Provisions of the Part II of the given book shall not be applied to the state and municipalities.
\n
4.State and municipality institutions specified in paragraph 2 of the given Article shall file with the register of legal persons documents and data, laid down in Articles 2.46 and 2.66 of the given Code.
\n
Article 2.36Participation of the State and Municipalities in Civil Relations
\n
1.State, municipalities and their institutions shall be subjects of civil relations subject to the same grounds as other participants thereof.
\n
2.The state and municipalities shall gain civil rights, assume civil duties and implement them through respective public and municipality administration institutions.
\n
Article 2.37Religious Communities and Associations
\n
1.Traditional religious communities and associations shall be legal persons. Other religious communities and associations gain the rights of a legal person in accordance with the procedure established in Chapter V of the given book as well as in other laws.
\n
2.Structural units of religious communities and associations, which pursuant to the regulations of communities and associations, statutes or other norms fulfil the requirements provided in Article 2.33 of the given Code, shall be legal persons. These structural units shall file documents, testifying to their compliance with the requirements specified in the given paragraph, with the register of legal persons.
\n
3.Religious communities and associations and their structural units, which enjoy the rights of a legal person, shall act pursuant to their regulations, statutes and other norms inasmuch as they do not infringe the laws, and only Chapters IV and VI , Articles 2.84, 2.85 shall be applied to the said legal persons as well as Chapter V but only inasmuch as it fails to contradict the provisions of paragraph I of the given Article.
\n
Article 2.38Trade Unions
\n
1.Where the requirements of paragraph 2 of the given Article are fulfilled trade unions shall be considered to be legal persons.
\n
2.A trade union shall be formed when it has no less than 30 founders or when an enterprise, an institution or an organisation has no less than 30 founders and they account for no less than one fifth of all employees (while one fifth would account for no less than three employees) and if the general meeting of the trade union approves its statute and elects its managing bodies.
\n
3.Citizens of the Republic of Lithuania or natural persons domiciled in the Republic of Lithuania who are not younger than fourteen years of age and are employed on the basis of labour contracts or some other basis may be founders of a trade union.
\n
4.Provisions of Chapter V of the given book shall be applied to trade unions inasmuch as they fail to contradict the provisions of paragraph 1 of the given Article. Trade unions shall file documents testifying to their compliance with the requirements laid down in paragraph 2 of the given Article with the register of legal persons.
\n
Article 2.39Business Name of a Legal Person
\n
1.A legal person shall possess its business name enabling to distinguish it from other legal persons.
\n
2.Business name of a legal person shall be its property, which, however, may not be sold or conveyed in any other manner to become the property of the other person separately from the legal person.
\n
3.Business name of a legal person may not contradict the public order or good morals or mislead the society as to its incorporator, co-owner, registered office, purpose of activities, juridical form, identity of the legal person or similarity to business names of other legal persons, business names of foreign enterprises, institutions and organisations, as well as trademarks and service marks which are familiar to the Lithuanian society. Business name of a legal person may not mislead by its identity or similarity to the recognised well-known trademarks and service marks which were submitted for registration, and were registered prior to the said legal person.
\n
4.Where provisions of paragraph 3 of Article 2.46 of the given Code must be applied, business name of a legal person shall not be registered separately and shall be protected as of the day on which an application for the registration of a legal person is filed with the register of legal persons or a legal act has been adopted.
\n
5.Regulations of the register of legal persons may establish additional requirements for the business name of legal persons.
\n
Article 2.40Composition of the Business Name of Legal Person
\n
1.Business name of a legal person is composed of words or word-combinations used in their figurative or direct meaning.
\n
2.Business name of a legal person shall be composed by taking into consideration the norms of standard Lithuanian and shall not be composed of a generic word (or words) denoting directly the sort of objects or services of activity or a single toponym or of some other word which fails to possess a distinctive feature.
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3.Business name of a legal person may be composed only of letters, which may not be understood as words and numerals or their combinations only in cases when such business name is customary in the society. Where the consent has been given, business name of a legal person which is related to a foreign legal person or other organisation may be composed in such manner which would make the said name identical or similar to the business name of a foreign legal person or other organisation.
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Article 2.41Business Name of a Legal Person which is in the Process of Incorporation
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1.Incorporators of a legal person may apply to the register of natural persons and request to make a temporary entry of the business name of a legal person, which is in the process of incorporation, in the register of legal persons.
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2.Business name of a legal person, which is in the process of incorporation, shall be subject to the same rules as the business name of a legal person with the exception of paragraph 4 of Article 2.39 and Article 2.42 of the given Code.
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3.Entry of a business name of a legal person, which is in the process of incorporation shall be made in the register of legal persons for the period of six months and upon its expiry shall be deleted without prior notification thereof to the founders of the legal person.
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Article 2.42Right to the Business Name of a Legal Person
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1.It shall be prohibited to gain rights and assume obligations by using other legal person’s business name as a cover or to use other legal person’s business name without the latter’s consent.
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2.Where legal person’s right to a business name has been infringed by other person’s unlawful use of the said person’s business name or where the other person has or uses a business name, which fails to meet the requirements laid down in Article 2.39 of the given Code, the legal person shall have the right to apply to the court and request the court to oblige the legal person to discontinue the said unlawful acts or alter the business name and to redress the property and non-pecuniary damage incurred by the said acts, while in the event that provisions of paragraph 1 of the given Article have been infringed – to request the person to return everything he has acquired by using other person’s name as a cover or using the said name without the latter’s consent.
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Article 2.43Alteration of the Business Name of a Legal Person
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1.Prior to the alteration of the business name a legal person shall have, one time, to make a public announcement thereof or notify, in writing, all creditors of the legal person.
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2.Where a legal person fails to discharge its obligation stipulated in paragraph 1 of the given Article he shall have to suffer the ensuing negative consequences related to its failure to notify about the alteration of its business name.
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3.The business name of a legal person shall be altered alongside with the alteration of incorporation documents, which are filed with the Register of legal persons only after the requirements of paragraph 1 of the given Article have been fulfilled.
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4.A legal person shall have the right to apply to the Register of legal persons and request to make a temporary entry in the Register of legal persons of the planned new business name. In such cases the provisions of Article 2.41 of the given Code shall be applied mutatis mutandis
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Article 2.44Information Supplied in the Documents of a Legal Person
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1.Documents of a legal person used in his business relations with other subjects (business letters, invoices, trade documents etc.) shall have to supply the following information:
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1)business name of a legal person;
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2)juridical form of a legal person;
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3)head office of a legal person;
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4)code of a legal person;
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5)Register which stores and safeguards the data on the given legal person.
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2.Where a legal person has declared bankruptcy or is liquidated the information thereof must be indicated in the documents specified in paragraph 1 of the given Article.
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3.Where a legal person has to pay value-added tax, the payer’s code shall have to be indicated in the documents specified in paragraph 1 of the given Article.
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4.Where the assets of a legal person are mentioned in the documents specified in paragraph 1 of the given Article, authorised capital and the amount of paid-in authorised capital shall have to be indicated as well.
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Article 2.45Member of the Legal Person
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1.A member of a legal person (shareholder, member, part-owner etc.) shall be the person, which enjoys the right of ownership to the property of a legal person, or the person, who, irrespective of his failure to maintain the right of ownership to the property of a legal person, acquires the obligatory rights and duties related to the legal person.
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Article 2.46Documents of Incorporation of a Legal Person
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1.Legal persons shall act in accordance with the documents of their incorporation: articles of incorporation, incorporation contract or in cases provided by law – general regulations. According to the provisions of the given Code articles of incorporation shall have equal status with the regulations, statutes and other incorporation documents of legal persons.
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2.Provisions of incorporation documents shall be valid inasmuch as they do not contravene the mandatory provisions of laws.
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3.Public legal persons may act in accordance with the law or, where the law provides for it, in accordance with the legal act on the incorporation of a public legal person adopted by the state or municipalities if the said act does not provide for the obligation of a public legal person to act in accordance with the statutes approved by the state or municipality institutions.
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4.Where incorporation documents of a legal person are not filed with the Register of legal persons within six months after they have been drafted and where other laws fail to provide for a different time limit, they shall be deemed void.
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5.Identity of signatures of natural persons who have signed the incorporation documents of a legal person shall have to be approved by a notary with the exception of derogations provided by the law.
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Article 2.47Articles of Incorporation of a Legal Person
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1.Articles of incorporation and in the event that a legal person fails to have articles of incorporation – incorporation contract or general regulations, where a legal person acts in accordance with the general regulations, or a legal act, where a legal person acts in accordance with the legal act, shall have to supply the following information:
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1)business name of a legal person;
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2)juridical form of a legal person;
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3)registered office of a legal person;
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4)goals of activities of a legal person;
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5)competence of the general meeting of members of a legal person and the procedure for its convening;
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6)bodies of a legal person and the procedure for their formation and dissolution or, where the bodies are not formed and the legal person exercises its rights through a member of a legal person – member of a legal person;
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7)the procedure for the alteration of the incorporation documents of a legal person;
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8)where the term of activities of a legal person is restricted, the term of its activities;
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9)other provisions laid down in the laws, the incorporator or a member of a legal person.
\n
2.Goals of the activities of public legal persons shall have to be defined in a clear and comprehensive manner including the field and form thereof.
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3.In the event that the procedure for the convening of the general meeting of a legal person’s members and its competence as well as the procedure for the formation and dissolution of other bodies of a legal person and their competence is identical to the procedure provided for by the law and where the given fact is indicated in the articles of incorporation, it shall not be indicated.
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Article 2.48Property of legal persons
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1.Property of legal persons shall be administered, used and disposed of on the basis of the ownership right or the right of trust.
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2.Property, which is administered, used and disposed of on the basis of the right of trust shall be owned by the incorporator of a legal person or its member on the basis of the ownership right.
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Article 2.49Registered Office of a Legal Person
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1.Registered office of a legal person shall be the seat of its principal managing body. Registered office of a legal person shall be defined by indicating the address of the premises in which the head office is located.
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2.Where the registered office of a legal person indicated in the register of legal persons, incorporation documents or the contract and the seat of its principal managing body fail to coincide, the third parties shall enjoy the right to consider the seat of its principal managing body to be the registered office of a legal person.
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3.All correspondence with a legal person shall be deemed appropriate where the address of the registered office is used as well as where due regard of paragraph 2 of the given article is taken except as otherwise provided by a legal person.
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4.Upon changing his registered office a legal person shall have to change its incorporation documents accordingly and register them.
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Article 2.50Contractual Liability of Legal Persons
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1.A legal person shall be liable for his obligations by his property, which it owns on the basis of the ownership right or right of trust 2. A legal person shall not be liable for the obligations of its member and the latter shall not be liable for the obligations of the legal person with the exception of cases provided by the law and incorporation documents of a legal person.
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3.Where a legal person fails to perform his obligations due to acts in bad faith of a member of the legal person, the member of a legal person shall, in a subsidiary manner, be liable for the obligations of a legal person by his property.
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4.Legal persons shall be divided into persons of limited and unlimited civil liability. Where the property of a legal person of unlimited civil liability is not sufficient to discharge its obligations, a member of a legal person shall be liable for the said obligations. Personal (individual) enterprise and commercial partnership shall be legal persons of unlimited civil liability.
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Article 2.51Term of the Activities of a Legal Person
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1.A legal person may be incorporated for a fixed or open-ended term. Date as well as presence or absence of certain conditions may be considered to be the term.
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2.Where documents of incorporation of a legal person fail to indicate that the legal person has been incorporated for a fixed period of time such legal person shall be considered incorporated for an open-ended term.
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Article 2.52Financial Year of a Legal Person
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1.Financial year of a legal person shall be the calendar year.
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2.Any other period of twelve months may be considered to be the financial year of a legal person.
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3.Where the financial year is changed, the end of the financial year shall be considered to be the end of the new financial year if the period from the beginning of the financial year to the end of the new financial year is not longer than eighteen months. Where such period is longer than eighteen months, transitional financial year shall be set and its beginning shall be the end of the previous financial year whereas the end of it – the beginning of the new financial year.
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4.Upon the incorporation of a legal person, the first financial year of a legal person shall be the period from the day of its incorporation to the end of the financial year. With the expiry of the term of a legal person the period from the beginning of the financial year to the day of the expiry of the term of a natural person shall be considered to be the last financial year.
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5.Financial year of a legal person may not be altered more frequently than one time in five years. Where a legal person changes its financial year for a financial year coinciding with the calendar year, the given provision shall not be applied.
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Article 2.53Branch Office of a Legal Person
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1.Branch office of a legal person shall be its structural unit, which has its registered office and performs all or part of legal person’s the functions.
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2.Branch office of a legal person shall not be a legal person. The legal person shall be liable for the obligations of the branch office and the branch office shall be liable for the obligations of the legal person.
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Article 2.54Regulations of the Branch Office of a Legal Person
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1.Branch office of a legal person shall act in accordance with the regulations approved by a legal person. They must contain the following information:
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1)business name of the branch office;
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2)registered office of the branch office (address);
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3)goals of activities of the branch office;
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4)managing body of the branch office and its competence;
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5)term of the activities of the branch office (where it is fixed
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6)other provisions established by the law or a legal person.
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2.Regulations of the branch office shall, too, provide information specified in Article 2.44 of the given Code on the founder of the branch office and on the managing body of a legal person, which enjoys the right to form or dissolve managing bodies of the branch office and make decisions on the legal status of the branch office.
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Article 2.55Regulation of Branch Offices
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1.Provisions of PART II of the given book shall be applied to the branch offices and their activities inasmuch as they do not contradict the essence of a branch office and by taking due regard of peculiar provisions laid down in the given Article.
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2.Documents of the branch office listed in Article 2.44 of the given Code shall also contain analogous information about the legal person, with the exception of information specified in paragraph 3 of Article 2.44 of the given Code in cases, where a foreign legal person or other organisation is the founder of the branch office.
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3.Upon the registration of a branch office a foreign legal person or other organisation shall have to notify the Register of legal persons about the changes in the data of a legal person’s documents, which were filed with the register, and the legal status of a legal person, and present documents of annual financial accountability, including consolidated balance sheet, in cases where such accountability, according to the law, is applied to a foreign legal person or other organisation.
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Article 2.56Representative Office of a Legal Person
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1.Representative office of a legal person shall be a unit of a legal person, which shall have its registered office enjoy the right to perform all operations specified in paragraph 2 of the given Article.
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2.Representative office of a legal person shall have the right to represent the interests of a legal person and safeguard them, to enter into contracts as well as perform other operations in legal person’s name, to conduct import and export operations exclusively between foreign legal persons and other organisations, which have established the branch office or related enterprises, institutions or organisations and the branch office.
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3.Representative office of a legal person shall not be a legal person.
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Article 2.57Regulations of a Representative Office of a Legal Person
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1.Representative office of a legal person shall act pursuant to the regulations approved by a legal person which have to indicate:
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1)business name of a representative office;
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2)registered office of a representative office;
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3)goals of activities of a representative office;
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4)managing body of a representative office and its competence;
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5)period of activities of a representative office where it is limited;
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6)other provisions established by the law or a legal person.
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2.Regulations of the representative office of a legal person shall also include information specified in Article 2.24 of the given Code about its founder and about the managing body which has the right to form and dissolve managing bodies and make decisions on the legal status of a representative office.
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Article 2.58Regulation of the Representative Office of a Legal Person
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1.Provisions of Part II of the given book shall be applied to representative offices inasmuch as they do not contradict the essence of a representative office and by taking due regard of peculiar provisions laid down in the given Article.
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2.Documents of a representative office listed in Article 2.44 of the given Code must also contain similar information about a legal person, with the exception of information specified in paragraph 3 of Article 2.44 of the given Code in cases, where the founder of a representative office is a foreign legal person or other organisation.
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3.Upon registration of a representative office a foreign legal person or other organisation must notify the Register of legal persons about the alterations of data in documents of a legal person filed with the register and the legal status of a legal person, produce documents of annual financial accountability, including consolidated balance sheet, in cases, where such accountability is mandatory pursuant to laws applied to a foreign legal person or other organisation.
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CHAPTER V
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INCORPORATION OF A LEGAL PERSON
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Article 2.59Procedure for the Incorporation of a Legal Person
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Legal persons shall be incorporated pursuant to the procedure established by the law and the given Code.
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Article 2.60Incorporators of a Legal Person
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1.Incorporator of a legal person shall be a person who has concluded a contract for the incorporation of a legal person. Upon passing a respective law or, where it is provided for by the law, other legal act, the state, or, where it is provided by the law, a municipality, public or local self-government institutions upon passing a respective legal act, which forms the basis for the incorporation of a public legal person, shall, too, be considered the incorporators of a legal person.
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2.Natural and legal persons may be incorporators of a legal person.
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3.The law may provide for cases, where for the purpose of protection of public order or where retaliatory action is taken, a foreign legal person, other organisation or a foreigner may not be an incorporator or a member of legal persons.
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Article 2.61Contracts Concluded Prior to the Incorporation of a Legal Person
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1.A special managing body of a legal person or some other body defined in the incorporation document shall have the right to approve contracts, which in a legal person’s name were concluded by other persons prior to the incorporation of a legal person. When such contract is concluded it should be indicated that it is concluded in a legal person’s name and in its interests. Where such reference fails to be included the person who has concluded the contract and the legal person whose managing body approved the contract concluded in its interest shall have solidarity obligation to discharge their contractual obligations.
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2.Where such contract fails to be approved by the body of the legal person which was incorporated at a later date all obligations arising from the contract shall have to be discharged by the person who has concluded the said contract. Where such contract has been entered into by some persons and where a legal persons fails to approve it all persons shall have the solidarity obligation to discharge obligations arising from the said contract.
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Article 2.62Register of Legal Persons
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1.Legal person shall have to be registered with the Register of legal persons.
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2.Register of legal persons shall file legal persons and store data thereof. Register of legal persons shall be the principal register of the state.
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3.Register of legal persons must be supplied with all data prescribed by the law on legal persons themselves and their activities (principle of disclosure).
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4.A public institution prescribed by the law shall be the institution for the administration of the Register of legal persons (registrar of the register).
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Article 2.63Moment of Incorporation of a Legal Person
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1.A legal person shall be deemed incorporated as of the moment of its registration with the Register of legal persons.
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2.In cases prescribed by the law or laws, other legal act which formed the basis for the incorporation of public legal person may establish that a legal person is deemed incorporated after the act forming the basis for the incorporation has entered into force. In such cases the said legal act must contain the data laid down in Article 2.66 of the given Code and the said legal act has to be published and produced to the Register of legal persons.
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Article 2.64Registration of Legal Persons
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1.A legal person shall be registered with the Register of legal persons after documents listed in paragraph 2 of the given Article have been produced except as otherwise provided by other laws in relation to cases established by the provisions of the given Code.
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2.The following documents shall have to be produced to the Register of legal persons for the registration of a legal person:
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1)application of the established form for the registration of a legal person;
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2)incorporation documents of a legal person;
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3)licence, where issuance of a licence prior to the incorporation of a legal person is provided for by the law;
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4)documents verifying the authenticity of documents which are produced to the Register and the compliance of incorporation documents with the provisions of laws as well as documents verifying the fact that a legal person may be registered because contractual obligations assumed in the incorporation contract have been fulfilled and the circumstances prescribed by the law and incorporation documents have emerged.
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5)document verifying the payment of a registration fee except in cases where a person is exempted from a registration fee.
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6)other documents prescribed by the law.
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3.A legal person shall be registered within 30 days as of the day on which all documents listed in Paragraph 2 of the given Article have been produced.
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4.Regulations of the Register of legal persons shall establish the procedure for the registration of legal persons.
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5.A legal person may be removed from the Register only on the expiry of the term of a legal person.
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Article 2.65Certificate of Registration and Code of a Legal Person
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Upon registration of a legal person, the registrar of the Register shall issue a certificate of registration and shall give a legal person a code of a legal person.
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Article 2.65Data of the Register of Legal Persons
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1.Register of legal persons shall have to include:
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1)business name of a legal person;
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2)juridical form of a legal person;
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3)code of a legal person;
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4)registered office of a legal person;
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5)bodies of a legal person;
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6)members of managing bodies of a legal person (name, surname, personal code (code of a legal person), residence (registered office);
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7)members of managing bodies of a legal person and members of a legal person having the right to conclude contracts in the legal person’s name, limits of authority and samples of signatures;
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8)branch offices and representative offices of a legal person (names, codes, registered offices, members of managing bodies of branch offices and representative offices);
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9)restrictions on the activities of a legal person;
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10)legal status of a legal person;
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11)expiry of the term of a legal person;
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12)dates of alterations in the data filed with the register and dates of the alteration of documents;
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13)other data prescribed by the law.
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2.Where legal persons the members whereof are liable for contractual obligations of a legal person are registered, additional information on a member, a natural person, of a legal person shall be furnished: name, surname, personal code, residence or business name of a legal person, juridical form, code and registered office.
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3.Where the data, listed in paragraphs 1 and 2 of the given Article has been altered and where incorporation documents or other data listed in paragraphs 1 and 2 of the given Article has been altered, a legal person must file an application of the established form requesting the registration of the alterations with the Register of legal persons within thirty days as of the day the alterations have been made. Documents listed in point 4 paragraph 2 of Article 2.64 of the given Code and full text of the altered document, where the document has been altered, must be produced together with the application requesting the registration of the alterations.
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4.The documents of the annual financial accountability of enterprises shall be produced to the Register (annual financial accountability) every year within thirty days as of the moment, when a legal person approves them in accordance with the procedure established by the law and incorporation documents of a legal person except as otherwise provided for by the law.
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5.Alterations in the data listed in points 5-7 and 11 of paragraph 1 of the given Article as well as alterations of documents shall enter into force only upon their registration with the Register of legal persons with the exception of derogations provided by the law.
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Article 2.67Persons Responsible for the Production of Documents of a Legal Person and the Data of the Register to the Registrar of the Register
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1.Managing body of a legal person shall be responsible for the timely production of documents of a natural person, data and other requested information to the Register of legal persons except as otherwise provided by the law or incorporation documents.
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Article 2.68Refusal to Register
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1.The registrar may refuse to register a legal person or the alterations in the data and documents of a legal person only in cases where:
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1)the application to register a legal person (alterations of data and documents to be registered with the register, removal of data) fails to conform to the established form or not all documents specified in Articles 2.63 and 2.64 are produced;
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2)the term specified in paragraph 4 of Article 2.46 of the given Code has expired;
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3)data and documents produced to the Register are not in conformity with one another, are vague or misleading;
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4)form or content of the documents fail to conform to the requirements provided for by law.
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2.Where obstacles for the registration of the produced documents and data arise, the registrar shall set a time limit for the elimination of defects. Where the defects are not eliminated within the established time limit and corrected documents are not produced to the registrar, the registrar makes a motivated decision to refuse the registration of a legal person (alterations in data or documents).
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3.Decision to refuse registration of a legal person (data to be registered in the register or alterations in documents) shall be appealed to the court in accordance with the procedure established by the law.
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Article 2.69Rectification of the Register of Legal Persons
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1.Errors in the Register of legal persons shall be rectified on the application of a legal person or a person whose data has been inserted in the Register or on the initiative of the registrar.
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2.Upon the detection of an error in the Register, the registrar shall have, without delay, to notify, in writing, a legal person. Where a legal person fails to raise objections within the time limit set by the registrar for the rectification of the error, the registrar shall rectify the data in the register.
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3.In the event that a legal person, the data whereof has been registered with the Register, requests the rectification of an error in the Register, the registrar shall have to rectify the data in the Register within three business days as of the day, on which the application and the documents verifying the facts have been received.
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4.The registrar shall have to notify, where applicable, the persons who were given erroneous data about the rectification of the mistake in the Register.
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Article 2.70Liquidation of a Legal Person on the Initiative of the Registrar of Legal Persons
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1.Where a legal person registered with the Register fails to renew its data in the Register of legal persons within five years and where there are grounds to presume that the said legal person has stopped its activities or where an enterprise failed to produce documents of financial accountability, which were specified in paragraph 4 of Article 2.66 of the given Code for a period exceeding twenty four months and failed to inform the administrator of the Register of legal persons about the reasons thereof or where management bodies failed to make decisions due to the lack of quorum after the resignation of the members of managing bodies of a legal person and the situation persists for more than six months or where members of managing bodies of a legal person may not be contacted at the registered office of a legal person or locations, the addresses of which have been produced to the Register of legal persons, the registrar of the Register shall have the right to initiate liquidation of a legal person.
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2.The registrar of legal persons shall send a notification about the pending liquidation of the legal person to the registered office of a legal person or to the addresses of the members of managing bodies of a legal person which were produced to the register of legal persons as well as make the public announcement of the said notification in the source provided for in the regulations of the register of legal persons.
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3.Where within three months following the public announcement of the pending liquidation of a legal person the registrar of legal person fails to receive objections to the pending liquidation of a legal person he applies to the court requesting to put the legal person into liquidation.
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Article 2.71Publication of the Register of Legal Persons
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1.Data of the Register of legal persons, documents stored in the register as well as any information supplied to the Register shall be made public.
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2.A separate file shall be made up for each legal person. Documents produced to the Register, data and other information related to the given legal person shall be stored and safeguarded in the said file.
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3.The data produced by the Register, copies of documents or information shall have a mark “attested abstract” (“attested copy”) except in cases where an applicant fails to request the said mark. The copies of the data stored in the register, of documents or information attested in the said manner shall have prima facie authority.
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4.Every person shall have the right to receive, free of charge, oral information on the legal status of a legal person and restrictions imposed of his activities in accordance with the procedure established by the Register of legal persons.
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Article 2.72Procedure and Mode of Publication of the Data of the Register of Legal Persons
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1.The registrar shall have to make a public announcement of the registration of a legal person, alteration of the data stored in the Register in accordance with the procedure established by the Register of legal persons and in the source designated by the said Register.
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2.Copies of the data and documents stored in the Register of legal persons shall be issued pursuant to the procedure established by the regulations of the Register of legal persons.
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3.Every person shall enjoy the right to be issued copies of any data, documents and information stored in the Register after a fee not exceeding the costs of the said work has been paid.
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4.Data of the Register of legal person shall be issued free of charge:
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1)to natural persons whose data are inserted in the Register – the Register stores the data about the said persons;
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2)to judicial institutions – inasmuch as they need to discharge their direct functions;
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3)to other State registers and information systems – on the data exchange basis.
\n
5.a fee for the issuance of copies of the data and documents of legal persons shall not exceed the costs of the administration of the Register.
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Article 2.73Liability for Unlawful Refusal to Register a Legal Person and for Errors in the Register of Legal Persons
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1.Where a legal person and the data produced to the Register or documents to be registered with the Register, are unlawfully refused registration a legal person shall have the right to seek a legal redress for the damage inflicted on him by the said actions.
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2.Damage incurred by the actions specified in paragraph 1 of the given Article on a legal person as well as damage incurred on other persons in the administration of the Register of legal persons shall be redressed by the State. The said damage is recovered in judicial proceedings. Institution authorised by the State shall represent the State in civil cases for the award of damage.
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CHAPTER VI
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LEGAL CAPACITY OF LEGAL PERSONS
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Article 2.74Legal Capacity of Legal Persons
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1.Private legal persons may be in possession of or achieve any civil rights and assume duties except those, which may emerge only when such characteristics of a natural person as gender, age and consanguinity are in place.
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2.Public legal persons shall have a special legal capacity, i. e they may be in possession of or achieve only such civil rights and assume such duties, which are not at variance with their incorporation documents or goals of activities.
\n
3.Provisions of paragraph 3 of Article 2.4 of the given Code shall be applied to legal persons mutatis mutandis.
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Article 2.75Restrictions on the Legal Capacity of Legal Persons
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1.Legal Capacity of legal persons may not be imposed limitations in any other manner except as by express provision and procedure of law.
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2.Legal Capacity of an individual legal person may be imposed limitations only by the court judgement.
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Article 2.76Prohibition of Discrimination
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1.It shall be prohibited to establish in legal acts, for discrimination purposes, different rights, obligations or privileges for separate legal persons.
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Article 2.77Licensing of the Activities of Legal Persons
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1.In cases provided by law legal persons may be engaged in a certain type of activities only after a licence has been granted in accordance with the procedure established by the law.
\n
2.A legal person must be in possession of all licences (permits) which are defined in the law as a necessary prerequisite for its activities.
\n
Article 2.78Licensing Requirements
\n
1.The Government approves licensing requirements for every licenced sphere of activities provided by law except as otherwise provided by other laws.
\n
2.Licensing requirements shall indicate the following:
\n
1)licenced activities;
\n
2)licensing institution and its authority;
\n
3)documents for the issuance of a licence;
\n
4)procedure and term for the investigation of documents;
\n
5)types of licences, conditions of their issuance, re-issuance of a licence;
\n
6)forms of licences;
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7)procedure for the registration of issued licences;
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8)cases of refusal to issue a licence;
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9)conditions of licenced activities;
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10)procedure for the supervision of the observance of the conditions of a licence;
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11)procedure and cases for the revocation and withdrawal of a licence.
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3.Regulations of licensing may provide for other requirements and a different procedure.
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Article 2.79Issuance of a Licence
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1.Where the requirements specified in the regulations of licensing are fulfilled an open-ended licence shall be issued.
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2.Except as otherwise provided by law, licence for the engagement in a certain activity or a written motivated refusal to issue a licence shall be submitted to an applicant within thirty days as of the day on which the documents for the issuance of a licence were produced.
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3.Refusal to issue a licence may not be based on the inexpediency of activities and has to be motivated.
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4.Information on the issuance of a licence, its revocation and withdrawal shall be stored in the register of legal persons. The licensing authority must notify the register of legal persons about the issuance, revocation and withdrawal of licences in accordance with the procedure established by the regulations of the register of legal persons.
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5.Upon the issuance of a licence a legal person must supply information specified in the licensing requirements and related to the licenced activities or conditions predetermining the issuance thereof and allow the institution for the supervision of licenced activities to verify it.
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6.Stamp tax for the issuance of a licence shall not exceed the costs of the issuance of a licence and supervision thereof.
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Article 2.80Prohibition to Use Administrative Methods
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1.Public or municipality institutions shall be prohibited, in cases not prescribed by law, to use methods of administrative regulation of the activities of legal persons.
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2.Where, in accordance with the procedure prescribed by law, an emergency or martial law is declared or a certain territory is declared the region of disaster, legal persons must carry out the instructions of the Government or local self-government institution.
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CHAPTER VII
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BODIES OF A LEGAL PERSON
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Article 2.81Bodies of a Legal Person
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1.Legal persons achieve civil rights, assume civil duties and implement them through their bodies which are formed and act in accordance with laws and documents of incorporation of legal persons 2. In cases prescribed by laws and incorporation documents legal persons may achieve civil rights and assume duties through their members.
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3.Members of legal persons enjoy the right to institute an action at law requesting to prohibit the managing bodies of a legal person to enter into contracts which contravene the goals of the activities of a legal person or overstep the authority of a managing body of a legal person.
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4.Only natural persons may be members of managing bodies of a legal person whereas both natural and legal persons may be members of other bodies.
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Article 2.82Authority and Functions of the Bodies of Legal Persons
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1.Authority and functions of the natural persons’ bodies shall be established by the law and incorporation documents of a legal person, which regulate legal persons of a respective juridical form.
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2.Where incorporation documents and laws regulating the activities of a legal person fail to provide a different structure of managing bodies, each legal person must have a single-person or a collegial managing body and the general meeting of members. Laws regulating individual juridical forms of legal persons may establish that an managing body and the general meeting of members may be considered to be the same body of a legal person.
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3.A managing body shall be responsible for the financial accountability, convening of the general meeting of members of a legal person, production of documents and data to the register of legal persons, notification of the members of a legal person about the essential events, which are important for the activities of a legal person, organisation of the legal person’s activities, accounting of the members of a legal person and actions specified in paragraph 3 of Article 2.4 of the given Code, except as otherwise provided in laws regulating the activities of legal persons or incorporation documents of a legal person.
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4.Decisions of the bodies of a legal person may, in judicial proceedings, be declared void where they contravene the imperative provisions of the law, incorporation documents of a legal person or principles of reasonableness and good faith. Where the decision infringes their rights or interests, action can be taken by the creditors of a legal person, a respective managing body of a legal person, member of a legal person or other persons prescribed by the law. Three-month limitation of actions period shall be set for the said actions. It shall be counted as of the day on which the defendant found out or had to find out about the contested decision where the given Code and other laws fail to set another term of limitation of actions or a different procedure for the challenging of the decision.
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Article 2.83Contracts Concluded in Overstepping the Authority of Managing Bodies of a Private Legal Person
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1.Contracts concluded by the managing bodies of a private legal person in overstepping their authority shall impose obligations on a legal person except in cases where it is proved that concluding the contract the third person was aware or due to certain circumstances may not have failed to be aware of the fact that the contract has been entered into by a managing body of a legal person who was not authorised to conclude it.
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2.Paragraph 1 of the given Article shall not be applied where quantitative representation has been established, i.e. only some members of a managing body together or a member of a managing body and a representative together are authorised to act in the name of a legal person. Quantitative representation shall have to be provided in the incorporation documents of a legal person, specified in the register of legal persons and publicised in accordance with the procedure established by the regulations of the register of legal persons.
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3.Where a legal person fails to satisfy fully the claim of a third person, the person who has concluded the contract under circumstances laid down in paragraph 1 of the given Article shall take on subsidiary liability.
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Article 2.84Contracts Concluded in Overstepping the Authority of Managing Bodies of a Public Legal Person
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1.Contracts concluded by administrative bodies of a public legal person in overstepping their authority shall not impose obligations on a legal person.
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2.Where, at a later date, the person approves the contract, the contract shall become valid as of the day of its conclusion.
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3.A person who, under the circumstances laid down in paragraph 1 of the given Article, has concluded a contract, which is not approved by a legal person, must redress the damage incurred on the third person, if he fails to prove that concluding the contract the third person was aware or due to certain circumstances may not have failed to be aware of the fact that the contract has been concluded in overstepping the authority of the managing body of a legal person.
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Article 2.85Public Announcement of the Authority
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Publication and indication in the Register of legal persons of the authority of managing bodies of legal persons which was stipulated in incorporation documents shall not affect the application of the provisions of Articles 2.83 and 2.84.
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Article 2.86Equality of Members of Legal Person’s Managing Bodies
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Members of legal person’s managing body shall enjoy equal rights and obligations with the exception of the case specified in paragraph 2 of Article 2.93 of the given Code.
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Article 2.87Duties of Members of Legal Person’s Managing Bodies
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1.Member of a legal person’s body shall have to act in good faith and reasonable manner in respect of the legal person and members of other legal person’s bodies.
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2.Member of a managing body of a legal person shall have to be loyal to the legal person and maintain confidentiality.
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3.Member of legal person’s managing body shall have to avoid a situation where his personal interests are contrary or may be contrary to the interests of a legal person.
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4.Member of a managing body of a legal person may not confuse the property of a legal person with his own property and, without consent of members of a legal person, use the property or the information, which he obtains in the capacity of a member of legal person’s body, for his personal gain or third person’s gain.
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5.A member of a managing body of a legal person must notify other members of the managing body of a legal person about the circumstances laid down in paragraph 3 of the given Article and define their nature and, where applicable, their value. Such information shall have to be supplied in writing or included into the minutes of the meeting of legal person’s bodies.
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6.A member of a managing body of a legal person may enter into a contract with a legal person being in the capacity of a member of the said person’s body. He shall have, without delay, to notify other bodies of a legal person about the said contract in accordance with the procedure established in paragraph 5 of the given Article or members of a legal person where incorporation documents of a legal person fail to provide explicitly for a different procedure of notification.
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7.A member of a managing body of a legal person who fails to perform or performs improperly his duties specified in the given Article or incorporation documents must redress all damage incurred on a legal person except as otherwise provided by law, incorporation documents, or an agreement.
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Article 2.88Agreements on the Voting of the Members of a Legal Person
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1.Members of a legal person may conclude an agreement on general voting at the meeting of the members of a legal person. Agreements on voting are null and void where an obligation is assumed:
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1)to vote according to instructions received from the managing bodies of a legal person;
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2)to vote for all proposals made by the managing bodies of a legal person;
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3)to vote according to instructions or abstain from voting for certain remuneration.
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2.An agreement on voting may establish that parties to the said agreement may grant an authorisation to a third person to vote at the general meetings of the members of a legal person in the name of the parties to the agreement on voting, and such authorisation may be revoked only in cases provided for in the said agreement.
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3.Upon the issuance of the authorisation in accordance with the provisions of paragraph 2 of the given Article, the parties to the agreement are deprived of the right to vote or to grant authorisation to other persons to vote at the meetings of members of legal person for issues specified in the authorisation.
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4.Where provisions of an agreement on voting have been infringed by one party to the agreement the court is authorised to oblige re-counting of the results of voting at the meeting of members of a legal person in accordance with the agreement on voting and reverse the decision taken at the meeting of members of a legal person in cases where voting in violation of the agreement was decisive in arriving or not arriving at a certain decision.
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Article 2.89Transfer of a Voting Right
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1.A member of a legal person may transfer his right to vote at the general meeting of members of a legal person to other persons and establish the procedure and modes of exercising the voting right.
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2.An agreement on the transfer of the voting right enters into force as of disclosure to a legal person of the data on the number of transferred votes, time limit of transfer, grounds for the entitlement to the voting right, member of a legal person who transfers the right and the person who achieves the right (inasmuch as is provided in incorporation documents of a legal person, laws or the established practice of a legal person).
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3.A legal person must notify the member of a legal person who transfers his voting right and the person who achieves it as well as, at the nearest meeting of members of a legal person, announce that he has received documents and information specified in paragraph 2 of the given Article. Obligations of a legal person related to the convening of the general meeting of members of a legal person are fulfilled in respect of the person who has achieved a voting right.
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4.Term for an agreement on the transfer of a voting right may not exceed a period of ten years.
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5.Other non-property rights enjoyed by a member of a legal person may, too, be transferred by an agreement on the transfer of voting rights.
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Article 2.90Minutes
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1.Meetings of a legal person’s collegiate body shall keep the minutes.
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2.The minutes shall include the time and place of a meeting, number of participants, the fact of having a quorum, results of voting, and decisions. The minutes shall have to be annexed by the list of participants and information on the convening of the meeting. On the request of participants of the meeting information specified by them shall have to be included into the minutes. All alterations and supplements shall have to be deliberated.
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3.Minutes shall have to be stored no less than ten years and on the request of each participant or other member of a managing body who participated or was entitled to participate in the meeting a copy of the minutes shall have to be issued. A legal person shall have the right to demand from a member of a legal persona a fee, not exceeding the costs of its issuance, for the copy of minutes.
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4.Where a decision is signed by all members of a managing body of a legal person or where only one person constitutes a body of an legal person and in this case a decision made by that member of a legal person equals a decision made by a managing body of a legal person, minutes shall not be taken.
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5.Laws may provide for different or supplementary requirements for minutes compared to those, which are laid down in paragraph 2 of the given Article.
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Article 2.91Keeping and Signing of Minutes
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1.Minutes shall be taken by a secretary of a meeting, a chairman of a meeting, where a secretary is not elected, or by a chairman of a collegiate managing body of a legal person where a chairman and secretary of a meeting are not elected.
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2.Minutes are signed by the person who has taken it and by the chairman of a meeting and in cases where he is not elected – chairman of a collegiate managing body of a legal person.
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3.Minutes shall be taken and signed within a time limit established in incorporation documents or laws and in all cases, however, must not exceed thirty days as of the day on which a meeting was convened.
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Article 2.92Remarks on the Minutes
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1.Participants of a meeting shall enjoy the right to make remarks on the minutes within three days as of the moment they have read them but neither the period of three days nor the maximum time limit for taking minutes established in incorporation documents may be exceeded.
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2.Remarks on the minutes shall be attached to the minutes together with the information whether persons who signed the minutes agree or disagree with them.
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3.Failure to make remarks shall not preclude the right to contest decisions of the managing body of a legal person.
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Article 2.93Voting
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1.Resolutions of collegiate bodies of a legal person shall be adopted by voting.
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2.Equality of votes shall mean that the same number of votes “for” and the same number of votes “against” have been received. In cases of equality of votes, vote of the chairman of a collegiate body shall be decisive. Where the chairman of a collegiate body has not been designated or fails to participate in the resolution adopting process, the resolution, in the case of equality of votes, shall be deemed not adopted.
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3.Where members of a collegiate body fail to raise objections voting could be done, in writing, in the form of an interview.
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4.In urgent cases the court may designate members of a body of a legal person.
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5.Member of a body of a legal person may vote himself or may authorise other persons to vote for him as his proxy except as otherwise provided in incorporation documents of a legal person.
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6.Decision of a chairman of the sitting (meeting) of a legal person’s collegiate body on the results of voting shall be decisive except in the cases where the voting is held in writing or a commission for counting of votes is established. In such cases the decision of the commission shall be final. Where upon the announcement of the results of voting by the chairman of the sitting or the commission for counting of votes, doubts are expressed on the lawfulness of voting, repeated voting, upon the request by the majority of members of a collegiate body, must be done.
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7.Laws and incorporation documents of a legal person may provide for a different procedure of voting.
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8.Provisions of the given Article shall not be applied to the general meeting of shareholders.
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Article 2.94Verification of a Decision
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Where, for purposes of validity of a resolution, approval of the body of other legal person may be requested, the said approval may be effected at a later date within a reasonable period of time.
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CHAPTER VIII
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TERMINATION AND RESTRUCTURING OF LEGAL PERSONS
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Article 2.95Termination of Legal Persons
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1.Legal persons shall be terminated by way of liquidation or reorganisation.
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2.Reorganisation shall be termination of a legal person without the liquidation procedure.
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3.A legal person shall be terminated as of the day of its removal from the Register of legal persons.
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Article 2.96Reorganisation of Legal Persons
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1.Resolution to reorganise a legal person shall be passed by members of a legal person or the court in cases provided by law.
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2.Resolution to reorganise, by way of merger, a legal person, which is joined by other legal person, may, too, be passed by the managing body of a legal person where the given circumstances emerge.
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1)Public announcement about the terms of reorganisation of legal persons laid down in paragraph 2 of Article 2.99 of the given Code shall be made no later than thirty days prior to the general meeting of members of a legal person, which is going to be merged.
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2)Every member of a legal person shall have the right to acquaint himself with the documents specified in paragraph 4 of the given Article.
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3)One or some members of a legal person with no less than 1/20 of votes at the general meeting of members of a legal person shall enjoy the right to request the convening of the general meeting of legal person’s members on the reorganisation, by way of merger, of a legal person.
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3.Resolution to reorganise a legal person shall be passed by the qualified majority vote. It shall be set in the incorporation documents and may be no less than 2/3 of the votes given by the persons present at the general meeting. Subject to paragraph 1 of Article 2.101 of the given Code, resolution to reorganise a legal person may be passed only upon the expiry of a thirty days period following the public announcement that terms for the reorganisation have been set. Terms of reorganisation shall have to be approved by a resolution to reorganise a legal person and documents of incorporation shall have to be altered or new documents shall have to be drawn up.
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4.Members of a legal person shall have the right to acquaint themselves with the terms of reorganisation, incorporation documents of legal persons who will continue the activities after the reorganisation or documents of newly incorporated legal persons or with their projects and reports drawn up by all managing bodies of legal persons participating in the reorganisation, assessments of experts as well as financial statement for the last three financial years. Where terms of the reorganisation were set six months following the end of the financial year of at least one legal person participating in the reorganisation, interim financial statement has to be issued in accordance with the same rules applied to the earlier financial statement and has to be presented to the members of a legal person. It shall be issued no earlier than three months prior to the setting of terms for the reorganisation. All members of a legal person shall have the right to receive copies of the said documents.
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5.Managing bodies of legal persons shall have to notify members of legal persons about all essential changes after terms of reorganisation have been set and prior to taking decision on the reorganisation and attach this written notification to documents specified in paragraph 4 of the given Article as well as inform, orally, about essential changes in the general meeting of members of legal persons.
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Article 2.97Modes of Reorganisation of Legal Persons
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1.Legal persons may be reorganised by way of merger and division.
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2.Joining and consolidation shall be the possible modes of merger of a legal person.
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3.Joining shall be merger of one or more legal persons to the other legal person, which become successors to all rights and obligations of the reorganised legal person.
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4.Consolidation is a merger of two or more legal persons into a new legal person, which becomes a successor to all rights and obligations of reorganised legal persons.
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5.Possible modes of splitting up of legal persons shall be division and parcelling out.
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6.Parcelling out shall be parcelling out of legal person’s rights and obligations to other functioning legal persons.
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7.Division shall be incorporation of two or more legal persons on the basis of the legal person under reorganisation, which become successors to certain parts of legal person’s rights and obligations.
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8.Where the resolution to liquidate a legal person was not passed by the general meeting of the members of a legal person or where at least one member of a legal person became a successor to a part of property of a legal person under liquidation it shall be prohibited to reorganise such legal person under liquidation.
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9.Specific character of reorganisation of individual legal persons may be prescribed by the laws, which regulate individual legal forms of legal persons.
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Article 2.98Reorganisation of Legal Persons of Different Legal Forms
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1.Only legal persons of the same legal form may participate in the reorganisation procedures with the exception of derogations provided by laws regulating individual legal forms of legal persons.
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2.Upon termination of a reorganised legal person whose members are liable for obligations of a legal person, members of the terminated and reorganised legal person shall, irrespective of the terms of reorganisation, accept subsidiary liability for the obligations of the dissolved legal person, which emerge prior to the legal person’s, who will continue activities of the dissolved legal person, becoming a successor to the rights and obligations of the terminated legal person. Where a member of a legal person fails to become a member of a legal person who, upon reorganisation, will continue the activities of the dissolved legal person throughout the reorganisation procedure as well as later, he shall not be exempted from the liability specified in the given paragraph.
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Article 2.99Terms of Reorganisation and Report on the Reorganisation
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1.Managing bodies of legal persons participating in the reorganisation shall have to prepare the terms of reorganisation which have to indicate:
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1)information, specified in Article 2.44. of the given Code, on all legal persons participating in the reorganisation;
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2)mode of reorganisation, terminated legal persons and legal persons continuing the activities after reorganisation;
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3)procedure for becoming a member of a legal person who continues activities after reorganisation, terms and time limit as well as payments to the members of a legal person;
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4)moment from which a legal person continuing the activities becomes a successor to rights and obligations of a terminated legal person;
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5)ancillary rights conferred to managing and other bodies of a legal person, employees of administration or experts specified in Article 2.100 if the given Code.
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2.Public announcement of the terms of reorganisation shall be made subject to the provisions of paragraph 1 of Article 2.101 of the given Code and filed with the Register of legal persons no later than on the first day of publication by applying the provisions of paragraph 3 of Article 2.66 of the given Code mutatis mutandis.
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3.Managing bodies of each legal person participating in the reorganisation shall have to draw up written reports, which have to indicate the goals of reorganisation, explain the terms of reorganisation, continuity of legal person’s activities, time limit for reorganisation and economic grounds.
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4.Paragraph 3 of the given Article shall be applied only in those cases where a joint-stock company, participating in the reorganisation, or other persons whose members have no less than 1/20 of all votes request it.
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Article 2.100Assessment of the Terms of Reorganisation
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1.Terms of the reorganisation of a legal person shall be assessed by an independent expert who has the necessary qualifications.
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2.Independent experts shall be designated by each legal person participating in the reorganisation. Where there is a wish to designate a single expert for all legal persons under reorganisation such designation must be approved by the registrar of legal persons
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Article 2.101Protection of the Rights of Creditors of the Legal Persons under Reorganisation
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1.Public announcement of the terms of reorganisation shall be made three times with at least three-month intervals between the announcements or public announcement shall be made once and all creditors of a legal person shall be given a written notice thereof. The notice shall indicate data specified in points 1, 2 and 4 of paragraph 1 of Article 2.99 of the given Code as well as information where and when documents listed in paragraph 4 of Article 2.96 are available.
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2.A creditor of a legal person under reorganisation shall enjoy the right to request termination of the contract or performance of obligations before the expiry of the time limit as well as redress of damages, where this has been provided in the contract, and where there are grounds to presume that the performance of obligations may become more difficult due to reorganisation and where, on creditor’s request, a legal person failed to extend an additional guarantee for the performance of obligations.
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3.Creditors of the person under reorganisation shall have the right to acquaint themselves with the documents specified in paragraph 4 of Article 2.96 of the given Code and receive their copies.
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Article 2.102Invalidity of Reorganisation
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1.Only the court may declare reorganisation invalid and only in cases where the following circumstances emerge:
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1)no public announcement of the respective documents of the reorganisation procedure has been made or they were not filed with the Register of legal persons;
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2)resolutions on the reorganisation passed by the body of members of a legal person or other managing body are declared invalid;
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3)not all requirements for reorganisation established by the imperative provisions of law have been fulfilled.
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2.Where the period following the termination of a legal person to its applying to the court exceeds six months reorganisation may not be declared invalid.
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3.Where applicable, the court must grant a reasonable time limit to correct mistakes which gave grounds for declaring reorganisation invalid.
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4.Judgement of the court to declare reorganisation of a legal person invalid shall not invalidate the activities of a legal person after reorganisation or of a newly incorporated legal person prior to the alteration of respective data in the Register of legal persons. All legal persons who participated in the reorganisation shall accept solidary liability for obligations arising from such contracts of legal persons.
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Article 2.103Simplified Reorganisation of Legal Persons
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Where a legal person under reorganisation is joined to a legal person which is the only member of the legal person under reorganisation or where public legal persons participate in the reorganisation, paragraph 3 of Article 2.99 and Article 2.100 of the given Code shall not be applied.
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Article 2.104Restructuring of Legal Persons
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1.Restructuring shall be an alteration of the juridical form of a legal person whereby a legal person of a new juridical form becomes the successor to all rights and liabilities duties of the restructured legal person.
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2.Where a legal person, members of which are liable for obligations of a legal person, is restructured, members of a restructured legal person, irrespective of a new legal form of a legal person, shall accept subsidiary liability, for three years, for the obligations of the restructured legal person which emerge prior to the registration of a legal person of a new legal form with the Register of legal persons. Where a member of a restructured legal person fails to become a member of a legal person of as new juridical legal form he will not be exempted liability specified in the given paragraph either during restructuring or later.
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3.Public legal person, except public and municipality enterprises, may not be restructured into a private legal person.
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4.Restructuring of legal persons shall be applied, mutatis mutandis, provisions of paragraph 2 of Article 2.101, Article 2.102, paragraph 1 of Article 2.107 and paragraph 1 of Article 2.112.
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5.Laws regulating individual legal forms of legal persons may establish a specific mode for the restructuring of legal persons.
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Article 2.105Mandatory Restructuring of Legal Persons
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1.Laws may provide for circumstances under which a legal person must alter its legal form.
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2.Where within the time limit established by the law, which may not be shorter than nine months, members of a legal person fail to pass a resolution on the alteration of legal person’s legal form, it shall be considered that the legal form of a legal person has been altered and the legal person acts according to the documents of incorporation inasmuch as they do not infringe laws regulating activities of legal persons having the legal form into which the said legal person had to be altered.
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3.Where a legal person passes a resolution to liquidate a legal person within the time limit for the restructuring established by the law, paragraph 2 of the given Article shall not be applied.
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Article 2.106Grounds for Liquidation of a Legal Person
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Grounds for the liquidation of a legal person may only be the following:
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1)resolution of members of a legal person to terminate the activities of a legal person has been passed;
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2)the court or the creditor’s meeting has passed a decision to liquidate a bankrupt legal person;
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3)the court has passed a judgement to liquidate a legal person subject to the provisions of Article 2.131 of the given Code;
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4)the court has passed a judgement to liquidate a legal person in cases prescribed by Article 2.70 of the given Code;
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5)the term of the legal person has expired;
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6)the number of members of a legal person has decreased more than the permitted the minimum prescribed by law where member of a legal person fails to pass a decision within six months following the decrease, to reorganise or restructure a legal person;
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7)incorporation of a legal person has been declared invalid subject to the provisions of Article 2.114 of the given Code.
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Article 2.107Resolution of Members of a Legal Person on Liquidation
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1)Resolution to liquidate a legal person shall be passed by a qualified majority vote of members of a legal person. It shall be established in incorporation documents of a legal person and it may not be lower than 2/3 of all votes of the participants of the general meeting.
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2)Resolution to liquidate a legal person may not be reversed where at least one member of a legal person received part of the property of a legal person under liquidation.
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Article 2.108Appointment of a Liquidator
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1)After the resolution to liquidate a legal person has been passed, members of legal persons, general meeting of creditors, registrar of legal persons or the court must appoint a liquidator.
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2)Incorporation documents of a legal person or laws may provide for different rules for the appointment of a liquidator or establish a concrete liquidator. These rules shall not be binding on the court, general meeting of creditors or the registrar of legal persons.
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3)A liquidator shall be a person having the necessary qualifications. Some liquidators may be appointed. Where some liquidators are appointed liquidation commission shall be formed and one of the liquidators shall be appointed a chairman of the liquidation commission.
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4)Where the grounds for liquidation are points 5 and 6 of Article 2.106 of the given Code and where a member of a legal person fails to appoint a liquidator, managing bodies of a legal person or members of a legal person with no less than 1/20 of all votes and registrar of legal persons shall have to apply to court requesting the appointment of a liquidator.
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5)Where the grounds for liquidation are points 3 or 7 of Article 2.106 of the given Code, institution authorised by the Government shall discharge the duties of a liquidator before a liquidator has been appointed by a member of a legal person.. This institution, on the approval of the court, shall have the right to assign other person to discharge the duties of a liquidator.
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Article 2.109Revocation of a Liquidator of a Legal Person
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1)Liquidator of a legal person may be revoked by a simple majority of vote of legal person’s members present at the meeting.
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2)Members of a legal person with no less than 1/10 of all votes, a creditor with no less than fifty thousand Litas right of requisition or no less than 1/5 of the legal person’s employees shall have the right to apply to court to change the liquidator where he fails to act in a proper manner, is dishonest in effecting settlements with creditors and members of a legal person, is dishonest in discharging other duties or infringes the rights of legal person’s members, creditors or legal person’s employees.
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Article 2.110Authority of a Liquidator
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1)Managing bodies of a legal person shall be divested of their authority and the authority of legal person’s members shall be delegated to a liquidator as of the day of his appointment while in cases specified in paragraph 5 of Article 2.108 of the given Code – as of the moment when the resolution on the liquidation of a legal person enters into force.
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2)A liquidator shall enjoy the rights of a legal person’s managing body and provisions of Chapter VII of the given book shall be applied to him mutatis mutandis.
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Article 2.111Contracts of a Legal Person in Liquidation
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Legal person in liquidation may conclude only such contracts, which are related to the termination of legal person’s activities as well as those contracts, which are provided for in the liquidation resolution.
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Article 2.112Notification about Liquidation
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1)The person, which passed a resolution to liquidate a legal person in accordance with the procedure established in the regulations of legal persons, shall make a public announcement thereof three times with at least 3-month interval between the announcements or make a public announcement once and shall give all creditors written notices thereof. The notices shall include all data listed in paragraph 1 of Article 2.42 of the given Code.
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2)Register of legal persons shall, too, be notified about the liquidation no later than on the first day of the public announcement thereof in accordance with the procedure established in paragraph 3 of Article 2.66 of the given Code.
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3)A different procedure for the notification about the liquidation may be established by the given Code or other laws of the Republic of Lithuania.
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Article 2.113Sequence of and Procedure for the Satisfaction of Claims of a Legal Person’s Creditors
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1.In the event of legal person’s liquidation the following sequence of and procedure for the satisfaction of creditors’ claims shall be established:
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1)priority in satisfying creditors’ claims shall be given to claims secured by the mortgage of property of a legal person in liquidation - from the value of the mortgaged property;
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2)first in sequence for the satisfaction of claims shall be employees’ claims connected with labour relations; claims of compensation for maiming or other physical injuries, occupational disease or deprivation of life resulting from an accident in the place of work as well as claims of natural persons to settle accounts for agricultural produce supplied for processing.
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3)second in sequence for the satisfaction of claims shall be the claims related to taxes and other payments to the budget as well as compulsory state social insurance and health insurance contributions and foreign loans granted the State guarantee;
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4)third in sequence for the satisfaction of claims shall be all other claims of creditors.
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2.The claims of creditors of each successive sequence shall be fulfilled upon fully satisfying the claims of creditors of the preceding sequence. If assets are insufficient to fulfil all the claims of one sequence in full, said claims shall be satisfied in proportion to the amount of claims due to each creditor.
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Article 2.114Unlawful Incorporation of a Legal Person
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1.Unlawful incorporation of a legal person may be recognised only by the court and only in cases where:
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1)all incorporators were incapable or the provision establishing the minimum number of incorporators has been violated;
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2)documents of incorporation prescribed by law have not been drawn up or mandatory provisions of the regulations for the incorporation of a legal person have been violated;
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3)true goals of legal person’s incorporation were unlawful or contradict public order;
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4)minimum authorised capital has not been formed in accordance with the procedure established by law and within the established time limit;
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5)documents of a legal person fail to provide for its business name, goals, amounts of authorised capital and personal contributions of the members of a legal person where such requirements are provided in the mandatory provisions of laws regulating individual juridical forms of legal persons.
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2.Where the court passes a judgement that the incorporation of a legal person was unlawful the said legal person must be liquidated in accordance with the procedure established by law.
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3.Where applicable, the court must grant a reasonable period of time to correct mistakes due to which the incorporation of a legal person was recognised to be unlawful.
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4.Passing a judgement that a legal person has been incorporated unlawfully the court shall have to take into consideration the interests of employees and members of a legal person who participated in the incorporation of a legal person.
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5.The claim for the recognition of unlawful incorporation of a legal person may be filed by a member or managing bodies of a legal person as well as by a public prosecutor to protect public interests.
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CHAPTER IX
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FORCED SALE OF SHARES (INTEREST, CONTRIBUTIONS)
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Article 2.115Content of Forced Sale of Shares (Interest, Contributions)
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1.Members of a legal person listed in Article 2.116 of the given Code shall have the right to file an application to the court with the request that shares (interest, contributions) of a legal person which are in possession of a legal person’s member whose actions contradict the goals of legal person’s activities and where there are no grounds to expect any changes in the said actions, be sold to the applying member of a legal person.
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2.The claim for the forced sale of shares (interest, contributions) shall be filed with the district court according to the location of the registered office of a legal person. The court must inform the legal person, whose shares (interest, contributions) have to be sold in the forced manner, about the claim and the decisions.
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3.Participation of a lawyer in the process of litigation of the parties to the given cases shall be compulsory.
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4.Member of a legal person who has filed a claim for forced sale must apply to other members of a legal person to become co-claimants.
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Article 2.116Persons Entitled to File an Application for Forced Sale of Shares (Interest, Contributions)
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1.The following members of a private legal person shall have the right to file an application for forced sale of shares (interest, contributions):
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1)one or some shareholders of a private company whose face value of shares accounts for no less than 1/3 of the authorised capital;
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2)one or some members of a partnership whose interest accounts for no less than 1/3 of all interest of jointly owned assets;
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3)one or some members of an agricultural partnership or co-operative society whose contribution accounts for no less than 1/3 of all contributions.
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2.A member of a legal person shall have no right to file an application for the forced sale of shares (interest, contributions) under the circumstances laid down in Article 2.115 if incorporation documents of a legal person or contracts concluded by its members provide for different rules of forced sale of shares (interest, contributions) and the said rules may be applied.
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3.Member of a legal person shall have no right to file an application for forced sale of shares (interest, contributions) if he is controlled by a legal person the shares whereof (interest, contributions) have to be sold in a forced manner.
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4.Member of a legal person shall have no right to file an application for forced sale of shares (interest, contributions) if he himself is the legal person the shares whereof (interest, contributions) have to be sold in a forced manner
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Article 2.117Restrictions on the Transfer of Title to Shares (Interest, Contributions)
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1.A defendant shall have no right, without claimant’s consent, to sell or otherwise transfer the title to shares (interest, contributions), to mortgage them or otherwise encumber the rights to them as well as transfer or otherwise encumber the rights granted by the shares (interest, contributions) as of the day on which the court judgement becomes res judicata, except as otherwise decided by the court. The court shall enjoy the right to authorise the acts specified in the given paragraph if a defendant fails to give his consent thereof.
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2.A defendant shall have no right to sell, except according to the provisions of the given section, or otherwise transfer the title to shares (interest, contributions), to mortgage them or otherwise encumber the rights to them, as well as transfer or otherwise encumber the rights granted by the shares (interest, contributions) as of the day on which the court judgement becomes res judicata, except as otherwise decided by the court.
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3.The court may, upon plaintiff’s request, prohibit a defendant to exercise his right to vote without the consent of the court or a plaintiff.
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4.Prohibitions established in paragraphs 1 and 3 of the given Article shall be valid irrespective of the appeal against the court judgement.
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Article 2.118Appointment of Experts
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1.Upon satisfaction of a claim the court shall have to appoint experts to set the price of shares (interest, contributions).
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2.Experts shall start their activities only after the court judgement becomes res judicata . Experts shall have to present a written report on the price of shares (interest, contributions) to the court and the parties to the case.
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3.Articles 2.127 – 2.130 of the given Code shall be applied mutatis mutandis.
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Article 2.119Setting of a Price
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1.After the experts’ report on the price of shares (interest, contributions) has been submitted, the court shall have to pass a judgement on the setting of a price and establish the person who will have to reimburse experts’ work and other expenses borne. The court may decide that a legal person shall have to reimburse the given expenses.
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2.A separate appeal against the court judgement whereby a price is set may be lodged.
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Article 2.120Procedure for Forced Sale
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1.After the court judgement on setting a price has become res judicata the defendant shall have, in two weeks time, to transfer title to his shares (interest, contributions) to the plaintiff and the plaintiff shall have the right to accept the shares (interest, contributions) and pay the established price. The price shall have to be paid upon the transfer of title to the shares to the plaintiff. Transfer shall take place in the registered office of a legal person whose shares (interest, contributions) are sold or in some other place agreed upon by the plaintiff and the defendant.
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2.Where a defendant fails to discharge his duty to transfer the title to his shares (interest, contributions), a legal person shall have to transfer the title to the shares (interest, contributions) in the defendant’s name and issue documents confirming the owner’s rights to the shares (interest, contributions) sold in the forced manner and declare respective defendant’s documents invalid as well as make a public announcement thereof in the source prescribed by the legal acts. Upon the receipt of documents confirming the title to the shares (interest, contributions), the plaintiff shall pay the price into the deposit account of a notary, bank or other credit institution.
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3.In the event that there are some plaintiffs, shares (interest, contributions) sold in forced manner shall be allotted as proportionally as possible to the legal person’s shares (interest, contributions) held by the plaintiffs.
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Article 2.121The Procedure for Forced Selling of Shares in the Presence of a Prior Right
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1.Where other members or persons of a legal person have a prior right to acquire the shares (interest, contributions) sold in forced manner, a legal person, upon the receipt of a res judicata court order on the setting of a price, must make a proposal to the said persons to purchase shares (interest, contributions) for the price fixed by the court. After the court judgement on the forced sale of shares (interest, contributions) has become res judicata , the defendant shall have to notify a legal person about the persons who enjoy the prior right to acquire shares (interest, contributions) sold in forced manner in accordance with the contracts concluded by the plaintiff.
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2.Upon the receipt of legal person’s proposal to exercise the prior right, the persons shall have, within thirty days, in writing, to accept or reject the proposal. Where a person fails to reply to the said proposal, the proposal shall be deemed unaccepted.
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3.Upon the expiry of a thirty-day time limit, a legal person shall have to notify the plaintiff and the defendant of how many shares (interest, contributions) have been accepted. Upon the receipt of the said notification, the defendant shall have to transfer title to the shares to persons specified in the notification and the remainder of them, in accordance with the provisions of Article 2.120 of the given Code, to the plaintiff. Shareholders who purchase shares (interest, contributions) shall have to make payments for them in accordance with the provisions of Article 2.120 of the given Code. Where the persons enjoying the prior right fail to make timely payments for shares (interest, contributions), shares (interest, contributions) shall be transferred to the plaintiff.