The head of the Administration must within 45 days from the receipt of the shareholder's notice inform the shareholder of the consent to or prohibition of the sale of shares, of the wish of other shareholders to purchase all shares the above shareholder is offering for sale. If one or several shareholders of the private limited liability company expressed their wish to purchase all shares in the private limited liability company offered for sale by the shareholder, the latter must sell the shares to the shareholders (one or several) who expressed their wish, whereas the shareholder/shareholders who expressed his/their wish must purchase all those shares at the price not lower than the one indicated in the notice, effecting the payment within 3 months from the day of submission to the head of the Administration of the private limited liability company of the notice of intention to sell the shares, unless otherwise agreed with the shareholder who is selling the shares.
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12.If the shareholder has not been notified within the time limits set in paragraphs 10 and 11 of this Articles, the shareholder shall acquire the right to transfer the shares, in the event of sale - to sell the shares at the price not lower than the one specified in the notice.
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13.In the event of transfer of shares in the private limited liability company according to other laws or in the course of enforcement of a court order, no consent to the transfer of shares shall be required.
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14.If, in the case specified in paragraph 13 of this Law or after the acquisition of the shares in the private limited liability company by inheritance, the number of shareholders of the private limited liability company becomes larger than established in paragraph 5 of Article 2 of this Law and does not fall down to the prescribed limit within 12 months, the private limited liability company must be reorganised into a public limited liability company or liquidated.
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Article 50Invalidity of the Shares Issued by the Company
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1.Shares shall be invalid and shall not carry any property or non-property rights if:
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1)they have been offered for secondary trading in violation of the requirements of paragraph 9 of Article 41;
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2)the shares of the public limited liability company have not been registered with the Securities Commission or have been cancelled from the register (their registration has been cancelled) in the manner prescribed by laws.
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2.If the private limited liability company has changed its name, exchanged one type of shares for another type of shares, reduced the nominal value of its certificated shares or the rights of preference shareholders, it must also exchange the certificated shares held by the shareholders or make appropriate inscriptions on them. If within 3 months after the notification of the shareholder against his signature or by a registered letter the shareholder fails to present the certificated shares to the Board of the private limited liability company (if the Board is not formed - to the head of the Administration), the said shares shall become invalid, while the new certificated shares shall be deposited with the private limited liability company until there are collected.
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3.The company must make an announcement about the invalidity of shares in the periodical publication specified in the Articles of Association.
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4.If the certificated share issued by the private limited liability company is damaged and not suitable for circulation, but is, however, identifiable, the company must replace it at the holder's request. Expenses incurred by exchanging the certificated shares shall be covered by the holders of the shares.
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5.Lost, destroyed or missing certificated shares shall be replaced by the company according to the procedure established by the laws of the Republic of Lithuania.
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Article 51Increase of the Authorised Capital
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1.The authorised capital of the company shall be increased by issuing new shares or increasing the nominal value of the issued shares and amending the Articles of Association accordingly.
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2.The authorised capital of the company shall be increased on the resolution of the General Meeting adopted by an at least 2/3 majority vote. Where there are several types or classes of shares, the resolution on the increase of the authorised capital shall be adopted by an at least 2/3 majority vote in favour, the holders of each type or class of shares taking separate votes. The approval of the holders of non-voting shares of preference classes, adopted by an at least 2/3 majority vote shall also be necessary for adopting a resolution on increasing the authorised capital through additional contributions by issuing preference shares.
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3.The company may issue new shares or increase the nominal value of shares only when its authorised capital has been fully paid (at the price of the last issue of shares).
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4.The resolution of the General Meeting to increase the authorised capital must be disclosed in the manner prescribed by law.
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5.Amendments to the Articles of Association relative to the increase of the authorised capital shall be registered in the Register of Enterprises after all the shares have been subscribed for and the initial contributions have been collected. In case of undersubscription during the subscription period, the authorised capital may be increased by the amount equal to the sum of nominal values of the shares subscribed for only in case this has been provided for in the resolution of the General Meeting which adopted the resolution on increasing the authorised capital. Based on this resolution, the Board of the company shall have the right to change the amount of the authorised capital and to amend the Articles of Association accordingly. In this case the increase in the authorised capital may not exceed the nominal value of the shares subscribed for.
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6.The authorised capital shall be deemed increased only upon the registration of the amendments to the Articles of Association in the Register of Enterprises of the Republic of Lithuania.
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Article 52Increase of the Authorised Capital by Additional Contributions
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1.The authorised capital of the company may be increased by additional contributions of its shareholders and other persons only upon the issue of new shares.
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2.An insolvent company shall be prohibited from increasing its authorised capital through additional contributions by making a public offer for share subscription. It may make an offer for purchase of shares only to its shareholders, workers and creditors.
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3.If a public limited liability company has issued convertible debentures, its authorised capital may be increased by issuing new shares (of the nominal value, type and class specified in the resolution concerning the issue of convertible debentures), for which the convertible debentures must be exchanged if within the time period specified in the resolution to issue convertible debentures their holder expressed his wish to exchange the debentures for shares. Shares shall be granted in exchange for convertible debentures upon the expiry of the time period specified in the resolution to issue convertible debentures, whereafter the Board shall change the amount of the authorised capital in accordance with the share issue offered for convertible debentures, amend the Articles of Association of the company and present them for registration. In this case paragraph 4 of this Article shall not apply. Payment for convertible debentures shall be deemed payment for the shares into which the debentures are converted.
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4.If the amendments to the company's Articles of Association, relating to the increase in the authorised capital, are not registered in the Register of Enterprises of the Republic of Lithuania within 6 months from the day of the General Meeting which adopted the resolution on increasing the authorised capital by additional contributions, the authorised capital shall be considered as not to have been increased. In this case the contributions for the shares subscribed for must be repaid forthwith.
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Article 53Increase of the Authorised Capital out of the Funds of the Company
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1.The authorised capital of the company may be increased upon the resolution of a General Meeting out of the retained profit, share premium or reserves (except for the reserves for purchasing own shares and reserves available for distribution) by issuing new shares which are transferred to the shareholders without payment, or by increasing the nominal value of the previously issued shares.
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2.The General Meeting shall pass a resolution to increase the authorised capital on the basis of the financial statement drawn up not earlier than 30 days prior the Meeting. Where the resolution to increase the authorised capital is adopted at the Annual General Meeting, the resolution may be passed on the basis of the annual financial statements.
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3.It shall be prohibited to increase the authorised capital of the company out of the retained profit, share premium or reserves until the losses shown in the financial statements are covered.
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4.The amendments to the Articles of Association relative to increasing the authorised capital out of the funds of the company shall be registered in the Register of Enterprises. Alongside with the other documents, the administrator of the Register shall be presented the company's financial statements on the basis whereof the resolution to increase the authorised capital has been adopted.
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5.When the company is increasing its authorised capital out of the retained profit, premium on the shares or reserves, the shareholders shall be entitled to free new ordinary shares pro rata to the total nominal value of shares owned by them on the day of the General Meeting which adopted the resolution on increasing the authorised capital, except in the cases specified in paragraph 2 of Article 44 of this Law and paragraph 6 of this Article.
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6.When the company increases the authorised capital out of the retained profit, premium on shares or reserves, implementing the resolution of the General Meeting or the court order to rectify the violations committed in the course of authorised capital formation or increase, the shareholders, whose property rights were violated, shall have the pre-emptive right to free new shares pro rata to the shares owned by them. The General Meeting may adopt a resolution to rectify the violations committed in the course of the authorised capital formation or increase by re-allotting the shares if the shareholders who after the committed violations owned more shares or owned shares of higher nominal value than was due to them, on the day of the General Meeting (when the resolution to rectify the violations is passed) own a not smaller amount of shares or own shares of not lower nominal value than is necessary to rectify the violations and provided that the shareholders give a written approval of such a resolution.
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7.Upon the registration in the Register of Enterprises of the Republic of Lithuania of the amendments to the Articles of Association relative to increasing the authorised capital, the Board shall, according to the procedure established in the Articles of Association, notify the shareholders of the procedure for collecting the new shares. The uncollected shares shall be kept by the company until their collection. If the shares are uncertificated, the new shares shall be entered in the securities account by crediting them to the account.
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8.If the amendments to the company's Articles of Association relative to increasing the authorised capital are not registered in the Register of Enterprises of the Republic of Lithuania within 3 months from the day of the General Meeting which adopted the resolution to increase the authorised capital out of the funds of the company, the authorised capital shall be deemed not to have been increased.
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9.The new shares shall give their holders equal rights with the holders of other shares of the same class to receive dividend for the business year in which the new shares were issued.
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Article 54Reduction of the Authorised Capital
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1.The authorised capital may be reduced in order to:
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1)pay out the available funds of the company to all the shareholders pro rata to the nominal value of the shares owned by them ;
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2)cover the losses entered in the company’s balance sheet;
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3)cancel the shares in the company acquired by the company itself or its subsidiary in violation of the provisions of Article 55 of this Law;
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4)in other cases provided for by this Law.
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2.The authorised capital may be reduced only in the following ways:
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1)by decreasing the nominal value of shares;
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2)by cancelling shares.
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3.The authorised capital may be reduced by the resolution of the General Meeting adopted by an at least 2/3 majority vote or by the court order in the cases provided for ion paragraph 6 of Article 39 and paragraph 6 of Article 55 of this Law. Where the company has issued shares of different types and classes, the General Meeting may reduce the authorised capital if this is approved of by majority vote of holders of at least 2/3 of shares of the type or class (including the holders of non-voting shares) participating in the Meeting, who take separate votes. The reduced authorised capital may not be less than the minimum amount of the company's authorised capital established in Article 2 of this Law.
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4.If the company is reducing its authorised capital in the case specified in subparagraph 1 of paragraph 2 of this Article, a resolution to increase the company's authorised capital through additional contributions by issuing new shares to be acquired by the creditors may be adopted at the same General Meeting.
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5.When reducing the authorised capital the company must in the first place cancel the shares acquired by the company itself and its subsidiary. The nominal value of all shares remaining after the cancellation of the shares in the company acquired by the company and its subsidiaries or the number of the shares shall be reduced proportionately to all shareholders, except in the case provided for in subparagraph 3 of paragraph 1 of this Article.
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6.Every creditor of the company must be notified against his signature or by a registered letter of the resolution to reduce the authorised capital of the company. Moreover, the resolution to reduce the authorised capital of the company must be published in the periodical publication specified in the Articles of Association or every shareholder must be notified thereof against his signature or by a registered letter. The resolution to reduce the authorised capital of the company, indicating the way in which the capital is to be reduced, must be disclosed in the manner prescribed by law.
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7.While reducing its authorised capital, the company must provide additional safeguards for the discharge of its obligations to each creditor who claims them, except in the cases provided for in paragraph 9 of this Article.
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8.Additional safeguards for the discharge of obligations may be claimed by the creditor, whose rights arose prior to the day of disclosure of the resolution regarding the reduction of the authorised capital of the company. The company creditor may file his claims within 2 months from the notification of the creditor of the resolution to reduce the authorised capital of the company or the day of mailing of the letter by registered mail.
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9.The company may refrain from providing the creditors additional safeguards for the discharge of obligations if at least one of the following conditions is satisfied:
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1)the total amount of the creditors' claims does not exceed 1/2 of the amount of the company's equity capital after the reduction of the authorised capital;
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2)the creditor's claims are adequately secured being protected by unfailing safeguards - pledge, suretyship or guarantee. In these cases disputes concerning the provision of additional safeguards for the discharge of obligations shall be settled in court;
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3)the authorised capital is reduced with a view to cutting the losses entered in the company's balance sheet.
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10.Amendments to the Articles of Association of the company relative to the reduction of its authorised capital shall be presented to the administrator of the Register of Enterprises for registration not earlier than 3 months after the performance of all actions specified in paragraph 6 of this Article, also after the provision of additional safeguards for the discharge of obligations to the creditors who so requested or after the court decision on the inadmissibility of the creditors' claims becomes effective. If the authorised capital is reduced in order to cut the company's loses entered in its balance sheet, the amendments to the Articles of Association may be presented to the administrator of the Register of Enterprises for registration immediately after the adoption of the resolution of the General Meeting.
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11.The authorised capital shall be deemed reduced only after the registration of the amendments to the Articles of Association in the Register of Enterprises of the Republic of Lithuania.
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12.If amendments to the Articles of Association of the company regarding the reduction of the authorised capital have been registered in violation of the requirements of this Article regarding the provision to the creditors of additional safeguards for the discharge of obligations, the reduction of the authorised capital may be declared invalid by the court order.
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13.If the shareholders fail to deliver to the Board, by the date set by the General Meeting, shares for withdrawal from circulation and cancellation, the company’s Board shall publicly declare said shares invalid.
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14.Reducing its authorised capital in the case specified in subparagraph 1 of paragraph 1 of this Article, the company may return the shareholders their share of paid-in contributions or release them from the unpaid amounts of contributions due for the shares subscribed for, corresponding to the amount payable to them had the shares been fully paid up. Upon the reduction of the authorised capital, the shareholders may be paid only in cash, unless the Articles of Association of the company or the subscription agreement establish otherwise.
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Article 55The Right of the Company to Purchase its own Shares
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1.A public limited liability company the shares whereof have been listed in the official or current list of the Stock Exchange registered in the Republic of Lithuania shall be entitled to purchase its own shares. The transactions must be concluded on the central market of the Stock Exchange.
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2.Own shares may be purchased upon the resolution of the General Meeting. The General Meeting must specify by its resolution:
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1)the purpose of the purchase of own shares;
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2)the maximum number of shares the purchase whereof is permitted;
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3)the duration of the period within which the company may purchase its own shares, which may not be longer than 18 months;
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4)the maximum and minimum price of the shares being purchased.
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3.The nominal value of the shares being purchased by a public limited liability company together with the own shares already held by the company may not be higher than 1/10 of the authorised capital.
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4.A public limited liability company shall be prohibited from purchasing its own shares if, following the purchase, the equity capital would become less than the aggregate amount of the authorised capital and reserves which are not available for distribution under paragraph 3 of Article 62.
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5.The shares of the company purchased in violation of the provisions of this Article must be transferred into the ownership of another person within 12 months from the purchase thereof.
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6.If the shares are not transferred within the time limit specified in paragraph 5 of this Article, they must be cancelled and the authorised capital must be reduced accordingly. In case of failure by the company to cancel the shares, the shares shall be cancelled and the authorised capital shall be reduced accordingly by the court order. The company's management bodies, shareholders and creditors shall have the right to apply to court. After the court makes an order to reduce the authorised capital of the company, the Board of the company must change the amount of the company's authorised capital accordingly by cancelling the company's own shares purchased in violation of the requirements of this Article and make appropriate amendments to the Articles of Association of the company. The amendments to the Articles of Association of the company must be presented for registration within 15 days from the coming into effect of the court order.
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7.Having purchased its own shares, the public limited liability company shall have no right to exercise property and non-property rights carried by the shares.
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8.The public limited liability company shall be prohibited from purchasing its own shares which have not been fully paid up.
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9.The public limited liability company may purchase its own shares only provided it has or builds up a reserve for the purchase of own shares, the amount whereof is not less than the aggregate value of own shares being purchased and those already held.
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10.Responsibility for compliance with the conditions specified in paragraphs 3, 4, 7, 8, 9 and 14 of this Article while implementing the decision to purchase own shares of the company shall rest with the head of the Administration.
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11.The company's consent to accept own shares as safeguards for the discharge of obligations shall be equivalent to the acquisition of own shares and the provisions of this Article must be applied with respect thereto.
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12.If shares of the company are subscribed for or acquired by its subsidiary, the shares shall be deemed to have been subscribed for or acquired by the company whose shares are subscribed for or acquired. The provisions of paragraphs 5 and 6 of Article 47 of this Law shall apply in respect of the above subscription for shares, while the provisions of this Article shall be applicable to the acquisition of shares.
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13.Paragraph 12 of this Article must also be applied where the company or companies in which the company whose shares are being purchased holds a majority of the votes or which may exercise a dominant influence as defined in Article 7 of this Law, have been incorporated pursuant to the laws of foreign states and are of the legal form corresponding a public limited liability company or a private limited liability company.
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14.The private limited liability company and the public limited liability company whose shares have not been listed in the official or current list of the Stock Exchange registered in the Republic of Lithuania shall be prohibited from acquiring its own shares.
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Article 56Debentures
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1.A debenture of a public limited liability company is a term debt security under which the public limited liability 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. The obligations shall be indicated in the resolution to issue debentures and in the debenture subscription agreement.
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2.The obligations of the public limited liability company, prescribed by paragraph 1 of this Article, shall comprise the payment of interest and redemption of debentures, or solely the redemption of debentures, also the granting of the right to exchange the debentures for the shares of the public limited liability company which issued the debentures.
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3.The debentures of one and the same issue shall grant their holders equal rights.
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4.The resolution to issue debentures may be adopted by the General Meeting of the public limited liability company by a simple majority vote or by the Board if this is provided for in the Articles of Association. The provision shall not be applicable to the adoption of the resolution to issue convertible debentures.
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5.In the resolution to issue debentures and in the debenture subscription agreement the public limited liability company must indicate the fixed date of debenture redemption, from which date the debenture holder shall acquire the right to receive from the public limited liability company a sum of money equal to the nominal value of the debenture. The debenture holder shall have equal rights with other creditors of the public limited liability company.
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6.Before issuing debentures offered for public subscription, the public limited liability company may conclude an agreement with a bank registered in the Republic of Lithuania or brokerage firm (making a notice to the effect in the prospectus of the debentures). Under the agreement the bank or the brokerage firm would undertake to safeguard the interests of the holders of debentures of a certain issue where there are relations with the public limited liability company, while the public limited liability company would undertake to pay it a remuneration. The bank or the brokerage firm must protect the rights and legitimate interests of the debenture holders as they would protect their own rights and legitimate interests if they were the holders of all the debentures of the issue. The bank or the brokerage firm shall have the right to file an application with the court for the protection of the rights of debenture holders.
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7.Holders of over 1/2 of the debentures of one specific issue shall have the right to:
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1)dismiss the bank or the brokerage firm protecting their interests and demand that the public limited liability company conclude an agreement with the bank or brokerage firm of their choice;
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2)bring to the notice of the bank or the brokerage firm protecting their interests that the violation committed by the public limited liability company in relation to the specific issue of debentures offered for public subscription is immaterial and therefore no special actions are needed to protect their interests (the provision shall not be applicable with respect to the violations committed by the public limited liability company in relation to debenture redemption and payment of interest).
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8.In the cases where the debentures issued by the public limited liability company are secured by a charge on the assets, the bank or the brokerage firm shall be considered as the holder of the security. It shall exercise the rights of the security holder for the benefit of all debenture holders. Third persons may offer the bank or brokerage firm surety or guarantee for the discharge of the company's obligations arising due to the issue of debentures. In the event of a default in the discharge of all or part of the obligations, the bank or the brokerage firm must transfer to the debenture holders the funds received from the third parties.
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9.If the debenture holder fails to present the debenture for redemption or does not claim interest within 3 years form the redemption date, he shall forfeit his right of claim to the above.
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10.Debentures shall be uncertificated and shall be represented by entries in the securities accounts of their holders. Requirements laid down for uncertificated securities shall be applicable to the accounting of debentures and of trading in debentures.
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11.Private limited liability companies shall be prohibited from issuing debentures.
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Article 57Convertible Debentures
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1.A public limited liability company may issue debentures which may be exchanged for shares of the company.
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2.The resolution to issue convertible debentures may be adopted by the General Meeting of the public limited liability company by an at least 2/3 majority vote. Where there are several classes of shares, the resolution to issue convertible debentures shall be adopted if approved of by an at least 2/3 majority vote of the holders of each class of shares taking a separate vote. If the resolution to issue convertible debentures contains a notice to the effect that the convertible debentures which are being issued may be converted into preference shares, the approval of the holders of preference non-voting shares adopted by an at least 2/3 majority vote shall also be necessary in order to pass the above resolution.
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3.The resolution of the General Meeting to issue convertible debentures shall at the same time be a resolution to increase the company's authorised capital by the sum equal to the aggregate amount of nominal value of shares which may be exchanged for convertible debentures.
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4.The resolution to issue convertible debentures and debenture subscription agreement shall contain the following information:
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1)the type, class, nominal value of the shares for which the convertible debentures may be exchanged;
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2)the rate at which the convertible debentures shall be exchanged for shares;
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3)time limit by which the holder of convertible debentures shall have the right to demand that the convertible debentures be exchanged for shares.
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5.Public limited liability companies with partly paid up authorised capital shall have no right to issue convertible debentures.
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6.The resolution to issue convertible debentures must be disclosed in the manner prescribed by law. The report of the Board of the public limited liability company on the results of issue of convertible debentures must also be disclosed in the manner prescribed by law.
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Article 58Acquisition of Shares or Convertible Debentures Issued by the Company by Exercising the Right of Pre-emption
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1.The shareholders of the company shall have the right to acquire on a pre-emptive basis the shares or debentures issued by the company in proportion to the nominal value of the shares owned by them on the day of the General Meeting which adopted the resolution to increase the authorised capital by additional contributions.
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2.The offer to acquire on a pre-emptive basis the shares or debentures of the public limited liability company and the time limit for exercising the right of pre-emption must be disclosed in the manner prescribed by law. Every shareholder of the private limited liability company must be notified against signature or by a registered letter of the possibility to subscribe for the shares issued by the company by exercising the right of pre-emption.
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3.The time limit within which the shareholder may acquire shares or convertible debentures by exercising the right of pre-emption may not be shorter than 30 days from the day of disclosure of the offer to the shareholders of the public limited liability company or from the day of sending of the notice or registered letter to the shareholders of the public limited liability company.
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4.The shareholders of the public limited liability company shall be entitled to assign, according to the procedure laid down by the Securities Commission, other persons their right of pre-emption to acquire the shares issued by the public limited liability company.
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5.The shareholders' right of pre-emption to acquire the shares or convertible debentures being issued by the company may be withdrawn by a resolution of the General Meeting adopted by an at least 3/4 majority vote. If the person or persons to whom the right of pre-emption to acquire the securities issued by the company are known to the General Meeting when the above resolution is being passed, the said persons and the number of shares or convertible debentures each of the persons may acquire shall be specified in the resolution.
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6.The Board of the company shall present a written report to the General Meeting at which the withdrawal of the right of pre-emption is to be discussed. The report must indicate the following:
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1)reasons for withdrawing the right of pre-emption;
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2)justification of the proposed issue price of securities;
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3)the person or persons to whom it is proposed to grant the right of pre-emption in acquiring said securities and the number of securities being issued which each of the above persons may acquire.
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7.The resolution of the General Meeting of the public limited liability company concerning the withdrawal of the shareholders' right of pre-emption in acquiring the shares or convertible debentures being issued by the company must be disclosed in the manner prescribed by law. A private limited liability company must notify every shareholder of such a resolution against his signature or dispatch the notification by registered mail.
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8.There may not be a partial withdrawal of right of pre-emption in acquiring shares or convertible debentures being issued by the company may.
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9.Withdrawal of the right of pre-emption shall not abolish the shareholders' right to acquire the shares or convertible debentures being issued by the company.
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CHAPTER SIX FINANCES AND DISTRIBUTION OF PROFIT
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Article 59Financial Resources of the Company
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1.The financial resources of the company shall be formed from the internal and external sources. Internal sources shall consist of profit, the external sources shall include contributions for shares, proceeds from debentures, grants and subsidies, borrowed funds and other equivalent funds.
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Article 60Audit of the Company
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1.At the close of the financial year, before the Annual General Meeting, the firm of auditors approved by the General Meeting must audit financial statements at all public limited liability companies.
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2.Paragraph 1 of this Article must be applied with respect to all private limited liability companies which satisfy at least two of the conditions listed below:
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1)sales income exceeds LTL 5 000 000 in the accounting financial year;
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2)the average number of pay-roll workers in the accounting financial year is not less than 50;
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3)the sum of assets shown in the balance sheet exceeds LTL 2 500 000.
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3.Every shareholder of the company or a group of shareholders shall be entitled to enter into a contract with the firm of auditors of his/their choice for auditing the activities and accounting documents of the company, ascertaining whether there are any indications of insolvency or fraudulent bankruptcy, whether or not the company's assets are being squandered, loss-yielding contracts are concluded, the rights of the shareholders are infringed, including an unwarranted payment of wages or application of relief or concessions (which resulted in the decrease in company profits or brought about losses to the company). The costs of the audit shall be covered by the shareholders who concluded the contract with the firm of auditors. If the auditor confirmed the facts stated in the shareholders' application, the company shall reimburse the shareholders the auditing costs, but not more than 1/4 of the amount of damage inflicted on the company or its shareholders. The shareholders shall not be reimbursed the costs of a repeat audit of the same matter. The Board of the company and the head of the Administration must ensure that all documents of the company necessary for audit which are specified in the contract with the firm of auditors are made available to the auditor.
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4.The audit shall be carried out in accordance with the legal acts regulating audit and the work of auditors.
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Article 61Profit (Loss) Appropriation
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1.The net after-tax profit (loss) made during the financial year must be appropriated by the Annual General Meeting, approving the annual financial statements. It shall be prohibited to change (reappropriate) the profit (loss) appropriation approved by the General Meeting before the next Annual General Meeting.
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2.When distributing the profit, the General Meeting shall appropriate the total amount of the result (profit or loss) to be appropriated, amounts to be transferred from reserves, taking into account the provisions of other Articles of this Law, and the shareholders contribution against losses. If the amount is a positive quantity, the amount deductible to the legal reserve under paragraph 4 of this Article shall be subtracted therefrom first of all, whereas the remaining part may be appropriated by the General Meeting for the purposes specified in subparagraphs 7, 8, 9 and 10 of paragraph 3 of this Article and for supplementing the legal reserve. If the amount referred to in the first sentence of this paragraph is a negative quantity, it shall be carried forward to the next year as the result to be carried forward or the authorised capital of the company shall be reduced.
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3.The resolution concerning the appropriation of net profit (loss) shall indicate:
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1)result - profit (loss) brought forward from the previous year at beginning of the financial year;
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2)current year net result - profit (loss);
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3)result - profit (loss) to be appropriated;
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4)transfers from reserves;
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5)shareholders contribution against losses (if the shareholders decide to cover all or part of the profit(loss) to be appropriated);
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6)appropriation of profit to legal reserve;
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7)appropriation of profit to other reserves;
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8)appropriation of profit for the payment of dividend;
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9)other instances of profit appropriation: payment of annual bonuses to Board and Supervisory Board members, payment of incentives to workers and other allocations;
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10)result - profit (loss) to be carried forward to the next financial year.
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4.If the sum total of the legal reserve and share premium is less than 1/10 of the authorised capital, deductions to the legal reserve shall be mandatory and may not be less than 1/20 of profit to be appropriated or in the amount which would allow the legal reserve to reach the amount of 1/10 of the authorised capital.
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5.The amount appropriated for the payment of annual bonuses for the Board and Supervisory Board members, incentives for workers and other allocations ( subparagraph 9 of paragraph 3 of this Article) may not exceed 1/5 of the net profit. The share of profit appropriated for the payment of annual bonuses for the Board and Supervisory Board members and incentives for workers may not exceed the sum appropriated for the payment of dividends.
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6.Incentives for workers may be paid by advance payments every quarter provided that a sufficient amount of profit is anticipated based on the current results of economic activities. Advance payment of bonuses to the Board and Supervisory Board members shall be prohibited.
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7.Payment of dividends, annual bonuses to the Board and Supervisory Board members and incentives for workers shall be prohibited in case of failure by the company to pay taxes prescribed by law within the set time limits or to make settlement with the agricultural producers for the produce sold within the financial year for which the distribution is made.
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8.If the Annual General Meeting refuses to distribute the profit or to adopt a resolution concerning profit appropriation, the Board of the company must within 30 days from the Meeting appropriate the profit according to the following rules:
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1)the share of profit appropriated for legal reserve, for other reserves shall be the share of profit which has been used for the acquisition of fixed assets and financial assets in the financial year the profit for which is being distributed;
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2)the balance of the profit to be appropriated shall be divided into two equal parts: one for the payment of dividends, the other - to be carried forward to the next financial year.
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Article 62Dividends
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1.The dividend is the share of the profit appropriated for the shareholder, which is proportionate to the nominal value of the shares owned by him. If a share is not fully paid, the shareholder's dividend shall be reduced in proportion to the unpaid amount of the share price. If the share is not fully paid and the time limit for payment has expired, the dividend shall not be paid. The Articles of Association may establish that the dividend on fully paid share shall be reduced if the last instalment of their price was paid in the financial year for which the dividend is appropriated.
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2.Dividends declared by the General Meeting shall be the company's liability to its shareholders. The shareholder shall have the right to claim payment of the dividend as the company’s creditor. The company shall have the right to recover the dividend paid out to the shareholder if the shareholder knew of the irregularity of the distribution made to him or could not have been unaware of it.
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3.The General Meeting shall be prohibited from declaring and paying out dividends if the company's equity capital is or, following such a distribution, would become lower than the amount of the authorised capital plus those reserves which may not be distributed plus the deferred costs or if the company is insolvent or if it would become insolvent after the payment of dividends. The reserves which may not be distributed shall comprise the legal reserve plus the sum of share premium amounting up to 1/10 of the authorised capital, other reserves not available for distribution, the revaluation reserve and a part of the reserve for purchasing own shares, amounting to the aggregate value of own shares acquired by the company.
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4.If the company's balance sheet shows losses, the General Meeting shall have no right to declare and pay out dividends until the offsetting of the losses or reduction of the authorised capital by reason thereof. The resolutions concerning the offsetting of the losses or reduction of the authorised capital by the amount of the losses and regarding the declaration and payment of dividends may be adopted at the same Meeting. Dividends may be paid out to the shareholders only after the losses have been offset or the authorised capital has been reduced by the amount of the losses.
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5.The company must pay out the dividends no later than 3 months after the day of adoption of the resolution on profit appropriation, except for the case provided for in paragraph 3 of this Article. Payment of dividends in advance shall be prohibited.
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6.The company shall pay out dividends in cash.
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7.Persons, who were members of the company on the day when the General Meeting declared the dividends, shall be entitled to the dividend.
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CHAPTER SEVEN REORGANISATION OF THE COMPANY
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Article 63Reorganisation of the Company
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1.Companies may be reorganised by way of merger, division or restructuring.
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2.Merger of companies may be effected by:
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1)merger by acquisition - the operation whereby one or more companies transfer to another company all their assets and liabilities and cease to exist as legal persons after the reorganisation;
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2)merger by the formation of a new company - the operation whereby a new company is formed from the companies which cease to exist as legal persons after the reorganisation.
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3.Division of companies may be effected by:
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1)division by acquisition - the operation whereby after being wound up without going into liquidation following the reorganisation, the company transfers all its assets and liabilities to more than one company which continue their activities;
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2)division by formation of new companies - the operation whereby new companies are formed out a company which ceases to exist after the reorganisation;
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3)unbundling - the operation whereby a part is separated from a company which is retained as a going concern and a new company is formed from the part which has been separated.
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4.A company may be restructured in the following ways:
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1)by restructuring a private limited liability company into a public limited liability company - the Articles of Association of the company shall be revised and the shares of the company shall be registered with the Securities Commission;
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2)by restructuring a public limited liability company into a private limited liability company - the Articles of Association of the company shall be revised and the registration of the shares with the Securities Commission shall be cancelled.
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5.A company may be reorganised only after its authorised capital has been fully paid up (at the price of the last issue of shares).
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6.A company which has been put into liquidation may not be reorganised.
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7.Liquidation procedure shall not be applied to companies which cease to exist after the reorganisation.
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Article 64Exchange of Shares in the Course of Reorganisation
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1.In the course of reorganisation of the companies by merger or division, the shares of the companies which are to be wound up must be exchanged for the shares in the new companies which will operate after the reorganisation, except in the cases specified in paragraph 4 of this Article. When the company is reorganised by applying the method of unbundling, a part of the shares of the company which is being divided shall be exchanged for the shares in the newly formed company.
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2.The shares in the recipient companies which will operate after the reorganisation may be allocated to the shareholders of the companies which will cease to exist after the reorganisation in proportion to the authorised capital of the company under reorganisation or otherwise.
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3.Where shares in the recipient companies are allocated to the shareholders of the company being divided otherwise than in proportion to their rights in the authorised capital of that company, the minority shareholders of that company (those who voted against or abstained when the resolution to reorganise the company was put to the vote) shall have the right to demand, within 45 days after the approval of the draft plan of reorganisation at the General Meeting, that their shares be purchased by the company being divided before the completion of reorganisation. The provisions of Article 55 of this Law shall not apply to such purchase of shares. Paragraph 4 of this Article shall be applicable to the purchased shares.
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The price paid for the shares being purchased must correspond to the value of shares held by the shareholder in the company being divided. The price shall be determined taking into account the average market price of the shares for a 6-month period immediately preceding the approval of the draft plan of reorganisation or, in case of division of a private limited liability company or a public limited liability company the shares whereof have not been in public trading within the period of 6 months immediately preceding the approval of the draft plan - according to the results of valuation of assets of the company being divided. Disputes concerning the amount of the consideration for shares shall be determined by a court. If the nominal value of the shares demanded to be purchased amounts to over 1/10 of the authorised capital of the company being divided, the reorganisation of the company under the approved draft plan of reorganisation may not be continued.
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4.The shares of the company which ceases to exist after the reorganisation or of the company reorganised by the method of unbundling may not be exchanged for the shares in the company which will operate after the reorganisation if the shares have been acquired by:
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1)the company which ceases to exist after the reorganisation or the company which is being reorganised by unbundling;
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2)the company which will operate after the reorganisation.
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5.When shares are exchanged for new shares in the companies which will operate after the reorganisation, the shareholders of companies which cease to exist after the reorganisation or the shareholder of the company reorganised by unbundling may be paid the difference in the share price in cash. The payment in cash may not exceed 10% of the nominal value of the new shares in the companies which will operate after the reorganisation, allocated to the shareholders.
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Article 65Taking over of the Assets, Rights and Liabilities of the Companies being Reorganised
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1.The companies newly formed in the course of reorganisation and the companies which will continue its activities after the reorganisation shall be the successors to all the assets, rights and liabilities of the reorganised companies. The assets, rights and liabilities shall be allocated to the companies under the draft plan of reorganisation, at the same time specifying the time limits within which they will be taken over.
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2.Where an asset of the company being divided is not allocated by the draft plan of reorganisation to any of the companies, which will operate after the reorganisation, the asset and the proceeds from the sale thereof shall be taken over by all the companies which will operate after the reorganisation in proportion to the share of equity capital allocated to each of those companies under the draft plan of reorganisation.
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3.Where a liability of the company being divided is not allocated under the draft plan of reorganisation to any of the companies which will be operating after the reorganisation, each of these companies shall be jointly and severally liable for it. Such joint and several liability of each company shall be limited to the amount of the equity capital allocated to each company under the draft plan of reorganisation.
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4.Where a liability of the company being divided is allocated under the draft plan of reorganisation to one of the companies which will operate after the reorganisation, the said company shall be first of all liable for it. In case it fails to discharge the liability or a part thereof, all the other companies which will operate after the reorganisation shall be jointly and severally liable for it (or for the undischarged part thereof). Such joint and several liability of each company shall be limited to the amount of equity capital allocated to each company under the draft plan of reorganisation.
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5.If a company which will cease existence after the reorganisation has issued debentures which are not due for redemption before the date of completion of reorganisation, the debentures must be exchanged for the debentures of public limited liability companies specified in the draft plan of reorganisation which will operate after the reorganisation. The debentures must give their holders rights at least equivalent to the rights they possessed before the reorganisation of the public limited liability company. If they are exchanged for debentures conferring their holders less rights, the public limited liability company for whose debentures they are exchanged must redeem the debentures of the debentures holders who so desire. The debentures must be redeemed if so demanded by the bank or brokerage firm representing the interests of the debenture holders. The debentures must be redeemed within 2 months from the completion of reorganisation, but not later than by their redemption date fixed in the agreement to issue debentures.
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Article 66Draft Plan of Reorganisation
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1.The company ,may be reorganised only according to the draft plan of company reorganisation. The plan must state the following:
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1)method of reorganisation;
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2)the name, type and registered office of every company being reorganised and of a new company formed in the course of reorganisation;
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3)the ratio at which the shares of the companies being reorganised are exchanged for new shares, taking into account the difference in prices, substantiation of the ratio, the number of new shares according to types and classes and their nominal value;
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4)the rules of allocation to the shareholders of the company being divided of shares in the new companies which will operate after the reorganisation;
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5)the procedure and time limits of issue of new shares;
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6)the difference in the price of the shares owned by the shareholders and the shares allocated after the reorganisation which will be paid out in cash;
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7)the date from which the shareholders of the company which will cease its existence shall become entitled to participate in profits of the company which will operate after the reorganisation and any special conditions affecting that entitlement;
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8)the date from which the transactions of the company which ceases to exist after the reorganisation shall be treated for accounting purposes as being those of the company which will operate after the reorganisation;
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9)the rights conferred by the company which will operate after the reorganisation to the holders of shares of certain classes and debentures, other measures provided for in respect of the said persons;
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10)in case of the division by formation of new companies - the precise description of the assets, rights and liabilities of the company being divided and allocation thereof to the companies which will operate after the reorganisation;
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11)special rights, if such are provided for, conferred upon the members of the management bodies of the companies being reorganised, who participate in the reorganisation;
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12)the terms and conditions upon the fulfilment whereof the reorganisation may be completed (the companies being reorganised and the new companies formed in the course of the reorganisation may transmit to the administrator of the Register the documents required for the registration of the revised Articles of Association of the reorganised companies, cancellation from the Register of the companies which cease to exist after the reorganisation, entering in the Register the newly formed companies);
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13)the procedure for convening the first General Meetings of shareholders of the companies which will operate after the reorganisation;
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14)the anticipated economic indicators of the companies which will operate after the reorganisation.
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2.In case of merger or division of companies the draft plan of reorganisation may be prepared only after the valuation of the assets of the companies being reorganised has been made by the valuers of assets and assets valuation reports have been draw up. The report on the valuation of assets of the public limited liability company must be disclosed in the manner prescribed by law no later than 30 days before the General Meeting, which has the issue of the company reorganisation on its agenda.
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3.The Articles of Association of every company which will operate after the reorganisation must be drawn up together with the draft plan of reorganisation and shall be a constituent part of the draft plan of reorganisation.
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4.The draft plan of reorganisation may be proposed and the procedure of reorganisation may be initiated in the company by the holders of shares in the company the nominal value whereof accounts for no less than 1/3 of the authorised capital, the Supervisory Board and the Board.
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Article 67Assessment of the Draft Plan of Reorganisation
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1.The draft plan of reorganisation must be assessed. The draft plan of reorganisation shall be assessed by the firm of auditors with which the Board of the company shall conclude a contract for the assessment of the draft plan of reorganisation.
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2.The companies being reorganised must submit to the firm of auditors all information and documents, also present all computations and explanations requested by the firm of auditors, which are necessary in order to assess the draft plan of reorganisation.
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3.The firm of auditors must draw up a report on the assessment of the draft plan of reorganisation which shall contain:
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1)conclusions on whether the share exchange ratio is correct and justified;
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2)methods applied for determining the share exchange ratio and conclusions on the suitability of the methods for establishing the value and their impact thereon;
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3)description of any special valuation difficulties which have arisen.
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4.The report on the draft plan of reorganisation must be drawn up and submitted to the company no later than 30 days before the General Meeting, which has the issue of the company reorganisation on its agenda.
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Article 68Report of the Board
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The Board of every company being reorganised shall no later than 30 days before the General Meeting, the agenda whereof contains the issue of the company reorganisation, draw up a report explaining the terms of reorganisation laid down in the draft plan of reorganisation and setting out the legal and economic grounds for them, in particular the share exchange ratio and the criterion determining allocation of shares. The report of the Board shall also describe any assets valuation difficulties which have arisen. The report must present information of the drawing up of reports prescribed by paragraph 2 of Article 66 of this Law and about the administrators of the Register of Enterprises as well as files in which the reports are deposited.
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Article 69Notification of the Planned Reorganisation
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1.Every company being reorganised must notify every creditor of the company against his signature or by a registered letter of the planned reorganisation of the company. In addition, every company being reorganised must announce of the planned reorganisation in the periodical publication specified in the Articles of Association or notify every shareholder of the company thereof against his signature or by a registered letter. The draft plan of the company reorganisation must be disclosed in the manner prescribed by law. All the above must be performed not later than 30 days before the General Meeting, which has the issue of the company reorganisation on its agenda.
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2.No later than 30 days before the General Meeting, one of the items on the agenda whereof is the approval of the draft plan of company reorganisation, every shareholder must be provided an opportunity to have access, at the registered office of every company being reorganised to:
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1)the draft plan of reorganisation;
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2)the annual financial statements of the companies being reorganised for the period of three preceding years;
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3)financial statements of the public limited liability companies being reorganised, drawn up on the basis of the data, not older than of the first day of the third month before the General Meeting, which has the company reorganisation on its agenda, if the last financial statements had been drawn up for the financial year which ended more than 6 months before the Meeting;
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4)reports prescribed by paragraph 2 of Article 66 and Article 67 of this Law;
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5)reports drawn up by the Boards of the companies being reorganised, prescribed by Article 68 of this Law.
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3.The financial statements specified in subparagraph 3 of paragraph 2 of this Article must be drawn up according to the same methodological principles as those applied for drawing up the last annual financial statements.
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4.At the shareholder's request the company must make copies of the documents specified in paragraph 2 of this Article available to him free of charge.
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5.The Board of the company being reorganised must inform the General Meeting of the material changes in the assets, rights and liabilities in the period between the drawing up of the draft plan of reorganisation and the General Meeting. The Board of every company being reorganised must notify the Boards of other companies being reorganised of the material changes in the assets, rights and liabilities so that the latter would be able to notify thereof the General Meetings of the companies.
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Article 70Adoption and Announcement of the Resolution to Reorganise the Company
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1.The draft plan of reorganisation may be approved and the resolution concerning the reorganisation of the company may adopted by the General Meeting by an at least 2/3 majority vote. Where there are several types and classes of shares, the decision shall be subject to a separate vote for each type and class of shareholders and the draft plan of reorganisation shall be adopted by a majority of not less than 2/3 of the votes of the holders of every type and class of shares (also of non-voting shares).
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2.The approved draft plan of reorganisation of every company shall be submitted to the administrator of the Register of Enterprises of the Republic of Lithuania no later than within 10 days after the day of the Meeting which approved the draft plan.
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3.The resolution on the reorganisation of the company shall be disclosed in the manner prescribed by law.
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Article 71Provision of Additional Safeguards for the Discharge of Obligations to Creditors of Companies being Reorganised
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1.In the course of reorganisation the company must provide additional safeguards for the discharge of obligations to every creditor of the company who so requests, whose claims antedate the disclosure of the draft plan of reorganisation of the company.
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2.The creditors of the company may file their claims within 2 months after the disclosure of the resolution to reorganise the company.
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3.The company may dispense with the provision of additional safeguards for the discharge of obligations if the discharge of the company's obligations to creditors is adequately secured being protected by unfailing safeguards - pledge, suretyship or guarantee. Disputes concerning the provision of additional safeguards shall be settled in court.
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4.Documents relating to the registration of the companies which will operate after the reorganisation or of their Articles of Association and documents concerning the cancellation from the register of the companies which will cease to exist after the reorganisation may not be submitted to the administrator of the Register of Enterprises until additional safeguards for the discharge of obligations have been provided to the creditors who so request or until the effective date of the court order that the creditors' claims for additional safeguards for the discharge of obligations must not be satisfied.
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Article 72Completion of Reorganisation
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1.The Articles of Association of every company which will operate after the reorganisation shall be submitted to the administrator of the Register of Enterprises after the first General Meeting but not earlier than 3 months after the disclosure of the resolution to reorganise the company. The minutes of the General Meeting which approved the draft plan of reorganisation (or the minutes of these Meetings) shall be submitted for the registration of the company or its Articles of Association after the reorganisation instead of the Memorandum of Association.
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2.The first General Meeting of the company which will operate after the reorganisation may be attended with the right to vote by both the current shareholders of the company and the shareholders of the reorganised company who have been allocated shares in the company under the draft plan or reorganisation.
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3.The first General Meeting of the company which will operate after the reorganisation may amend or supplement the Articles of Association of the company and address other issues assigned to the competence of the General Meeting. The General Meeting of a new company formed through reorganisation must elect the management bodies of the company.
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4.The minutes of the General Meeting which approves amendments to the Articles of Association of the company reorganised from the private limited liability company into a public limited liability company must also contain the following information:
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1)the capital paid up before the day of the General Meeting;
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2)where not more than 5 years have lapsed from the day of incorporation of the private limited liability company, the costs of incorporation of the private limited liability company.
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5.In case of a merger, the Articles of Association of the company which will operate after the reorganisation may be registered only after all the companies which will cease to exist after the reorganisation have submitted to the administrator of the Register documents necessary in order to cancel the enterprises from the Register of Enterprises of the Republic of Lithuania. In this case it will be noted in the Register of Enterprises of the Republic of Lithuania that the enterprises which will cease their existence after the reorganisation will be cancelled from the Register as from the day of registration of the Articles of Association of the company which will operate after the reorganisation. Reorganisation by way of merger of companies shall be deemed completed as from the day.
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6.In case of a division, except when the division is effected by way of unbundling, the company which will cease to exist after the reorganisation may be cancelled from the Register of Enterprises of the Republic of Lithuania only after the administrator of the Register has been submitted the Articles of Association and other documents of all the companies which will operate after the reorganisation, necessary in order to register the companies and/or their Articles of Association and after the administrator of the register of each of the said companies states that the company and/or its Articles of Association may be registered. In this case it will be noted in the Register of Enterprises of the Republic of Lithuania that the registration of the companies which will operate after the reorganisation and/or of their Articles of Association shall come into force from the day the company being divided is cancelled from the Register of Enterprises of the Republic of Lithuania. The reorganisation of the companies by way of division shall be deemed completed as from the day.
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7.In case of division by way of unbundling the amendments to the Articles of Association of the company being divided may be registered only after the administrator of the Register of Enterprises has been submitted the Articles of Association of the newly formed company and other documents necessary for registering the company. In this case it shall be noted in the Register or Enterprises of the Republic of Lithuania that the registration of the newly formed company and of its Articles of Association shall become effective as from the day of registration in the Register of Enterprises of the Republic of Lithuania of amendments to the Articles of Association of the company being divided. The reorganisation by way of unbundling of the companies shall be deemed completed as from the day.
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8.Reorganisation by way of restructuring the company shall be deemed completed as from the day of registration of the amended Articles of Association of the company.
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9.From the day of completion of reorganisation all the assets, rights and liabilities of the companies which will cease their existence shall be the assets, rights and liabilities of the companies which will operate after the reorganisation.
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10.A notice about the completion of reorganisation of every company and of the formation of a new company through reorganisation shall be publicly announced in the manner prescribed by law.
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11.Members of the management bodies of the company being reorganised and the firm of auditors which made the valuation of the draft plan of reorganisation must compensate, in the manner prescribed by law, for the damage caused during the reorganisation through their fault to the shareholders and creditors of the company being reorganised.
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12.If the resolution of the General Meeting to reorganise the company is appealed to the court on the basis of provisions of Article 31 of this Law, the reorganisation must be suspended and may not be completed until the court order becomes effective. If the court vacates the resolution of the General Meeting to reorganise the company, the reorganisation shall be terminated after the court order becomes effective.
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13.Upon its completion the reorganisation shall not be declared invalid.
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Article 73Merger by Acquisition by a Company which owns at least 90% of shares in the Company being Acquired
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1.Subparagraphs 3-8 of paragraph 1 and paragraph 2 of Article 66, Articles 67 and 68, subparagraphs 4 and 5 of paragraph 2 of Article 69, paragraph 1 of Article 70 of this Law shall not be applicable to merger by acquisition, where the company which will continue its operations after the reorganisation holds all shares in the company being acquired.
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2.Articles 67 and 68, subparagraphs 4 and 5 of paragraph 2 of Article 69 and paragraph 1 of Article 70 of this Law shall not be applicable to merger by acquisition where the company which will continue its operation after the reorganisation holds not less than 90% but not all the shares in the company being acquired. In this case, if other shareholders of the company being acquired so request, the company must purchase their shares before the completion of the reorganisation. The provisions of paragraph 3 of Article 64 shall apply with respect to the purchase of shares.
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3.In the cases of reorganisation provided for in paragraphs 1 and 2 of this Article the resolution to reorganise the company which continues to operate after the reorganisation and the company being acquired may be adopted by a simple majority vote by the General Meeting of the company which continues to operate after the reorganisation. A notice of the reorganisation of every company being acquired must be communicated, as prescribed by paragraph 1 of Article 69 of this Law, not later than 30 days before the said General Meeting.
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Article 74Restructuring of the Company
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1.Article 64, subparagraphs 3-8 of paragraph 1 of Article 66, Articles 68 and 71 of this Law shall not be applicable with respect to the company restructuring.
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2.Unless demanded by the shareholders by simple majority vote, the assessment of the draft plan of reorganisation shall not be mandatory when the company is being restructured.
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3.When the company is being restructured, the General Meeting which adopts the resolution on the reorganisation of the company shall at the same time be the first General Meeting of the company which will operate after the reorganisation.
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4.When a private limited liability company is being restructured into a public limited liability company, its authorised capital must be not less than the amount prescribed for the public limited liability companies by paragraph 4 of Article 2 of this Law.
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5.When a public limited liability company is being restructured into a private limited liability company, the number of its shareholders may not be larger than that set for the private limited liability companies by paragraph 5 of Article 2 of this Law.
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6.A private limited liability company may be restructured into a public limited liability company provided that the contributions for shares made otherwise than in cash, received by the company within the 5-year period before the adoption of the resolution, have been valued in the manner prescribed by the laws and other legal acts of the Republic of Lithuania, which regulate assets valuation, and valuation reports have been drawn up. Requirements prescribed by paragraph 7 of Article 10 of this Law shall be set for the assets valuation reports.
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7.Where not more than 5 years have elapsed after the incorporation of the private limited liability company, it may be restructured into a public limited liability company, provided that its assets, acquired within the period, which used to belong to its incorporators, where the sum of a separate transaction amounts to not less than 1/10 of the minimum amount of the authorised capital of the public limited liability company prescribed by this Law and not less than 1/10 of the amount of the company's authorised capital, has been valued in the manner prescribed by the laws and other legal acts of the Republic of Lithuania, regulating assets valuation and reports on the valuation of the assets have been drawn up. The requirements prescribed by paragraph 2 of Article 15 of this Law shall be set for the assets valuation reports.
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8.The procedure established by law for disclosing relevant reports drawn up for public limited liability companies must be applied for disclosing reports provided for in paragraphs 6 and 7 of this Article.
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9.If a public limited liability company which is being restructured into a private limited liability company has issued debentures which are not due for redemption before the day of completion of the restructuring, the debentures must be redeemed. The private limited liability company which will operate after the restructuring must redeem the debentures within 2 months after the completion of restructuring but not later than their redemption date fixed in the resolution to issue debentures.
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CHAPTER EIGHT LIQUIDATION OF A COMPANY
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Article 75Grounds for the Liquidation of a Company
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1.A company may be liquidated on the following grounds:
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1)the time period of the company's duration as specified in the Articles of Association has expired;
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2)the court or the creditors' meeting has passed a resolution to liquidate a bankrupt company. In this case the company shall be liquidated in accordance with the procedure established by the Enterprise Bankruptcy Law of the Republic of Lithuania ;
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3)the court has made an order to liquidate the company for the violations of law established by the laws of the Republic of Lithuania;
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4)the court has ruled that the incorporation of the company is unlawful;
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5)the General Meeting has adopted a resolution to liquidate the company.
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2.The company may be ruled unlawfully founded if:
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1)all the incorporators were legally incompetent at the moment of incorporation of the company;
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2)there was a violation of the compulsory rules laid down in this Law for the setting up of a legal entity;
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3)the objects of the company specified in the Articles of Association are unlawful or are against the public order;
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4)the minimum authorised capital has not been formed in the manner and within the time limit prescribed by this Law;
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5)the name of the company, the amount of the authorised capital are not specified in the Memorandum of Association or the Articles of Association, the objects of the company are not indicated in the Articles of Association.
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3.The ruling that the company has been founded unlawfully shall be without prejudice for the validity of contracts entered into by the company.
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4.Having established the violations specified in paragraph 2 of this Article, the court may by its order set the time limit for the elimination of violations. If the company fails to eliminate the violations within the set time limit, the company shall be liquidated by the order of the court.
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5.The General Meeting may not adopt a resolution to liquidate an insolvent company.
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Article 76Liquidation of the Company
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1.The General Meeting or the court, having decided, in the manner prescribed by this Law, to liquidate the company, shall elect(appoint) or remove from office (replace) the company liquidator. If, in the case established in subparagraph 1 paragraph 1 Article75 of this Law, the General Meeting fails to elect the liquidator by the date of termination of the company’s activities specified in the Articles of Association of the company, the liquidator shall be appointed as per court decision. In such an event the shareholders of the company shall have the right to apply to court. If case of failure by the shareholders to apply to court within 6 months from the date of termination of the company’s activities the company shall be deemed to have been set up as a company of unlimited duration.
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2 If the company is being liquidates in the manner laid down in this Law, the liquidator shall acquire his rights and obligations from the day of his appointment, whereas the management bodies of the company, except for the General Meeting, shall be divested, as of the day of the liquidator's appointment, of the powers to manage the company. The right to call the General Meeting according to the procedure established in Articles 26, 27 and 28 of this Law shall be vested in the liquidator, the court or the holders of shares carrying over 1/2 of all votes.
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3.The liquidator shall notify the administrator of the Register of Enterprises of the decision to liquidate the company and submit his own personal particulars. The name of the company which has acquired the status of a company in liquidation shall be preceded by the words \"in liquidation\".
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4.Every creditor of the company must be informed about the liquidation of the company against his signature or by a registered letter. In addition, a notice of the company liquidation must be announced in the periodical publications specified in the Articles of Association or communicated to every shareholder of the company against his signature or by a registered letter. The resolution to liquidate the company must be disclosed in the manner prescribed by law.
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5.During the company liquidation the persons who have subscribed for shares but have not yet fully paid them up must pay up the shares according to the procedure laid down in the share subscription agreement. In case the court has ruled that the company being liquidated has been founded unlawfully, provided that the company is in the position to discharge its liabilities to creditors, the persons who subscribed for shares may be released from payment of the amount of unpaid contributions which they would be repaid in the course of the distribution of assets of the company in liquidation.
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6.Before the liquidated company is cancelled from the Register, mandatory payments into the budgets and funds must be made and settlement with the company creditors and workers must be effected in accordance with the sequence of satisfaction of claims established by law, thereafter the accrued dividend to the holders of cumulative preference shares shall be paid. Before the company is cancelled from the Register, the remaining assets of the company in liquidation shall be distributed to the shareholders pro rata to the nominal value of the shares owned by them. The assets of the company which come to be known later shall also be distributed in an analogous manner. If the shares of the company carry different rights, this must be taken into account when distributing the assets.
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7.The distribution of the company's assets to the shareholders may be carried out only upon the expiry of two months after the performance of all actions prescribed by paragraph 4 of this Article.
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8.If disputes arise about the payment of the company's debts, the assets of the company may not be distributed to the shareholders until the disputes are decided by the court and settlement with creditors is effected.
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9.After the company liquidator effects settlements with at least one shareholder (allocates and transfers to the shareholder part of the remaining assets of the company), the General Meeting of the company in liquidation shall forfeit the right to discontinue the liquidation of the company.
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Article 77Powers of the Liquidator
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1.The liquidator shall have the rights and obligations of the company's Board and head of the Administration. The liquidator shall represent the company in liquidation in the court, in the company's relations with the institutions of State government and administration, other natural and legal persons. The same requirements as those established for the head of the Administration shall also be applied with regard to the liquidator.
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2.The liquidator of the company shall:
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1)make a stock-taking of material and financial valuables and draw up the act of receiving same, draw up the company’s financial statements as of the beginning of the liquidation period (the liquidation balance sheet);
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2)complete the discharge of the obligations under contracts concluded previously and enter into new transactions according to his competence. The General Meeting or the court, who elected (appointed) the liquidator may specify the contracts unrelated to liquidation which may be entered into by the liquidator;
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3)fulfil contracts with the creditors and debtors of the company;
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4)sell the assets of the company;
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5)terminate the contracts of employment with the company workers and settle with them;
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6)distribute the remaining assets of the company to and among the shareholders;
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7)draw up the company liquidation act; and
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8)apply to the Securities Commission with a request to strike the shares off the Register (annul the registration of the shares) if a public limited liability company is put in liquidation;
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9)transfer the documents of a liquidated company for safekeeping in accordance with the procedure established in the Law on Archives;
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10)submit the documents required in order to have the liquidated company struck off the Register of Enterprises of the Republic of Lithuania to the administrator of the Register of Enterprises.
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3.If the liquidation of the company lasts for several years, within 3 months of the end of each business year the liquidator shall draw up the annual financial statement and the liquidation report. The report shall be subject to approval by the General Meeting. These documents shall be open for review to all the shareholders and creditors.
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4.The liquidator shall be liable to the company, the shareholders and the third persons for the losses incurred through his fault.
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5.Shareholders who own shares the total nominal value whereof amounts to at least 1/10 of the authorised capital shall have the right to appeal to court to replace the liquidator.
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6.The resolution concerning temporary substitution for the liquidator when he is on vacation or at the time of his temporary disability shall be adopted by the General Meeting or the court which have taken a decision, in accordance with the procedure laid down in this Law, to liquidate the company.
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CHAPTER NINE FINAL PROVISIONS
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Article 78Entry into Force of the Law
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1.This Law shall enter into force as of 1 January 2001.
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2.From the moment of entry into force of this Law the Companies Law of the Republic of Lithuania (Žin., 1994, Nr. 55-1046, Nr.102-2050; 1995, Nr. 21-492, Nr.41-993, Nr. 107-2393; 1996, Nr.1-4, Nr.100-2257, Nr. 126-2947; 1997, Nr. 69-1739; 1998, Nr. 36-961, Nr. 115-3246; 1999, Nr. 86-2562; 2000, Nr. 28-760) shall apply only for:
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1)incorporation of the companies the Memoranda of Association whereof were drawn up before the date of entry into force of this Law;
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2)increasing, decreasing the authorised capital of the companies, also when reorganising and liquidating the companies, if the resolutions on the increase, decrease of the authorised capital of the companies, or the resolutions on the reorganisation or liquidation of the company were adopted prior to the entry into force of this Law.
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Article 79Final Provisions
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1.The public limited liability companies and private limited liability companies must amend their Articles of Association according to this Law and have them registered according to the procedure established by the Law on the Register of Enterprises within 24 months of the effective date of this Law. In the companies in which judicial or extrajudicial bankruptcy procedure is applied the time period specified above shall run from the day of termination of the bankruptcy proceedings or the completion of the extrajudicial bankruptcy procedure.
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2.Public limited liability companies the authorised capital whereof is below the minimum authorised capital prescribed by this Law must increase their authorised capital to the required amount within 24 months from the date of entry into force of this Law. Public limited liability companies which fail to comply with this requirement shall be reorganised or liquidated in the manner prescribed by the laws of the Republic of Lithuania.
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3.From the date of entry into force of this Law former shares of the agricultural producers shall be considered as ordinary registered shares.
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4.From the date of entry into force of this Law, it shall be prohibited to newly grant the special share status to the share(shares) owned by the State or municipality, except in the cases where the granting of the special share status before the effective date of this Law has been announced in the privatisation programme.
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5.Seeking to avoid the institution of bankruptcy proceedings, the company shall be entitled to offer, in the manner prescribed by the Government of the Republic of Lithuania, their shares and assets in order to settle their debts to the State, municipal or state social security budgets. The Government, municipality or state social insurance board shall have the right to consider the issue of settlement in shares and assets until 31 December 2001.
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6.The company may reduce the authorised capital until 31 December 2001 in order to rectify, in the manner prescribed by the Government of the Republic of Lithuania, the errors of made in the course of authorised capital formation or increase (provided that the shareholders, the number of whose shares is being reduced, give their written consent), also for the purpose of transferring production and engineering infrastructure facilities, social objects, buildings (parts thereof) into the ownership of the State or municipality for discharging their functions. In such case the number of shares owned by the State or municipality shall be reduced accordingly, except if upon the reduction of the authorised capital the State or municipality which had over 1/2 of all votes would as a result have 1/2 or less than 1/2 of all votes. In such case paragraph 5 of Article 54 of this Law shall not be applicable.
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7.The Securities Commission shall have the right to adopt legal acts specifying a detailed procedure for the issue, offering for subscription and redemption of debentures issued by public limited liability companies, having established additional requirements for the bank or brokerage firm representing the interests of debenture holders, also providing additional regulation of the terms of issuing convertible debentures and debentures granting their holders the right to exchange them for other securities issued by the public limited liability company.
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Article 80Proposals to the Government
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1.The Government shall, by 1 January 2001:
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1)submit to the Seimas a draft law providing for the responsibility of companies for violations specified in paragraphs 1 and 2 of Article 79 of this Law;
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2)establish the procedure of representing the shares owned by the State.
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2.The Government or the institution authorised by it shall lay down the procedure of accounting of shares in private limited liability companies by 1 December 2000.
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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