1.A company may, if the Articles of Association of the company so prescribe, issue ordinary shares having the status of employee shares. This issue may not be made before the expiry of the deadline of payment for the shares subscribed for at the time of incorporation of the company.
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2.The right to acquire employee shares shall be vested in the employees of the company which has issued these shares, except for the employees who serve on the Supervisory Board or the Board or hold the office of the company manager.
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3.The share subscription agreement must set a time limit for the holder of employee shares within which he may divest of the shares only to another employee of the company. This restriction may not exceed three years from the day of subscription for shares. After the expiry of the restriction period for the transfer of shares, employee shares shall become ordinary shares. If the employee shares are inherited, the status of these shares shall not change until the expiry of the restriction period for the transfer of shares.
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4.An employee must pay for subscribed shares by making initial contributions in cash within a time limit laid down in the share subscription agreement. The remaining payments may be made through deductions from the earnings if desired so by the employee. It shall be prohibited to exert any pressure on the employee to purchase the shares of the company as well as to make deductions from earnings for payment of the shares which have not been subscribed for by him.
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5.An employee must pay for the subscribed employee shares before the expiry of the restriction period for the transfer of shares.
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Article 44Subscription for Shares
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1.Shares shall be subscribed for when a company and a natural or legal person conclude a share subscription agreement, with the exception of incorporation of the company. Under the share subscription agreement, one party shall undertake to offer a certain number of new shares and the other party shall undertake to pay the entire subscription price. The procedure of subscription for the shares of public limited liability companies issued in the course of the increase of the authorised capital and distributed by technical means of the operator of a regulated market as well as the procedures of pricing and payment shall be established by the Securities Commission.
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2.A share subscription agreement shall also have a simple written form in cases when the full or partial payment of the subscription price is made by a contribution other than in cash, i.e. the real estate.
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3.A share subscription agreement must state:
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1)the name, legal form, code and registered office of the company;
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2)the registered amount of the authorised capital;
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3)the amount of increase in the authorised capital;
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4)the date of the General Meeting of Shareholders which adopted the decision on increase of the authorised capital;
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5)the date and number of a certificate of approval of a public limited liability company’s shares prospectus if the prospectus must be approved in accordance with the procedure laid down by the legal acts regulating the securities market;
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6)the nominal value and issue price of a share, the number of shares of each class issued and the rights they carry;
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7)the procedure for and time limits of payment for shares;
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8)the procedure for allotting shares to the subscribers of shares in the event of oversubscription;
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9)the possibility and procedure of increasing the authorised capital of the company in the event of undersubscription;
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10)the full name, personal number and place of residence of a subscriber who is a natural person or the name, legal form, code and registered office of a legal person and the name and surname of its representative;
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11)the number of subscribed shares according to their classes.
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4.The company manager shall be responsible for drafting the share subscription agreement and the accuracy of the particulars.
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5.If a company provides in the share subscription agreement incorrect or incomplete particulars referred to in paragraph 3 of this Article, the subscriber of a share shall be entitled to file a written request to return his contribution for the subscribed shares before the registration of the Articles of Association of the company amended as the result of the increase in the authorised capital. The company must return the subscriber’s contribution immediately without any deductions.
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6.A company may not subscribe for own shares.
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7.A subsidiary company may not subscribe for and acquire shares in a parent company. If the shares of a company are subscribed for by its subsidiary company, the shares shall be considered to have been subscribed by the company itself.
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8.Members of the company’s organ who have adopted a decision for the company to subscribe for own shares or for shares in its parent company must pay for these shares themselves. Upon payment for the shares, they shall become the owners thereof.
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9.A company may not make direct or indirect advance payments, give loans or offer security for the discharge of obligations to third parties if such actions aim at enabling other persons to acquire shares in that company.
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10.The company manager shall be responsible for compliance with the terms referred to in paragraphs 8 and 9 of this Article.
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Article 45Payment for Shares
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1.Payment for shares shall mean payment of the share issue price. Payment for shares may be made in cash and/or contributions other than in cash owned by the person paying for the shares. In the case specified in paragraph 5 of Article 52 of this Law, the newly issued shares must be paid for in cash.
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2.The issue price of a share may not be less than its nominal value.
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3.Contributions other than in cash may be assets, including property rights. The assets withdrawn from civil circulation as well as works and services may not be used as contributions other than in cash.
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4.The initial contribution in cash of each subscriber for shares must be at least 1/4 of the aggregate amount of the nominal value of all the shares subscribed for and the share premium thereof. The remaining amount for the subscribed shares may be paid both in cash and by contributions other than in cash 5. If, in the case of increase of a company’s authorised capital, shares are fully or partially paid for by a contribution other than in cash, the contribution must be evaluated by an independent property valuer according to the procedure laid down by the legal acts regulating asset valuation. The requirements applicable to the asset valuation report shall be set forth in paragraph 8 of Article 8 of this Law. The asset valuation report must be submitted to the company before subscription for the shares. The asset valuation report must be submitted to the manager of the Register of Legal Entities together with other statutory documents for the registration of the Articles of Association amended as the result of the increase of the authorised capital.
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6.A decision of the General Meeting of Shareholders on the increase of the authorised capital must indicate, inter alia, every person who pays for the shares by a contribution other than in cash (the full name, personal number and place of residence of a natural person; the name, legal form, code and registered office of a legal person), the nominal value and issue price of the shares which are paid for by a contribution other than in cash.
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7.The sum of the nominal values of the shares which are paid up for by a contribution other than in cash may not exceed the value of a contribution other than in cash indicated in the asset valuation report.
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8.The shares issued by a company must be fully paid up within the time limit laid down in the share subscription agreement. This time limit may not exceed 12 months from the conclusion of the share subscription agreement.
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9.If the entire share subscription price is paid up by contributions other than in cash in the case of increase of the authorised capital, the entire contribution other than in cash must be transferred to the company within the time limit set for payment of initial contributions.
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10.Shares shall be deemed to have been paid up when a subscriber pays the last contribution in cash or transfers the entire contribution other than in cash referred to in the share subscription agreement (the last portion of the contribution other than in cash) into the ownership of the company.
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11.A company may not release a subscriber from his obligations to the company to pay for the shares subscribed for, except in the cases specified in paragraph 12 of Article 73 of this Law.
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12.If a subscriber fails to pay for the shares within the time limit set in the share subscription agreement, it shall be deemed that the company itself acquired the shares and that the share subscription agreement entered into with that person is void; the contributions for the shares subscribed for shall not be returned. The company must, within 12 months after the expiry of the time period laid down for share subscription, divest of the shares to other persons or reduce the authorised capital by cancelling the shares.
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Article 451Specifics of Payment for Shares Otherwise than in Cash when Increasing the Company’s Authorised Capital
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1.It shall be possible not to comply with the requirements for assessing the contributions paid otherwise than in cash as established in paragraph 5 of Article 45 of this Law if the shares are fully or partly paid up when increasing a company’s authorised capital:
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1)by transferable securities or by money market instruments, where such transferable securities or money market instruments are traded on one or several markets considered as regulated under the Law on Markets in Financial Instruments and operate in the Republic of Lithuania or another European Union Member State, also in a state of the European Economic Area. The value of such transferable securities or money market instruments shall be their average weighted market price within 6 months prior the day of payment by such contributions made otherwise than in cash;
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2)by a contribution made otherwise than in cash, except for the transferable securities or money market instruments, the value whereof has already been established by the independent asset valuer and if the evaluation of the contribution made otherwise than in cash has been performed according to the procedure laid down by the legal acts regulating asset valuation and the value of the contribution made otherwise than in cash has been established not earlier than 6 months prior to the day of payment by the contribution other than in cash.
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2.A decision on the payment for shares by the contributions made otherwise than in cash in derogation of the requirements for evaluating a contribution made otherwise than in cash as prescribed by paragraph 5 of Article 45 of this Law shall be adopted by the Board of the Company (if the Board is not formed, by the company manager).
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3.On the initiative of the Company Board (if the Board is not formed, the company manager), a contribution made otherwise than in cash must be evaluated by the independent asset valuer according to the procedure laid down by the legal acts regulating asset valuation and the asset valuation report must be prepared according to the requirements prescribed in paragraph 8 of Article 8 of this Law if:
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1)the valuation of the transferable securities or money market instruments specified in subparagraph 1 of paragraph 1 of this Article has been influenced by exceptional circumstances which, prior to the day of payment by the contributions made otherwise than in cash and on the day of payment by the contributions made otherwise than in cash, would substantially alter the value of such a contribution made otherwise than in cash, including the cases when the transferable securities or money market instruments became illiquid;
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2)new important circumstances have emerged, which, prior to the day of payment by a contribution made otherwise than in cash and on the day of payment by the contribution made otherwise than in cash, would substantially alter the value of the contribution made otherwise than in cash established in the manner specified in subparagraph 2 of paragraph 1 of this Article.
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4.Without performing the valuation of a contribution made otherwise than in cash in the case specified in subparagraph 2 of paragraph 3 of this Article, one or more shareholders who, on the day of a decision on the increase of the authorised capital by the General Meeting of Shareholders (in a public limited liability company – at the close of the accounting day of the Meeting), hold at least 5% of the company‘s shares may demand the contribution made otherwise than in cash be evaluated by the independent asset valuer according to the procedure prescribed by the legal acts regulating asset valuation and the asset valuation report be drawn up according to the requirements specified in paragraph 8 of Article 8 of this Law. Such a shareholder or shareholders may lodge a claim prior to the day of payment by the contribution made otherwise than in cash if on the day of lodging the claim such a shareholder or shareholders still holds at least 5% of the company’s shares.
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5.If payment by a contribution made otherwise than in cash is effected in derogation of the requirements for evaluating a contribution made otherwise than in case as set forth in paragraph 5 of Article 45 of this Law, a statement must be drawn up within 10 days from effecting payment by the contribution made otherwise than in cash. The statement shall indicate the following:
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1)the number of the shares paid up by a contribution made otherwise than in cash, their nominal value, the description of each element of the assessed asset and the person who pays for the shares by the contribution made otherwise than in cash (the full name, personal number and place of residence of a natural person; the name, legal form, code number and the registered office of the legal person);
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2)the value of the contribution made otherwise than in cash, the source of establishing the value and, when the shares are paid up in part or fully by a contribution made otherwise than in cash the value whereof has been established in the manner specified in subparagraph 2 of paragraph 1 of this Article, the method of establishment of the value;
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3)the conclusion whether or not the established value of the contribution other than cash corresponds to the number of shares to be issued for this contribution according to the sum of their nominal value and share premium (the amount above the shares’ nominal value);
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4)the conclusion that there have not arisen any exceptional circumstances or new important circumstances relating to the primary establishment of the value of the contribution made otherwise than in cash.
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6.In the cases specified in paragraph 1 of this Article, the contribution made otherwise than in cash must be transferred to the company within the time limit for payment of initial contributions.
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7.The asset valuation report specified in subparagraph 2 of paragraph 1, paragraphs 3 and 4 of this Article must, together with other statutory documents for the registration of the company’s Articles of Association amended as the result of the increase of the authorised capital, be submitted to the manager of the Register of Legal Entities. The statement referred to in paragraph 5 of this Article must be submitted to the manager of the Register of Legal Entities within one month from the effecting of payment by a contribution made otherwise than in cash.
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8.The company manager shall be responsible for compliance with the provisions of this Article.
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Article 46Disposal of Shares
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1.Certificated shares or share certificates shall be disposed of by transfer into the ownership of other persons making a relevant entry on the share or on the share certificate, i.e. the endorsement. The endorsement shall contain the particulars of the person to whom the share or share certificate is disposed of (the full name, personal number of a natural person; the name, registered office, legal form, code of a legal person) as well as the date of such an entry. The endorsement shall be signed by the persons disposing of and acquiring the share or of the share certificate.
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2.The disposal of uncertificated shares shall be recorded by entries in personal securities accounts of the person who disposes of the shares and the person to whom the shares are disposed of.
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3.Having entered into a transaction on the disposal of uncertificated shares, the parties to the transaction must provide their account managers with a written agreement indicating, inter alia, the following:
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1)the name, legal form, code and registered office of the company the shares whereof are disposed of;
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2)the number of the shares disposed of according to their classes and their nominal value;
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3)in respect of shares of a public limited liability company, the share issue code assigned by the Central Securities Depository of Lithuania (if the public limited liability company whose shares are disposed of has issued shares of different issue);
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4)the amount of dividend on preference shares, voting and other rights.
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4.Any agreement which does not contain any of the particulars referred to in paragraph 3 of this Article shall be void from its conclusion, and the account managers shall not be entitled to make any entries thereunder.
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5.The requirements laid down in paragraphs 3 and 4 of this Article shall not apply to the share disposal agreements concluded on a regulated market.
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6.A person who subscribed for the shares before the registration in the Register of Legal Entities of the incorporation of a company or of the amendments to the Articles of Association as the result of the increase in the authorised capital may not transfer his shares to other persons.
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7.A shareholder may not transfer his partly paid up shares to other persons.
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8.A public limited liability company may not restrict the shareholders’ right to dispose of fully paid-up shares to another person according to the procedure laid down in this Law or other legal acts, except where the restriction period for the disposal of employee shares has not yet expired.
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Article 47Specifics of Disposal of Shares in Private Limited Liability Companies
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1.A shareholder must give a written notice to a private limited liability company of his intention to sell all or a part of the shares in a private limited liability company and indicate the number of shares being disposed of according to their classes and sale price.
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2.The right of pre-emption to acquire all the shares offered for sale in a private limited liability company shall be vested in the shareholders who, on the day of receipt of the shareholder’s notice of his intention to sell shares by a private limited liability company, held shares in the company, unless the Articles of Association provide otherwise.
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3.Within 5 days after the day of receipt of the shareholder’s notice of his intention to sell the shares, the manager of a private limited liability company must inform each shareholder of the company against a written acknowledgement of receipt or by a notice sent by registered mail indicating the number of shares offered for sale according to their classes, the proposed sale price and the time limit for the shareholder to notify the company of his wish to purchase the shares offered for sale. The time limit may not be less than 14 days and more than 30 days after the day of dispatch of the notice or the letter of the company.
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4.Within 45 days after the day of receipt of the shareholder’s notice of his intention to sell the shares, the company manager must notify the shareholder of the wish of other shareholders to buy all of his shares offered for sale.
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5.If one or more shareholders of a private limited liability company expressed their wish to purchase all shares of the private limited liability company offered for sale by the shareholder, the shareholder must sell these shares to the shareholders (one or more) who have expressed the wish, while the shareholders who have expressed the wish must purchase all these shares at the price not lower than that indicated in the notice, effecting the payment within 3 months from the day of receipt by the company of the notice of the intention to sell the shares, unless otherwise agreed upon with the shareholder selling the shares. The seller of the shares shall be entitled to require the buyer to furnish adequate security of the payment of the price of shares (bank guarantee, collateral, etc.).
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6.If the demand of shares offered for sale exceeds their supply, the shares shall be allotted to the shareholders wishing to acquire new shares in proportion to the number of shares held by them.
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7.If, within the time limits laid down in this Article, the manager of a private limited liability company informs the shareholder that other shareholders do not wish to acquire all the shares offered for sale or fails to inform, the shareholder shall be entitled to sell the shares at his own discretion at the price not lower than that indicated in his notice of the intention to sell the shares.
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8.If shares in a private limited liability company are disposed of in any other statutory manner (other than by selling) or under the court decision, this Article shall not apply; however, in any case of share transfer, the number of shareholders in a private limited liability company may not exceed the number laid down in paragraph 4 of Article 2 of this Law.
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Article 48Invalidity and Replacement of the Shares Issued by the Company
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1.The shares shall be invalid and shall not grant any property and non-property rights to their holders in the case of offering for secondary trading and acquisition of partly paid up shares of a company.
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2.In the event of a change in the particulars indicated on a certificated share or a share certificate, a private limited liability company must replace the certificated shares or the share certificates held by the shareholders, except where the particulars of the holder change because of the disposal of the certificated share or the share certificate and are entered in the endorsement. A private limited liability company must immediately notify the shareholder of the replacement of certificated shares or share certificates against a written acknowledgement of receipt or by registered mail. A replaced share or share certificate shall be valid until new shares or share certificates are issued to shareholders, but not longer than for 3 months from the day of receipt of the notice. The new shares and share certificates shall remain in the custody of the private limited liability company until they are collected.
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3.At the request of a shareholder, a private limited liability company must replace a damaged certificated share or a share certificate which is not suitable for trading, if the share or share certificate is identifiable.
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4.The certificated shares or share certificates which have been lost, destroyed or are otherwise missing shall be replaced by a private limited liability company with other certificated shares or share certificates.
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5.A notice of the certificated shares or share certificates which have not been returned to a private limited liability company within a prescribed time limit or of the certificated shares or share certificates which have been lost, destroyed or are otherwise missing must be published by the company manager in a daily indicated in the Articles of Association immediately after he learns or ought to have learnt about it. Such a notice must indicate the name and code of the private limited liability company and the number of the certificated share or the share certificate.
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Article 49Increase of the Authorised Capital
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1.The authorised capital shall be increased by a decision of the General Meeting of Shareholders. Where a company has issued shares of different classes, the decision to increase the authorised capital shall be adopted if approved by a separate vote of the holders of each class of shares whose rights are affected by the increase in the authorised capital. The approval of holders of non-voting preference shares shall also be necessary for the adoption of the decision to increase the authorised capital by additional contributions by issuing preference shares.
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2.The authorised capital shall be increased by issuing new shares or by increasing the nominal value of the issued shares.
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3.A company may increase the authorised capital only after its authorised capital has been fully paid up (at the price of the last share issue).
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4.A documentary proof of the decision to increase the authorised capital must be submitted to the manager of the Register of Legal Entities within 10 days from the adoption of the decision.
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5.The shareholders of the company shall have the right of pre-emption to acquire the shares issued by the company in proportion to the nominal value of the shares owned by them at the close of the day of the General Meeting of Shareholders which adopted the decision to increase the authorised capital by additional contributions, save for the exceptions laid down in Article 57 of this Law. If the authorised capital of a company which has different classes of shares is increased by issuing the shares of one class, the holders of shares of another class shall acquire the right of pre-emption to acquire the shares issued by the company after this right has been exercised by the shareholders who hold the shares of the same class as the newly issued shares.
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6.When not all the shares are subscribed for within the period intended for share subscription, the authorised capital may be increased by the amount of nominal values of the shares subscribed for if the decision of the General Meeting of Shareholders which adopted the decision to increase the authorised capital provides for such an option. On the basis of this decision, the Board of the company (if the Board is not formed, the company manager) must make relevant amendments to the Articles of Association of the company relating to the amount of the authorised capital and the number of shares and/or their nominal value and submit the amended Articles of Association to the manager of the Register of Legal Entities.
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7.The authorised capital shall be deemed to have been increased only after the amended Articles of Association of a company are registered in the Register of Legal Entities. A decision of the General Meeting of Shareholders to increase the authorised capital, except for the decision to issue convertible debentures, shall be deemed to be void in the event of a failure to submit the amended Articles of Association of the company to the manager of the Register of Legal Entities within 6 months from the day of the General Meeting of Shareholders which adopted the decision to increase the authorised capital. If this time limit is not met, the contributions for the shares subscribed for must be immediately returned without any deductions at the written request of the subscriber.
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8.Upon registration in the Register of Legal Entities of the Articles of Association amended as the result of the increase of the authorised capital, the manager of a private limited liability company must, according to the procedure laid down in the Articles of Association, notify all the shareholders of the procedure for collecting new certificated shares or share certificates. The shares shall remain in the custody of the company until they are collected. If the shares are uncertificated shares, new shares shall be recorded as entries in personal securities accounts of shareholders.
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Article 50Increase of the Authorised Capital by Additional Contributions
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1.The authorised capital shall be increased by additional contributions of shareholders and other persons only by issuing new shares.
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2.An insolvent public limited liability company may increase its authorised capital by additional contributions only if the new shares are acquired by its shareholders, employees and creditors.
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3.The authorised capital of a company which has issued convertible debentures shall be increased by issuing new shares of the class and nominal value referred to in the decision to issue the convertible debentures to be exchanged for the convertible debentures if the holder thereof filed a written application to exchange the debentures for shares within the time limit laid down in the decision to issue the convertible debentures. Shares shall be granted in exchange for convertible debentures upon the expiry of the time limit laid down in the decision of the General Meeting of Shareholders to issue convertible debentures. Upon the expiry of the time limit laid down in the decision of the General Meeting of Shareholders to issue convertible debentures and upon filing by the debenture holders of written applications to exchange these debentures for shares, the Board of the company (if the Board is not formed, the company manager) must make relevant amendments to the amount of the authorised capital and the number of shares in the Articles of Association of the company and submit the amended Articles of Association to the manager of the Register of Legal Entities. In this case, the payment for the convertible debentures shall be considered to be the payment for the shares for which the debentures have been exchanged..
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4.The Articles of Association of the company amended as the result of the increase of the authorised capital by additional contributions shall be registered in the Register of Legal Entities following subscription for shares and payment of initial contributions.
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Article 51Increase of the Authorised Capital out of the Company’s Funds
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1.The authorised capital may be increased out of the company’s funds, i.e. the unappropriated profit, share premium or reserves (except for the reserve for own shares and the mandatory reserve). The authorised capital shall be increased out of the company’s funds by issuing new shares, which shall be transferred to the shareholders for no consideration or by increasing the nominal value of the previously issued shares.
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2.The General Meeting of Shareholders shall adopt a decision to increase the authorised capital out of the company’s funds on the basis of the set of financial statements of the company. If the decision of the General Meeting of Shareholders to increase the authorised capital is adopted not later than 6 months after the close of the financial year, the decision may be adopted on the basis of the set of annual financial statements. If the decision to increase the authorised capital is adopted 6 months after the close of the financial year, the General Meeting of Shareholders must be submitted the set of interim financial reports drawn up at least 3 months before the General Meeting of Shareholders. The set of interim financial reports must be submitted to the manager of the Register of Legal Entities together with the statutory documents required for the registration of the amended Articles of Association.
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3.If the balance sheet of a company shows losses, the authorised capital may be increased solely from the revaluation reserve.
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4.Where a company increases its authorised capital out of the company’s funds by issuing new shares, the shareholders, except for the case laid down in paragraph 3 of Article 42 of this Law, shall be entitled to receive new ordinary shares for no consideration, with the number of the shares to be in proportion to the nominal value of the shares owned by them at the close of the day of the General Meeting of Shareholders which adopted the decision to increase the authorised capital (in respect of a public limited liability company – at the close of the rights accounting day).
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Article 52Reduction of the Authorised Capital
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1.The authorised capital may be reduced by a decision of the General Meeting of Shareholders or, in the cases laid down in this Law, by the court decision. The decision of the General Meeting of Shareholders must indicate the purpose of the reduction of the authorised capital. The General Meeting of Shareholders of a company which has issued shares of different classes may adopt a decision to reduce the authorised capital where this decision is approved by a separate vote of the holders of the class of shares whose rights are affected by such reduction.
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2.The authorised capital may be reduced only for the following purposes:
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1)for the sole purpose of cancelling the losses recorded in the balance sheet of the company;
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2)for the purpose of cancelling the shares acquired by the company;
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3)for the purpose of payment of the company’s funds to the shareholders;
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4)for the purpose of correcting the mistakes made in the course of formation or increase of the authorised capital.
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3.The authorised capital may be reduced only in the following ways:
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1)by reducing the nominal value of shares;
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2)by cancelling the shares.
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4.The reduced authorised capital of a company may not be less than the minimum amount of the authorised capital set in Article 2 of this Law.
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5.Should the General Meeting of Shareholders adopt a decision to reduce the authorised capital for the sole purpose of cancelling the losses recorded in the balance sheet of a company, the decision to increase the authorised capital by additional contributions by issuing new shares may be adopted at the same General Meeting of Shareholders. If the authorised capital is increased to the amount held before the adoption of the decision to reduce the authorised capital or more, the provisions of Article 53 of this Law shall not apply.
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6.A decision to reduce the authorised capital for the purpose of payment of the company’s funds to the shareholders may be adopted only at the Annual General Meeting of Shareholders. The decision shall be adopted upon approval of the set of annual financial statements and appropriation of the company’s profit available for appropriation and solely in the case when all of the following conditions are met:
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1)the amount of the company’s mandatory reserve after the reduction of the authorised capital is not less than 1/10 of the authorised capital;
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2)there are no unappropriated losses and long-term liabilities in the company’s set of annual financial statements. The requirement regarding long-term liabilities shall not apply in the presence of a written consent of all the creditors in respect whereof the company has the long-term liabilities.
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7.A decision to reduce the authorised capital for the purpose of payment of the company’s funds to the shareholders may not be adopted if on the day of adoption of the decision the company is insolvent or if it would become insolvent upon paying the funds to the shareholders.
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8.Upon reduction of the authorised capital for the purpose of payment of the company’s funds to the shareholders, the shareholders shall be paid only in cash. Cash may be paid to the shareholders not earlier than after the registration of the amended Articles of Association of the company in the Register of Legal Entities and must be paid out within one month from the day of registration of the amended Articles of Association of the company. The right to receive the payments shall be vested in the persons who, at the close of the day of the General Meeting of Shareholders which adopted the decision to reduce the authorised capital (in the case of a public limited liability company – at the close of the rights accounting day), were shareholders of the company or have such a right on another lawful ground, and the amounts of the payments must be proportionate to the sum of nominal values of the shares held by them. The persons who did not receive the payments within the one-month period set in this paragraph shall have the right to enforce from the Company as its creditors the payment of the amounts due to them. A company may recover the payment made to a shareholder if the shareholder was aware or ought to have been aware that the payment had been allocated and/or made unlawfully.
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9.When reducing the authorised capital, a company must first cancel the shares which the company has issued and which have been acquired by the company itself or by its subsidiaries. The nominal value of the remaining shares or the number of shares shall be reduced for all the shareholders in proportion to the nominal value of shares owned by them at the close of the day of registration of the amended Articles of Association of the company in the Register of Legal Entities. After the registration of the amended Articles of Association of the company in the Register of Legal Entities, a public limited liability company must, within one working day, submit to the Central Securities Depository of Lithuania the documents required by the Depository for amending the entries in securities accounts.
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10.A documentary proof of the decision to reduce the authorised capital must be submitted to the manager of the Register of Legal Entities within 10 days after the adoption of the decision.
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11.The authorised capital shall be deemed to have been reduced only upon registration of the amended Articles of Association in the Register of Legal Entities. A decision of the General Meeting of Shareholders to reduce the authorised capital shall be deemed invalid if the amended Articles of Association of the company are not presented to the manager of the Register of Legal Entities within 6 months from the day of the General Meeting of Shareholders which adopted the decision to reduce the authorised capital, except in the case specified in paragraph 6 of Article 53 of this Law.
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Article 53Notifying of the Reduction of the Authorised Capital and Provision of Safeguards for the Discharge of Obligations
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1.Each creditor of a company must be notified against a written acknowledgement of receipt or by registered mail of a decision to reduce the authorised capital of the company. Moreover, the decision to reduce the authorised capital of the company must be published in the daily indicated in the Articles of Association or each shareholder must be notified thereof against a written acknowledgement of receipt or by registered mail.
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2.When reducing its authorised capital, a company must provide additional safeguards for the discharge of its obligations to each creditor who so requested, except for the cases laid down in paragraph 4 of this Article.
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3.Additional safeguards for the discharge of obligations may be requested by the creditor whose rights arose prior to and did not expire before the day of notification by the manager of the Register of Legal Entities of the decision adopted by the General Meeting of Shareholders or by the court to reduce the authorised capital of the company. The company’s creditor may file his claims with the company within 2 months after the day of notification by the manager of the Register of Legal Entities of the decision to reduce the authorised capital of the company.
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4.A company may refrain from providing additional safeguards for the discharge of obligations to its creditors if at least one of the following conditions is met:
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1)the total amount of the creditors’ claims does not exceed 1/2 of the amount of the equity capital after the reduction of the authorised capital. This condition shall not apply if the authorised capital is reduced for the purpose of payment of the company’s funds to the shareholders;
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2)the creditor’s claims are adequately secured by pledge, mortgage, surety or guarantee;
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3)the authorised capital is reduced for the sole purpose of cancelling the losses recorded in the balance sheet of the company.
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5.Disputes regarding the additional safeguards for the discharge of obligations in the event of reduction of a company’s authorised capital shall be settled by court.
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6.The Articles of Association of a company amended as the result of the reduction of the authorised capital shall be submitted to the manager of the Register of Legal Entities after all the actions referred to in paragraphs 1 and 2 of this Article have been carried out, but not earlier than 3 months after the notification by the manager of the Register of Legal Entities of the decision adopted by the General Meeting of Shareholders or by the court to reduce the authorised capital of the company and not later than within 6 months after the adoption of the decision to reduce the authorised capital, except for the case specified in paragraph 7 of this Article The Articles of Association of the company amended as the result of the reduction of the authorised capital may be submitted to the manager of the Register of Legal Entities in derogation of the 3-month time limit laid down in this paragraph where:
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1)the company has no liabilities to creditors and has published a notice of the reduction of the authorised capital as laid down in paragraph 1 of this Article;
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2)the authorised capital is reduced for the sole purpose of cancelling the losses recorded in the balance sheet of the company;
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3)the authorised capital is reduced for the purpose of correcting of the mistakes made in the course of formation or increase of the authorised capital.
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7.If a dispute regarding the additional safeguards for the discharge of obligations is being heard in court, the Articles of Association amended as the result of the reduction of the authorised capital may not be submitted to the manager of the Register of Legal Entities until the court decision becomes effective.
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8.If the amendments to the Articles of Association of a company as the result of the reduction of the authorised capital are registered in breach of the requirements of this Article as to the additional safeguards for the discharge of obligations to the creditors, the reduction of the authorised capital may be declared invalid by the court decision.
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Article 54Right of the Company to Acquire Own Shares
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1.A company shall have the right to acquire own shares according to the procedure laid down in this Article by acting on its own or through a person acting on his own behalf, but for the benefit of this company and for the account of the company. When acquiring own shares, the company must ensure equal opportunities for all shareholders to transfer to the company their shares.
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2.A company may acquire own shares by a decision of the General Meeting of Shareholders. The decision of the General Meeting of Shareholders must, inter alia, specify the following:
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1)the purpose of the acquisition of shares;
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2)the maximum number of the shares permitted for acquisition;
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3)the time limit within which the company may acquire own shares. The time limit may not exceed 18 months;
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4)the maximum and the minimum share acquisition price;
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5)the procedure for selling own shares and the minimum sale price. The procedure for selling the shares must ensure equal opportunities for all shareholders to acquire the shares of the company.
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3.The total nominal value of own shares being acquired by a company together with the nominal value of other own shares already held by the company may not exceed 1/10 of the authorised capital.
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4.A company may not purchase own shares if this would result in the equity capital falling below the aggregate amount of the paid-up authorised capital, mandatory reserve and reserve for own shares.
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5.A company shall be prohibited from acquiring partly paid up own shares, except for the case specified in paragraph 12 of Article 45 of this Law.
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6.A company may acquire own shares if the reserve for own shares is formed in the company and the amount thereof is not less than the aggregate amount of the acquisition values of the own shares being acquired.
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7.Having acquired own shares, a company may not exercise the property and non-property rights attached to the shares as laid down in this Law.
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8.The acceptance of shares as a safeguard for discharge of an obligation shall be equivalent to the acquisition of own shares.
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9.Where the shares of a company are subscribed for or acquired by its subsidiary company, the shares shall be deemed to have been subscribed for or acquired by the company whose shares are subscribed for or acquired.
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10.Where the shares of a company are subscribed for or acquired by a person acting on his own behalf, but for the benefit of this company and for the account of the company, the shares shall be deemed to have been subscribed for or acquired by the company whose shares are subscribed for or acquired.
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11.The shares of a company acquired in violation of the conditions referred to in paragraphs 2, 3, 4 and 6 of this Article must be disposed of into ownership of other persons within 12 months from the acquisition thereof. If the shares are not disposed of within this time limit, the authorised capital must be reduced accordingly, the shares must be cancelled and declared invalid.
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12.If a company fails to declare the shares invalid and fails to cancel them as referred to in paragraph 11 of this Article, the shares shall be recognised as invalid and the authorised capital shall be reduced accordingly by a court’s decision. The right to refer to court shall be vested in the company manager, the Board, a shareholder and a creditor.
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13.If a court passes a decision on the reduction of the authorised capital of a company, the Board of the company (if the Board is not formed, the company manager) must make relevant amendments to the Articles of Association of the company changing the amount of the authorised capital and the number of shares and accordingly cancelling the company’s own shares. The amended Articles of Association of the company must be submitted to the manager of the Register of Legal Entities within 30 days after the court’s decision becomes effective.
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14.The company manager shall be responsible for compliance with the conditions referred to in paragraphs 3, 4, 5, 6, 7 and 11 of this Article.
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Article 55Debentures
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1.A debenture of a company shall be a fixed-term non equity security under which the company which is the issuer of the debenture becomes the debtor of the debenture holder and assumes obligations for the benefit of the debenture holder. These obligations must be indicated in the decision to issue debentures and in the debenture subscription agreement.
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2.A decision of the General Meeting of Shareholders to issue debentures and the debenture subscription agreement must indicate the nominal value of the debenture, the rate of annual interest, the fixed date of debenture redemption from which the debenture holder shall acquire the right to receive from the company the amount of funds made up of the nominal value of the debenture and the annual interest.
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3.The debentures of one and the same issue shall grant their holders equal rights.
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4.A decision to issue debentures shall be taken by the General Meeting of Shareholders by a simple majority of votes. The Articles of Association may provide that the decision to issue debentures shall be adopted the Board (if the Board is not formed, the company manager). The decision to issue convertible debentures shall be adopted according to the procedure laid down in Article 56 of this Law.
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5.The debenture holder shall have the same rights as other creditors of the company.
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6.Before issuing debentures offered for public trading, a public limited liability company must conclude an agreement with an intermediary of public trading in securities. Under the agreement, the intermediary of public trading in securities shall undertake to safeguard the interests of the holders of a certain debenture issue in their relations with the public limited liability company and the public limited liability company shall undertake to pay remuneration thereto. The intermediary of public trading in securities must safeguard the rights and legitimate interests of the debenture holders in the same way as he would safeguard his own rights and legitimate interests if he were the holder of all issued debentures. The intermediary of public trading in securities shall have the right to apply to court for the safeguarding of the rights of debenture holders.
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7.Holders of over 1/2 of the debentures of a single specific issue shall have the right to:
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1)dismiss the intermediary of public trading in securities safeguarding their interests and demand that the public limited liability company conclude an agreement with the intermediary of public trading in securities of their choice;
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2)bring to the notice of the intermediary of public trading in securities safeguarding their interests that the violation committed by the public limited liability company in relation to the specific issue of debentures offered for public trading is not material and therefore certain actions are not needed to safeguard their interests (this provision shall not apply to the violations committed by the public limited liability company in relation to the debenture redemption and the payment of interest).
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8.Where the debentures issued by a public limited liability company are secured by pledge of assets or mortgage, the intermediary of public trading in securities shall exercise the rights of the holder of security for the benefit of all debenture holders. Third parties may offer, either directly to the debenture holder or through the intermediary of public trading in securities, a surety or guarantee for the discharge of obligations of a public limited liability company arising out of the issue of debentures. In the event of a failure to discharge all or a part of these obligations, the intermediary of public trading in securities must transfer the funds received from the third parties to the debenture holders.
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9.If the debenture holder or the intermediary of public trading in securities managing his securities accounts does not claim the redemption of the debenture within 3 years after the redemption date indicated in the debenture subscription agreement, the debenture holder shall forfeit the right of claim.
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10.Debentures shall be book-entry and shall be represented by entries in personal securities accounts of their holders. The requirements laid down for uncertificated shares shall apply to the accounting of debentures and trading in debentures.
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11.Private limited liability companies shall be prohibited from offering debentures for public trading.
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Article 56Convertible Debentures
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1.A company may issue convertible debentures which, after the expiry of their redemption period, may be exchanged for the shares of the company.
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2.A decision to issue convertible debentures shall be adopted by the General Meeting of Shareholders. Where there are several classes of shares in a company, the decision to issue convertible debentures shall be adopted if approved by a separate vote of the shareholders of each class. If the decision to issue convertible debentures indicates that the convertible debentures issued may be converted into preference shares, the decision shall also be subject to approval of the holders of non-voting preference shares adopted by a separate vote of the holders of these shares.
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3.A decision of the General Meeting of Shareholders to issue convertible debentures shall at the same time be a decision to increase the authorised capital of the company by the amount equal to the sum of the nominal values of shares which may be exchanged for the convertible debentures.
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4.A decision to issue convertible debentures and the debenture subscription agreement must, inter alia, indicate the following:
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1)the nominal value of convertible debentures and the rights attached thereto;
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2)the class, number and the nominal value of shares for which the convertible debentures shall be exchanged as well as the rights attached thereto;
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3)the ratio at which convertible debentures shall be exchanged for shares. This ratio must be such that the issue price of the convertible debentures would be not less than the nominal value of shares for which they are exchanged;
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4)the period during which the convertible debentures shall be exchanged for shares;
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5)the interest and the procedure of payment thereof;
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6)the date of redemption of the debentures.
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5.A company with partly paid-up authorised capital shall not have the right to issue convertible debentures.
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6.The shareholders of a company shall have the right of pre-emption to acquire the convertible debentures issued by the company in proportion to the nominal value of the shares owned by them at the close of the day of the General Meeting of Shareholders which adopted the decision to issue the convertible debentures (in respect of a public limited liability company – at the close of the rights accounting day), save for the exceptions laid down in Article 57 of this Law.
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7.A documentary proof of the decision to issue convertible debentures must be submitted to the manager of the Register of Legal Entities within 10 days from the adoption thereof.
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Article 57Acquisition by the Right of Pre-emption of the Shares or Convertible Debentures Issued by a Company
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1.A notice of the offer to acquire by the right of pre-emption the shares or convertible debentures of a public limited liability company and the time limit for exercising the right of pre-emption must be published in the daily indicated in the Articles of Association. The notice must be submitted to the manager of the Register of Legal Entities not later than on the first day of its publication in the daily referred to in the Articles of Association.
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2.A notice of the offer to acquire by the right of pre-emption the shares or convertible debentures of a private limited liability company and the time limit for exercising the right of pre-emption must be published in the daily indicated in the Articles of Association or each shareholder must be notified thereof against a written acknowledgement of receipt or by registered mail. The notice must be submitted to the manager of the Register of Legal Entities not later than on the first day of publication in the daily referred to in the Articles of Association or delivery of the notice or dispatch of the registered letter.
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3.The time limit set by the General Meeting of Shareholders for a shareholder to acquire shares or convertible debentures by the right of pre-emption may not be less than 14 days from the day of the publication by the manager of the Register of Legal Entities or from the day of the delivery of the notice or the dispatch of the registered letter to the shareholder of a private limited liability company.
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4.Shareholders of a public limited liability company shall be entitled to dispose of their right of pre-emption to acquire the shares or convertible debentures issued by the public limited liability company to other persons according to the procedure laid down by the Securities Commission.
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5.The shareholders’ right of pre-emption to acquire the shares or convertible debentures issued by a company may be withdrawn by a decision of the General Meeting of Shareholders. The General Meeting of Shareholders may adopt such a decision only if the person or persons (including the shareholders) who are entitled to acquire the shares or convertible debentures of the company are known to the General Meeting of Shareholders, except for the cases when the right of pre-emption to acquire shares or convertible debentures in the company is withdrawn as the result of the intention to publicly offer the shares or convertible debentures according to the procedure established in the Law on Securities. The decision of the General Meeting of Shareholders to withdraw the right of pre-emption must, inter alia, indicate the following:
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1)the reasons for withdrawing the right of pre-emption;
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2)the person or persons who are granted the right to acquire the shares or convertible debentures (the full name, personal number and place of residence of a natural person; the name, legal form, code and registered office of a legal person);
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3)the number of the shares or convertible debentures issued which may be acquired by each of the above persons (where such data must be specified as prescribed by the conditions set in this paragraph).
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6.The Board of the company (if the Board is not formed, the company manager) must submit a written notice to the General Meeting of Shareholders which is supposed to discuss the withdrawal of the right of pre-emption. The notice must indicate the following:
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1)the reasons for withdrawing the right of pre-emption;
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2)substantiation of the proposed issue price of the shares or convertible debentures issued;
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3)the person or persons to whom it is proposed to grant the right to acquire the shares or convertible debentures (the full name, personal number and place of residence of a natural person; the name, legal form, code and registered office of a legal person and the full name, personal number and place of residence of its representative) and the number of the shares or convertible debentures issued which may be acquired by each of the above persons (where such data must be specified as prescribed by the conditions set in paragraph 5 of this Article).
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7.The right of pre-emption to acquire the shares or convertible debentures issued by a company may only be withdrawn for all shareholders of the company.
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8.A decision to withdraw the right of pre-emption must be submitted to the manager of the Register of Legal Entities within 10 days.
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CHAPTER SEVEN THE COMPANY’S FINANCIAL STATEMENTS AND APPROPRIATION OF PROFIT
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Article 58Set of the Company’s Financial Statements
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1.The drawing up of the set of a company’s financial statements and the drafting of the annual report of the company shall be established by laws ad other legal acts.
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2.The set of annual financial statements of a company shall be approved by the Annual General Meeting of Shareholders. If the audit of the company’s annual financial statements is mandatory under laws or provided for in the Articles of Association, only the audited set of annual financial statements shall be approved.
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3.The set of annual financial statements of a company together with the annual report of the company and the auditor’s report (where the audit is mandatory under laws or provided for in the Articles of Association) must be submitted to the manager of the Register of Legal Entities within 30 days after the Annual General Meeting of Shareholders.
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4.If, under laws, a company must draw up a set of consolidated annual financial statements and the consolidated annual report, the provisions of this Law concerning the set of a company’s annual financial statements and the annual report shall apply mutatis mutandis to such a set of financial statements and such an annual report.
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Article 59Appropriation of Profit (Loss)
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1.Upon approval of the set of annual financial statements, the Annual General Meeting of Shareholders must appropriate the profit (loss) of the company available for appropriation.
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2.A decision of the General Meeting of Shareholders on appropriation of profit (loss) must indicate:
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1)the unappropriated profit (loss) of the preceding financial year at the close of the reporting financial year;
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2)the net profit (loss) of the reporting financial year;
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3)the profit (loss) of the reporting financial year not recognised in the profit (loss) account;
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4)transfers from the reserves;
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5)the shareholders’ contributions to cover the losses of the company (if the shareholders resolve to cover all or a part of the losses);
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6)the total profit (loss) available for appropriation;
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7)the share of profit allocated to the mandatory reserve;
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8)the share of profit allocated to the reserve for acquiring own shares;
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9)the share of profit allocated to other reserves;
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10)the share of profit for the payment of dividends;
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11)the share of profit for the payment of annual bonuses to members of the Board and the Supervisory Board, payment of incentives to employees and other allocations;
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12)unappropriated profit (loss) at the close of the reporting financial year and brought forward to the next financial year.
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3.A company’s profit (loss) available for appropriation shall comprise the aggregate amount of the profit (loss) of the reporting financial year and the unappropriated profit (loss) for the previous financial year at the close of the reporting financial year, transfers from reserves and the shareholders’ contributions to cover the losses.
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4.If the aggregate of the amounts referred to in paragraph 3 of this Article is positive, the General Meeting of Shareholders must appropriate the profit available for appropriation according to the procedure laid down in this Article.
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5.If the mandatory reserve is less than 1/10 of the authorised capital, deductions to this reserve shall be compulsory and may not be less than 1/20 of the net profit of the reporting financial year until the amount of the mandatory reserve reaches the amount laid down in this Law.
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6.A company may allocate not more than 1/5 of the net profit of the reporting financial year for the purposes referred to in subparagraph 11 of paragraph 2 of this Article.
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7.If a company fails to pay the statutory taxes within the established time limits, it may not pay the dividend, annual bonuses to members of he Board and the Supervisory Board and incentives to its employees. It shall be prohibited to pay the bonuses to the members of the Supervisory Board and the Board in advance.
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8.If the aggregate amount of the unappropriated profit (loss) for the previous financial year at the close of the reporting financial year and the profit (loss) of the reporting financial year is negative, i.e. losses are incurred, the General Meeting of Shareholders must adopt a decision to cover these losses by crediting the amounts transferred to the profit (loss) available for appropriation in the following sequence:
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1)the amounts transferred from the reserves unused during the reporting financial year;
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2)the amounts transferred from the mandatory reserve;
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3)the amounts transferred from the share premium.
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9.Should the transferred amounts laid down in paragraph 8 of this Article be insufficient to cover the losses:
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1)the remaining unappropriated loss shall be brought forward to the next financial year if the equity capital of the company is at least 1/2 of the amount of the authorised capital indicated in the Articles of Association;
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2)the shareholders may cover the losses by shareholders’ contributions and the equity capital of the company must be restored in such a manner that it would be not less than 1/2 of the authorised capital indicated in the Articles of Association.
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10.Where the General Meeting of Shareholders fails to adopt a decision to cover the losses by shareholders’ contributions or where such a decision is adopted, but the equity capital is not restored to the amount equal to 1/2 of the authorised capital indicated in the Articles of Association, the General Meeting of Shareholders must decide on:
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1)the reduction of the authorised capital; however, the reduced authorised capital may not be less than the minimum amount of the authorised capital laid down in Article 2 of this Law, or
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2)the transformation into a legal person provided for in Article 72 of this Law, or
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3)the liquidation of the company.
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Article 60Dividends
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1.The dividend shall be a share of profit allocated to a shareholder in proportion to the nominal value of the shares owned by him. If a share is not fully paid-up and the time limit for the payment has not expired yet, the dividend of the shareholder shall be reduced in proportion to the amount of the unpaid share price. If the share is not fully paid-up and the time limit for the payment has expired, no dividend shall be paid. The Articles of Association may establish that the dividend on fully paid-up shares shall be reduced if the last payment was made in the financial year for which the dividend is allocated.
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2.Dividends allocated by a decision of the General Meeting of Shareholders shall be the liability of the company to its shareholders. A shareholder shall have the right to claim the payment of dividend as the creditor of the company. The company shall have the right to recover the dividend paid out to the shareholder if the shareholder was aware or ought to have been aware that the dividend was allocated and/or paid unlawfully.
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3.The General Meeting of Shareholders may not adopt a decision to allocate and pay dividends if at least one of the following conditions is met:
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1)the company is insolvent or would become insolvent upon payment of dividends;
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2)the aggregate amount of profit (loss) of the reporting financial year available for appropriation is negative (losses have been incurred);
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3)the equity capital of the company is lower or upon payment of dividends would become lower than the aggregate amount of the authorised capital of the company, the mandatory reserve, the revaluation reserve and the reserve for own shares of a company.
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4.A company must pay the allocated dividends within one month from the day of adoption of a decision on profit appropriation. Payment of dividends in advance shall be prohibited.
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5.A company shall pay the dividends in cash.
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6.The persons who were the shareholders of a company at the close of the day when the General Meeting of Shareholders declared the dividends or were entitled to receive the dividends on other legal grounds shall be entitled to the dividend.
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CHAPTER EIGHT REORGANIZATION, SPLIT-OFF, TRANSFORMATION AND LIQUIDATION OF THE COMPANY
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Article 61Reorganisation of the Company
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1.Companies shall be reorganised in the manner laid down in the Civil Code.
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2.A company may be reorganised or take part in the reorganisation only after its authorised capital has been fully paid up (at the price of the last share issue).
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Article 62Adoption of a Decision on the Reorganisation of a Company
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1.A decision on reorganisation shall be adopted by the General Meeting of Shareholders of every company being reorganised and the company involved in the reorganisation. Where the company has different classes of shares, the decision shall be adopted if approved by a separate vote of each class of shareholders (as well as the holders of non-voting shares).
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2.A decision on reorganisation may be adopted not earlier than 30 days after the publication of the prepared terms of reorganisation in the daily indicated in the Articles of Association.
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3.A decision on reorganisation must approve the terms of reorganisation and amend the Articles of Association of the continuing companies or adopt the Articles of Association of the new companies to be formed after the reorganisation.
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4.A documentary proof of the decision of the General Meeting of Shareholders to reorganise a company must, within five days, be submitted to the manager of the Register of Legal Entities.
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Article 63Terms of Reorganisation
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1.The Boards of the companies being reorganised and the companies involved in reorganisation (if the Boards are not formed, the company managers) must, subject to obtaining of the approval of the General Meeting of Shareholders, draw up the terms of reorganisation of the company indicating, inter alia, the following:
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1)the information concerning every company being reorganised and involved in the reorganisation as required under Article 2.44 of the Civil Code as well as the name, legal form and registered office of every new company formed after the reorganisation;
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2)the mode of reorganisation (merger by acquisition, merger by the formation of a new company, division by acquisition, division by the formation of a new company);
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3)the companies wound up after the reorganisation and the companies continuing after the reorganisation;
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4)the exchange ratio of shares of the companies wound up after the reorganisation for the shares of the companies continuing after the reorganisation and the substantiation thereof, the number of shares of the companies continuing after the reorganisation according to their classes and their nominal value as well as the rules of share allocation to the shareholders;
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5)the procedure for and time limits of the issue of shares to the shareholders of the companies continuing after the reorganisation;
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6)the price difference, paid out in cash, between the shares held by the shareholders and the shares to be received in the companies continuing after the reorganisation;
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7)the moment from which the shareholders of a company being wound up after the reorganisation shall be entitled to participate in the profits of the company continuing after the reorganisation and all terms related to the granting of this right;
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8)the moment from which the rights and obligations of the company being wound up after the reorganisation shall be assumed by the company continuing after the reorganisation;
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9)the moment from which the contractual rights and obligations of the company being wound up after the reorganisation shall be assumed by the company continuing the activities after the reorganisation and the transactions shall be included into the accounting of this company;
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10)the rights granted by the company continuing after the reorganisation to the holders of shares of different classes, debentures and other securities;
\n
11)in case of division of the company, the exact description of the assets, rights and obligations of the company being divided and the allocation thereof to the companies continuing after the reorganisation;
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12)the special rights granted to members of the bodies of the companies being reorganised and involved in the reorganisation and to the experts carrying out the evaluation of the terms of reorganisation.
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2.The terms of reorganisation must be assessed by the firm of auditors wherewith every company involved in the reorganisation and being reorganised enters into a contract. If a single firm of auditors is to be contracted, such a firm of auditors must be approved by the manager of the Register of Legal Entities.
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3.The firm of auditors must draw up the report on assessment of the terms of reorganisation indicating, inter alia, the following:
\n
1)the conclusions whether the share exchange ratio is fair and justified;
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2)the methods used to determine the share exchange ratio and the conclusions on the appropriateness of these methods for and their impact on the determination of the value of the shares;
\n
3)a description of the difficulties encountered during the assessment.
\n
4.The report on assessment of the terms of reorganisation must de drawn up and submitted to the company at least 30 days before the General Meeting of Shareholders which has on its agenda the issue of adoption of the decision on reorganisation of the Company.
\n
5.Assessment of the terms of reorganisation shall not be performed and the report on assessment of the terms of reorganisation shall not be drawn if all the shareholders of the company being reorganised and involved in the reorganisation have so agreed. The agreement of the company’s shareholders shall be executed in any form in which the shareholders’ right to vote at the General Meeting of Shareholders is exercised.
\n
6.In addition to the terms of reorganisation, the amended Articles of Association of the companies continuing after the reorganisation or the Articles of Association of the new companies formed after the reorganisation must also be drawn up.
\n
7.The proposals regarding the terms of reorganisation may be submitted by the Supervisory Board, the Board, the company manager and the shareholders holding the shares of the company the nominal value whereof is at least 1/3 of the authorised capital.
\n
8.The terms of reorganisation must be submitted to the manager of the Register of Legal Entities not later than on the first day of publication of the drawing up thereof in the daily specified in the Articles of Association. In addition to the terms of reorganisation, the manager of the Register of Legal Entities must also be provided with the report on assessment of the terms of reorganisation, except for the case specified in paragraph 5 of this Article.
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9.From the day of publication of the drawing up of the terms of reorganisation, the company being wound up after the reorganisation shall acquire the status of the company being reorganised, and the company continuing after the reorganisation shall acquire the status of the company involved in the reorganisation.
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Article 64Report on the Intended Reorganisation
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1.The Board of every public limited liability company being reorganised and involved in the reorganisation (if the Board is not formed, the manager) must draw up a detailed written report. The report must indicate the purposes of reorganisation, explain the terms of reorganisation, the continuity of activities and indicate the time limits of reorganisation, the legal and economic grounds of the terms of reorganisation, in particular the share exchange ratio and the rules determining the allocation of shares to the shareholders of the companies continuing after the reorganisation. The report must be submitted to the manager of the Register of Legal Entities at least 30 days before the General Meeting of Shareholders which has on its agenda the issue of adoption of the decision on reorganisation of the company. The report must contain information on the drawing up of the report on assessment of the terms of reorganisation and the particulars of the manager of the Register of Legal Entities storing the documentary files of the public limited liability companies being reorganised and involved in the reorganisation.
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2.In case of division of a public limited liability company, the report specified in paragraph 1 of this Article about the intended reorganisation shall not be drawn up if all the shareholders of every company being reorganised by division and involved in the reorganisation agree thereto. The agreement of the shareholders of the public limited liability company shall be executed in the form specified in paragraph 5 of Article 63 of this Law.
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3.Paragraph 1 of this Article shall apply to private limited liability companies only if so requested by the shareholders who hold at least 1/10 of all the votes.
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Article 65Notification of the Intended Reorganisation
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1.Every company being reorganised and involved in the reorganisation must publish the drawn-up terms of reorganisation three times with at least 30-day intervals between publications in the daily indicated in the Articles of Association or publish them once at least 30 days before the General Meeting of Shareholders on the reorganisation of the company in the daily indicated in the Articles of Association and notify all creditors of the company in writing. The publication or the notice must include the particulars listed in subparagraphs 1, 2, 3, 8 and 9 of paragraph 1 of Article 63 and indicate the place and time at which the documents listed in paragraph 2 of this Article may be accessed.
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2.At least 30 days before the General Meeting of Shareholders the agenda of which provides for the adoption of the decision on reorganisation of the company, each shareholder and creditor of the company must be given access to the following documents at the registered office of each company being reorganised and involved in the reorganisation:
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1)the terms of reorganisation;
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2)the amended Articles of Association of the continuing companies or the Articles of Association of new companies formed after the reorganisation;
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3)the sets of annual financial statements for the last three years and annual reports of the companies being reorganised and involved in the reorganisation. If the terms of reorganisation were drawn up 6 months after the close of the financial year of at least one company involved in the reorganisation, the set of interim financial reports must be drawn up according to the same rules as those used for the drawing up of the previous set of annual financial statements and must be submitted to the shareholders. The set of interim financial reports shall not be drawn up earlier than 3 months before the drawing up of the terms of reorganisation. In the event of division, the set of interim financial reports shall not be drawn if all the shareholders of every company being reorganised and involved in the reorganisation agree thereto. The agreement of the shareholders of the company shall be executed in the form specified in paragraph 5 of Article 63 of this Law;
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4)the reports on assessment of the terms of reorganisation, except for the case specified in paragraph 5 of Article 63 of this Law;
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5)the reorganisation reports on the intended reorganisation drawn up by the Boards (if the Board is not formed, the company manager) of the companies being reorganised and involved in the reorganisation.
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3.At the request of a shareholder and a creditor, a company must submit copies of the documents referred to in paragraph 2 of this Article. The copies of documents shall be made available to the shareholder free of charge.
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4.The manager of the company being reorganised and involved in the reorganisation must notify the shareholders of the company (by attaching a written notice to the documents referred to in paragraph 2 of this Article and making an oral announcement at the General Meeting of Shareholders) of the material changes in the assets, rights and obligations during the period between the drawing up of the terms of reorganisation and the General Meeting of Shareholders the agenda of which contains the issue of adoption of a decision on reorganisation of the company. The manager of each company being reorganised and involved in the reorganisation must notify the managers of other companies involved in the reorganisation of the material changes in the assets, rights and obligations of the company so that they could give a notice thereof to the shareholders of those companies.
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Article 66Additional Safeguards for the Discharge of Obligations to the Creditors of the Companies Being Reorganised and Involved in the Reorganisation
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1.Each company being reorganised and involved in the reorganisation must provide additional safeguards for the discharge of obligations to each creditor who so requests, where his rights arose and did not expire before the publication of the drawn-up terms of reorganisation and there is a ground for believing that, taking into consideration the financial status of the company being reorganised or involved in the reorganisation as well as the company continuing after the reorganisation which shall take over the liabilities under the terms of the reorganisation, the reorganisation will hinder the discharge of an obligation.
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2.The creditors of a company may submit their claims from the first day of publication of the terms of reorganisation until the General Meeting of Shareholders the agenda whereof provides for the adoption of a decision on reorganisation of the company.
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3.A company may refrain from providing additional safeguards for the discharge of obligations if the discharge of its liabilities to the creditor is adequately secured by pledge, mortgage, surety or guarantee. Disputes over the additional safeguards for the discharge of obligations shall be settled by court.
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4.The documents for the registration of the companies continuing after the registration or the Articles of Association thereof as well as the documents for the removal from the register of the companies being wound up after the registration may not be submitted to the manager of the Register of Legal Entities if no additional safeguards for the discharge of obligations have been provided to the creditor who so requested as laid down in paragraphs 1 and 2 of this Article as well as before a court’s decision becomes effective if the dispute over additional safeguards for the discharge of obligations is being heard in court.
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5.Holders of debentures of the company being reorganised or involved in the reorganisation shall have the rights of creditors referred to in paragraphs 1 and 2 of this Article, and the company shall have the rights and obligations referred to in paragraphs 1, 3 and 4 of this Article in respect of the holders of the debentures.
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Article 67Exchange of Shares in the Course of Reorganisation of Companies
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1.The shares of the companies being reorganised must be exchanged for the shares of the companies continuing after the reorganisation (when reorganising the newly formed companies and the companies continuing after the reorganisation), except for the case provided for in paragraph 3 of this Article.
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2.The shares of the companies continuing after the reorganisation may be allocated to the shareholders of the companies being wound up after the reorganisation in proportion to the authorised capital of the companies being reorganised or otherwise.
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3.Where, in the event of a company’s division, the shares in the companies continuing after the reorganisation are allocated to the shareholders of the company being divided otherwise than in proportion to their participation in the authorised capital of that company, the shareholders holding the shares the nominal value whereof is less than 1/10 of the authorised capital of the company being divided shall have the right to require, within 45 days after the adoption of a decision on reorganisation of the company by the General Meeting of Shareholders, that their shares be redeemed by the company being divided before the completion of the reorganisation. The provisions of Article 54 of this Law shall not apply to such redemption of the shares. Paragraph 4 of this Article shall apply to the redeemed shares. The price paid for the shares being redeemed shall be determined taking into account the average market price of these shares over the period of six months immediately preceding the adoption of a decision on reorganisation of the company by the General Meeting of Shareholders. Disputes over the amount of the consideration for shares shall be settled in court. If the nominal value of the shares required to be redeemed exceeds 1/10 of the authorised capital of the company being divided, the reorganisation of the company under the approved terms of reorganisation may not be continued.
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4.Own shares acquired by a company being wound up after the reorganisation or the shares of a company being wound up after the reorganisation acquired by a person acting in his own name, but for the benefit of the company and for the account thereof as well as the shares of a company being wound up after the reorganisation acquired by the company continuing after the reorganisation or by a person acting in his own name, but for the benefit of this company and for the account of this company shall not be exchanged for shares of the company continuing after the reorganisation.
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5.Where the shares are exchanged for new shares in the companies continuing after the reorganisation, the difference in the share price may be paid in cash to the shareholders of the companies being wound up after the reorganisation. Cash payments may not exceed 10% of the nominal value of the new shares allocated to the shareholders in the companies continuing after the reorganisation.
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Article 68Succession to the Assets, Rights and Obligations of the Companies Being Reorganised
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1.The companies continuing after the reorganisation shall be the successors to all assets, rights and obligations of the reorganised companies upon registration of the newly formed companies or registration of the amended Articles of Association of the companies continuing after the reorganisation in the Register of Legal Entities, unless otherwise provided by the terms of reorganisation. The assets, rights and obligations shall be assigned to the companies in compliance with the terms of reorganisation.
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2.Where any assets of a company being divided are not assigned under the terms of reorganisation to any of the companies continuing after the reorganisation, such assets or the proceeds from the sale thereof shall be succeeded to by all companies continuing after the reorganisation in proportion to the share of the equity capital assigned to each of those companies under the terms of reorganisation.
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3.Where any obligation of a company being divided is not assigned under the terms of reorganisation to any of the companies continuing after the reorganisation, all companies continuing after the reorganisation shall be jointly and severally liable for it. The liability of each of these companies for the obligation shall be limited to the amount of the equity capital assigned to each of them under the terms of reorganisation.
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4.Where any obligation of the Company being divided is assigned under the terms of reorganisation to one of the companies continuing after the reorganisation, that company shall be liable for this obligation. If the company fails to discharge of the obligation or any part thereof and no additional safeguards have been provided, according to the procedure set forth by in this Law, to the creditors who so requested, all other companies continuing after the reorganisation shall be jointly and severally liable for the failure to discharge the obligation (or any part thereof). The liability of each of these companies shall be limited to the amount of the equity capital assigned to each of them under the terms of reorganisation.
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5.Where a company being reorganised has issued securities other than shares, the holders of these securities shall be granted the participation in the companies continuing after the reorganisation at least equivalent to the rights they had in the reorganised company.
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6.Paragraph 5 of this Article shall not apply where the holder of securities other than shares agrees to the change of his rights as well as where the holder of redeemable securities other than shares is entitled to require redemption of these securities under the terms of reorganisation. The redeemable securities other than shares must be redeemed within 2 months from the completion of the reorganisation, but not later than their maturity date set in a decision on issuance of these securities.
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Article 69Completion of Reorganisation
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1.Reorganisation shall be deemed completed when all the new companies formed after the reorganisation are registered or the amended Articles of Association of all the companies continuing after the reorganisation are registered.
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2.Prior to submission of documents of the company continuing after the reorganisation to the manager of the Register of Legal Entities, the General Meeting of Shareholders of this company shall be convened if the terms of reorganisation so provide. Both the shareholders of the company continuing after the reorganisation and the shareholders of the companies being wound up after the reorganisation shall be entitled to attend this General Meeting of Shareholders and vote if they have been allocated the shares of the company continuing after the reorganisation under the terms of reorganisation.
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3.A new company formed after the reorganisation shall be registered after the General Meeting of Shareholders of this company is held and elects the company’s organs elected by the General Meeting of Shareholders under the Articles of Association and after the Board (if the Articles of Association provide for the election of the Board) and the company manager are elected as well as after the statutory documents are submitted to the manager of the Register of Legal Entities.
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4.The General Meeting of Shareholders referred to in paragraphs 2 and 3 of this Article may decide all issues within the powers of the General Meeting of Shareholders.
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5.The reorganised company shall be wound up upon its removal from the Register of Legal Entities.
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6.Members of the management organs of the reorganised company and the company involved in the reorganisation who drew up and exercised the terms of reorganisation as well as the experts who evaluated the terms of reorganisation under the agreement between the company and the firm of auditors must reimburse the damage they inflicted on the shareholders of those companies according to the procedure prescribed by laws.
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Article 70Merger by Acquisition by the Company Holding at Least 90% of the Shares in the Company Being Acquired
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1.Subparagraphs 4, 5, 6 and 7 of paragraph 1, paragraphs 2, 3, 4 and 5 of Article 63, Article 64, subparagraphs 4 and 5 of paragraph 2 of Article 65 and paragraphs 1, 2, 3 and 5 of Article 67 of this Law shall not apply to the merger by acquisition where the company continuing after the reorganisation is the holder of all shares in the company being acquired.
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2.Paragraphs 2, 3, 4 and 5 of Article 63, Article 64 and subparagraphs 4 and 5 of paragraph 2 of Article 65 of this Law shall not apply to the merger by acquisition where the company continuing after the reorganisation holds at least 90% of the shares in the company being acquired. In this case, the company, if requested so by other shareholders of the company being acquired, must redeem their shares before the completion of the reorganisation. The provisions of paragraph 3 of Article 67 of this Law shall apply to the redemption of shares.
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Article 71Split-off of a Company
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1.A part of the company continuing after the reorganisation may be split off and one or more new companies of the same legal form may be formed on the basis of the assets, rights and obligations assigned to this part.
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2.The provisions of the Civil Code and this Law regulating reorganisation by division shall apply mutatis mutandis to the split-off referred to in paragraph 1 of this Article.
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Article 72Transformation
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1.A public limited liability company may be transformed into a legal person of the following legal forms:
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1)private limited liability company;
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2)state enterprise;
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3)municipal enterprise;
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4)agricultural company;
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5)co-operative company;
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6)general partnership;
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7)limited partnership;
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8)individual enterprise;
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9)public establishment.
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2.A private limited liability company may be transformed into a public limited liability company or another legal person of one of the legal forms listed in subparagraphs 2–9 of paragraph 1 of this Article.
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3.A company shall be transformed pursuant to the Civil Code, this Law and the law regulating the legal persons of a new legal form.
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4.An insolvent company may not be transformed.
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5.A decision on transformation of a Company shall be taken by the General Meeting of Shareholders. Where a company has shares of different classes, the decision on transformation of the company shall be adopted subject to a separate vote by the holders of each class of shares (as well as the holders of non-voting shares).
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6.The documents of incorporation of the legal person of a new legal form must be approved and the organs elected by the meeting of members must be elected (formed) by a decision on the transformation of a company adopted by the General Meeting of Shareholders. The decision of the General Meeting of Shareholders must, inter alia, indicate the following:
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1)the name, legal form and registered office of the legal person of a new legal form;
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2)the purposes of the legal person of a new legal form;
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3)the procedure, terms and time limits for a shareholder of the company being transformed to become a member of the legal person of a new legal form.
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7.A notification of a decision on transformation of a company must be published in the daily indicated in the Articles of Association three times with at least 30-day intervals between the publications or it must be published once in the daily indicated in the Articles of Association, notifying every creditor of the Company thereof in writing. The notification must contain the particulars of the company specified in Article 2.44 of the Civil Code as well as the name, legal form and registered office of the legal person of a new legal form.
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8.While transforming a public limited liability company into a legal person of a different legal form, a general securities account for the public limited liability company in the Central Securities Depository of Lithuania must be closed, inter alia, before the registration of the documents of incorporation of the legal person of a new legal form. In the case of a public limited liability company considered to be an issuer of securities under the Law on Securities, inter alia, a tender offer to buy up the shares of the public limited liability company must be submitted and realised.
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9.The provisions of the Law on Securities shall apply to the tender offer referred to in of paragraph 8 of this Article, unless this paragraph provides otherwise. The tender offer shall be submitted by the shareholders who voted for the decision on transformation of a public limited liability company. One or more shareholders shall be entitled to fulfil this obligation for other shareholders. The shareholders who voted against the decision on transformation of the public limited liability company or did not vote at all shall be entitled to sell their shares at the time of the tender offer.
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10.A documentary proof of a decision on transformation of a company must be submitted to the manager of the Register of Legal Entities not later than on the first day of publication.
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11.A company shall acquire the legal status of a company being transformed from the day of a decision on transformation of the company.
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12.When transforming a legal person of another legal form into a company, the assets transferred for the shares of this company must be evaluated by an independent property valuer in the manner laid down by the legal acts regulating asset valuation. Asset valuation reports shall be subject to paragraph 8 of Article 8 of this Law. The asset valuation report for the assets transferred for the shares of the company must be submitted to the manager of the Register of Legal Entities at least 10 days before the adoption of a decision on transformation.
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13.When transforming a legal person of another legal form into a company, the authorised capital of the Company must be not less that the minimum capital specified in Article 2 of this Law. If the assets of a legal person of another legal form which is being transformed into a company prove insufficient to form this legal person’s minimum authorised capital prescribed by Article 2 of this Law or the liabilities exceed the value of the assets, the members of the legal person being transformed shall be entitled to pay additional contributions.
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14.When transforming a private limited liability company as well as a legal person of another legal form provided for by laws into a public limited liability company, in addition to other actions laid down in this Law and other laws, it shall be necessary:
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1)to approve the shares prospectus in the cases and in accordance with the procedure laid down by the legal acts regulating the securities market;
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2)to select the firm of auditors.
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15.A company may be transformed into a state enterprise where all of its shares are held by the State.
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16.A company may be transformed into a municipal enterprise where all of its shares are held by a municipality.
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17.A company may be transformed into an agricultural company if it has at least 2 shareholders and its income from agricultural products and the services provided for agriculture over the last financial year constitute over 50% of all the sales revenue.
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18.A company may be transformed into a co-operative company if it has at least 5 shareholders.
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19.A company may be transformed into a general partnership if it has at least 2, but not more than 20 shareholders.
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20.A company may be transformed into a limited partnership if it has at least 3, but not more than 20 shareholders.
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21.A company may be transformed into an individual enterprise if all shares in the company are held by a single natural person.
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22.The incorporation documents of a legal person of a new legal form shall be registered in the Register of Legal Entities, and the data of the Register of Legal Entities shall be amended upon election (formation) of the management organs of the legal person of a new legal form, provision of additional safeguards for the discharge of obligations to the creditors who so requested and emergence of the circumstances provided for in the laws as well as submission of the statutory documents. The amended incorporation documents shall become invalid if they are not submitted to the manager of the Register of Legal Entities within six months from adoption of a decision on transformation of the company.
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23.Transformation shall be deemed completed on the day of registration of the amended incorporation documents of a legal person of a new legal form in the Register of Legal Entities.
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Article 73Liquidation of a Company
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1.A company may be liquidated on the grounds laid down in the Civil Code for the liquidation of legal persons.
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2.A decision on liquidation of a company shall be adopted by the General Meeting of Shareholders or a court in the cases specified by the Civil Code.
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3.The General Meeting of Shareholders may not adopt a decision on liquidation of an insolvent company.
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4.A bankrupt company shall be liquidated according to the procedure laid down in the Enterprise Bankruptcy Law.
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5.The General Meeting of Shareholders or a court, having adopted a decision on liquidation of a company, or the manager of the Register of Legal Entities, where a decision on liquidation of the company is adopted by the court on the initiative of the manager, must elect (appoint) the liquidator.
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6.From the day of adoption of a decision on liquidation of a company by the General Meeting of Shareholders, the company shall acquire the status of a company in liquidation. Upon his election (appointment), the liquidator shall assume the rights and duties of the company manager and the Board. The company manager and the Board shall lose their powers as of the appointment of the liquidator. The General Meeting of Shareholders may be convened according to the procedure laid down in this Law.
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7.The documents of a company in liquidation used by it in dealings with third parties must, inter alia, indicate its legal status “in liquidation”.
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8.The General Meeting of Shareholders may fix another date (other than the date of adoption of a decision) as of which a decision on liquidation of a company shall become effective, though this date may not precede the date of adoption of the decision on liquidation of the company.
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9.If a company is liquidated because of the expiry of the duration of the company, the General Meeting of Shareholders must, at least three months before such an expiry, adopt a decision on liquidation of the company and elect the liquidator or adopt a decision on extension of the period of duration and amend the Articles of Association of the company. In this case, upon adoption of the decision on liquidation of the company, the company shall acquire the status of a company in liquidation on the next day after the expiry of the period of duration laid down in the Articles of Association. If the General Meeting of Shareholders fails to elect the liquidator within the prescribed time limits, the shareholders whose holdings in the company entitle them to at least 1/10 of all votes as well as the manager of the Register of Legal Entities shall be entitled to refer to court for the appointment of the liquidator.
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10.The liquidator shall publish a notification of the liquidation of a company 3 times with at least 30-day intervals between the publications in the daily indicated in the Articles of Association or publish it once in the daily indicated in the Articles of Association and notify all the creditors of the company thereof in writing. The publication or notice must include all the particulars of the company referred to in Article 2.44 of the Civil Code.
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11.Not later than on the first day of publication of the notification of the liquidation of a company, the liquidator must submit the documents confirming a decision on liquidation of the company and the particulars of the liquidator to the manager of the Register of Legal Entities.
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12.When a company is being liquidated, the persons who have subscribed, but have not paid for the shares must make payments for the shares according to the procedure laid down in the share subscription agreement. The subscribers may be released from their duty to pay the outstanding contributions by the amount of the assets of the company in liquidation which would be allocated to them only where the grounds for the liquidation of the company is the invalidation of the company’s incorporation pursuant to Article 2.114 of the Civil Code and the company is capable of satisfying its liabilities to the creditors.
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13.A company in liquidation must first make settlement with its creditors according to the sequence of satisfaction of creditors’ claims laid down in the Civil Code. Upon settlement with the creditors of the company in liquidation, the accrued dividend shall be paid to the holders of preference shares with a cumulative dividend. The remaining assets of the company in liquidation shall be allocated to the shareholders in proportion to the nominal value of the shares held by them. Any subsequently discovered assets of the company shall be allocated in the same manner. If different rights are attached to the shares of the company, this must be taken into account when allocating the assets.
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14.The assets of a company may be allocated to the shareholders at least 2 months from the completion of all actions laid down in paragraph 10 of this Article.
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15.In the event of judicial disputes over the payment of a company’s debts, the assets of the company may not be allocated to the shareholders until the disputes are settled by court and settlement with the creditors is effected.
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16.A decision on cancelling the liquidation of a company may be adopted by the General Meeting of Shareholders which adopted a decision on the liquidation of the company or by a court. The decision on liquidation of the company may not be revoked if at least one shareholder received a share of assets of the company in liquidation.
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17.The documentary proof of a decision on liquidation of a company as well as on cancelling the liquidation must be submitted to the manager of the Register of Legal Entities.
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Article 74Powers of the Liquidator
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1.The liquidator shall have the rights and duties of the Board and the company manager. Only a natural person may be the liquidator and he shall be subject to the same requirements as those applicable to the company manager.
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2.In addition to other duties laid down by this Law and the Civil Code, the following functions shall be assigned to the sphere of competence of the liquidator:
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1)to draw up the opening balance sheet at the start of liquidation;
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2)to allocate to the shareholders the assets of the company remaining after settlement with the creditors of the company and to draw up the documents of transfer thereof;
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3)in the event of liquidation of a public limited liability company, to close a general securities account for the public limited liability company in the Central Securities Depository of Lithuania;
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4)to hand over the documents of the liquidated company for storage according to the procedure laid down in the Law on Documents and Archives;
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5)to draw up a liquidation statement of the company. The liquidation statement shall describe the process of liquidation and shall confirm the completion of all actions related thereto;
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6)to submit the liquidation statement of the company and other documents necessary for the removal of the liquidated company from the Register to the manager of the Register of Legal Entities.
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3.If the company’s liquidation lasts for a period exceeding 12 months, the liquidator shall, not later than within three months, draw up the set of annual financial statements and the liquidation report after the close of every financial year. The set of annual financial statements and the liquidation report shall be approved by the General Meeting of Shareholders. Access to these documents must be granted to all shareholders and creditors.
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4.The liquidator may be dismissed according to the procedure laid down in the Civil Code.
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5.A decision on temporary substitution of the liquidator during his vacation or temporary incapacity for work shall be adopted by the General Meeting of Shareholders, a court or the manager of the Register of Legal Entities which have elected (appointed) the liquidator according to the procedure laid down in this Law. A person substituting for the liquidator shall be subject to the same requirements as those applicable to the liquidator.
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CHAPTER NINE BRANCHES OF FOREIGN COMPANIES
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Article 75Establishment, Operation and Termination of Activities of Branches of Foreign Companies
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1.The following shall be considered as branches of foreign companies:
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1)branches of the companies established in the Member States of the European Union;
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2)branches of the companies established in the states referred to in Article 77 and Section 8 of Annex XXII to the Agreement on the European Economic Area;
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3)branches of the legal persons established in the states not referred to in subparagraphs 1 and 2 of this Article, where the legal forms thereof are similar to those of companies.
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2.A branch of a foreign company shall be deemed established upon registration thereof in the Register of Legal Entities.
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3.Only the documents referred to in Article 76 of this Law and the particulars referred to in Article 77 shall be submitted to the Register of Legal Entities. The manager of the branch of a foreign company shall be responsible for the submission of the documents and particulars to the Register of Legal Entities.
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4.The documents of branches of foreign companies used in dealings with third parties must contain the information referred to in Article 2.44 of the Civil Code about the foreign company which has established the branch and indicate the register which accumulates and stores the data on the branch of the foreign company as well as the code of the branch of the foreign company. The register where the foreign company is registered shall not be indicated if the law applicable to the foreign company does not require such registration.
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5.The information referred to in paragraph 4 of this Article must also be available on the website of the branch of the foreign company if there is one.
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6.The activities of the branch of the foreign company shall be governed by the Civil Code, this Law and other laws and legal acts of the Republic of Lithuania.
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7.A notice of termination of activities of the branch of a foreign company must be published by the branch manager three times with at least 30-day intervals in at least one of the main dailies of the Republic of Lithuania or the notice must be published in the daily once and all creditors must be notified thereof in writing. The publication or notice must contain the particulars referred to in paragraph 4 of this Article and indicate a time limit for the filing of creditors’ claims, which may not be less than 2 months from the date of publication.
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8.Upon publication of a notice of termination of activities of the branch of a foreign company, the creditors of the branch of the foreign company shall be entitled to demand the discharge of an obligation or require that the foreign company which owns the branch provide additional safeguards for the discharge of obligations. Disputes over the discharge of obligations or additional safeguards shall be settled in court.
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9.The documents relating to the removal of the branch of a foreign company from the Register may not be submitted to the manager of the Register of Legal Entities if obligations have not been discharged or additional safeguards for the discharge of the obligations have not been provided to the creditors who so requested; neither may the above documents be submitted before the effective date of a court’s ruling if a dispute over the discharge of the obligations or additional safeguards is being heard in court.
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10.Until the removal from the Register, the documents of the branch of a foreign company which has terminated its activities shall be transferred for storage according to the procedure laid down for enterprises in the Law on Documents and Archives.
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Article 76Documents of a Foreign Company and its Branch to be Submitted to the Register of Legal Entities
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1.The following documents of a foreign company and its branch shall be submitted to the Register of Legal Entities:
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1)an excerpt from the register where the file of the foreign company is stored confirming that the foreign company is registered in the register;
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2)the documents of incorporation of the foreign company, the Memorandum of Association and the Articles of Association, if these are separate documents, as well as all amendments to these documents;
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3)the set of annual financial statements of the foreign company which has been drawn up, audited and disclosed according to the law of the state in which the foreign company is established;
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4)the documents attesting to the procedures applied to an insolvent company.
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2.If the set of annual financial statements of the foreign companies referred to in subparagraph 3 of paragraph 1 of Article 75 of this Law is drawn up according to the requirements other than those applied in the European Union, the set of annual financial statements of the branch of the foreign company must be drawn up and submitted to the Register of Legal Entities instead of the set of annual financial statements of the foreign company referred to in subparagraph 3 of paragraph 1 of this Article. The set of annual financial statements of the branch of the foreign company shall be drawn up according to the procedure laid down in the legal acts of the Republic of Lithuania regulating the accounting and drawing up of financial statements.
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3.The documents referred to in subparagraphs 1 and 2 of paragraph 1 of this Article must be legalised according to the procedure laid down in the legal acts, save for the cases laid down in treaties.
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4.The foreign companies referred to in subparagraphs 1 and 2 of paragraph 1 of Article 75 of this Law, where they have established more than one branch, may select the branch the file whereof will be used to store the documents referred to in paragraph 1 of this Article. In such a case, the files of other branches must indicate the name, code and register manager of this selected branch.
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5.In addition to the documents referred to in paragraph 1 of this Article, the foreign companies referred to in subparagraph 3 of paragraph 1 of Article 75 of this Law must at least once a year submit to the Register of Legal Entities a document evidencing the amount of the subscribed capital of the foreign company if the amount of the subscribed capital is not specified in the documents referred to in subparagraph 2 of paragraph 1 of this Article.
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Article 77Particulars of a Foreign Company and its Branch in the Register of Legal Entities
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1.The following particulars of a foreign company and its branch shall be entered in the Register of Legal Entities:
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1)the address of the branch;
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2)the operation of the branch;
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3)the name and legal form of the foreign company as well as the name of the branch if different from the name of the foreign company;
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4)the particulars of the persons who, as members of the organs of the foreign company, act on behalf of the foreign company in dealings with third parties and in judicial proceedings, the dates of their appointment and expiry of their term of office as well as the sample signatures of these persons;
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5)the information whether the persons referred to in subparagraph 4 of this paragraph may, when acting on behalf of the foreign company, act at their own discretion or must act jointly, the extent of their rights, the expiry of powers, if such is laid down;
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6)the particulars of the manager of the branch, the dates of his appointment and expiry of the term of office as well as the sample signature;
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7)the date of appointment of liquidators of the foreign company if the company is in liquidation, the particulars of the liquidators, the extent of their rights and sample signatures;
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8)the date of winding up of the foreign company;
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9)the date of termination of activities of the branch.
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2.In addition to the particulars laid down in paragraph 1 of this Article, the Register of Legal Entities shall also indicate, in respect of the branches of the foreign companies referred to in subparagraphs 1 and 2 of paragraph 1 of Article 75 of this Law, the register where the file of a foreign company is stored and the company’s number in that register.
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3.In addition to the particulars laid down in paragraph 1 of this Article, the following particulars of branches of the foreign companies referred to in subparagraph 3 of paragraph 1 of Article 75 of this Law shall be entered in the Register of Legal Entities:
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1)the law applicable to the foreign company;
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2)the legal form, registered office and field of activities of the foreign company;
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3)if registration is required under the law applicable to the foreign company, the register in which the foreign company is registered and its registration number in that register;
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4)the amount of the subscribed capital of the foreign company if this amount is not indicated in the documents of incorporation of the foreign company.
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CHAPTER TEN FINAL PROVISIONS AND ENTRY INTO FORCE OF THE LAW
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Article 78Final Provisions
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1.Provisions of paragraphs 3 and 4 of Article 22, Articles 261, 262, 302 and 303 of this Law shall not apply to the collective investment undertakings specified in the Law on the Collective Investment Undertakings, except for collective investment undertakings of the closed-ended type.
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2.If the public distribution of the transferrable securities issued by a public limited liability company falls outside the scope of legal acts regulating the securities market and the total sales value of these securities amounts to LTL 350 000 within the period of 12 months, an information document must be drawn up before their public distribution indicating the information about the public limited liability company and the offered transferrable securities and granting access to it to the persons intending to acquire the securities. The Securities Commission shall provide details of the content of the information document and specify the cases when the drawing up of the document is not required.
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Article 79Entry into Force and Implementation of the Law
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1.This Law shall enter into force on 1 January 2004.
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2.From the entry into force of this Law, the Law of the Republic of Lithuania on Companies No I-528 (Official Gazette No 55-1046, No102-2050, 1994; No 21-492, No 41-993, No 107-2393, 1995; No 1-4, No 100-2257, No 126-2947, 1996; No 69-1739, 1997; No 36-961, No 115-3246, 1998; No 86-2562, 1999; No 15-380, No 28-760, 2000; No 34-1125, 2001) shall apply to reorganisation and liquidation of the companies decisions on the reorganisation and liquidation whereof were taken prior to 30 June 2001.
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3.The Law of the Republic of Lithuania on Companies No VIII-1835 (Official Gazette No 64-1914, No 113-3614, 2000; No 112-4081, 2001; No 43-1607, No 72-3013, No 101-4495, No 124-5628, 2002) shall apply to reorganisation and liquidation of the companies decisions on the reorganisation and liquidation whereof were taken from 1 July 2001 until the entry into force of this Law.
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4.Upon entry into force of this Law, the term “the head of a company’s administration” used in other legal acts shall correspond to the term “the company manager”.
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5.The provisions laid down in this Law for the registration of companies in the Register of Legal Entities and the duty of the manager of the Register of Legal Entities to publish the facts which are to be made public under this Law shall enter into force from the commencement of operation of the Register of Legal Entities.
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6.Until the commencement of operation of the Legal Entities Register:
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1)the companies, their branches and representative offices as well as their documents and particulars shall be registered in and accumulated in the Register of Enterprises of the Republic of Lithuania;
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2)the documents which must be submitted to the manager of the Register of Legal Entities according to the procedure laid down in this Law shall be submitted to the manager of the Register of Enterprises;
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3)the time limits which must, in the cases specified by this Law, run from the publication by the manager of the Register of Legal Entities of the facts referred to in this Law shall run from the receipt of relevant documents in the Register of Enterprises.
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7.From the commencement of operation of the Register of Legal Entities:
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1)the documents and particulars stored in the Register of Enterprises shall be considered as the documents and particulars of the Register of Legal Entities;
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2)the companies, their branches and representative offices registered in the Register of Enterprises shall be considered to have been registered in the Register of Legal Entities.
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I promulgate this Law passed by the Seimas of the Republic of Lithuania.
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PRESIDENT OF THE REPUBLIC VALDAS ADAMKUS Annex to the Republic of Lithuania Law on Companies EU LEGAL ACTS IMPLEMENTED BY THIS LAW 1. First Council Directive 68/151/EEC of 9 March 1968 on co-ordination of safeguards which, for the protection of the property rights of members and others, are required by member states of companies within the meaning of second paragraph of article 58 of the treaty, with a view to making such safeguards equivalent throughout the community (OJ 2004 special edition, Chapter 17, Volume 1, p.3) 2. Second Council Directive 7791/EEC of 13 December 1976 on co-ordination of safeguards which, for the protection of the property rights of members and others, are required by member states of companies within the meaning of second paragraph of article 58 of the treaty, in respect of the formation of public limited liability companies and the maintenance and alteration of their capital, with a view to making such safeguards equivalent throughout the community (OJ 2004 special edition, Chapter 17, Volume 1, p.3) 3. Third Council Directive 78/855/EEC of 9 October 1978 based on article 54 (3) (g) of the treaty concerning mergers of public limited liability companies (OJ 2004 special edition, Chapter 17, Volume 1, p. 42).
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4.Sixth Council Directive 82/891/EEC of 17 December 1982 based on article 54 (3) (g) of the treaty, concerning the division of public limited liability companies (OJ 2004 special edition, Chapter 17, Volume 1, p. 50).