Lithuanian Corporate Newsflash - March 2013
Jei norite Lietuvos įmonių teisės naujienlaiškį skaityti lietuvių kalba, spauskite čia: In Lithuanian
The Corporate Newsflash is intended as a reminder of the procedure for organisation of the upcoming ordinary (annual) General Meeting of Shareholders, as well as authorisations of the Management Board and/or Supervisory Council.

  Algirdas Pekšys
   
 
Algirdas Pekšys
Partner
algirdas.peksys@sorainen.com
   
  Agnietė Žukauskaitė
   
 
Agnietė Žukauskaitė
Associate
agniete.zukauskaite@sorainen.com
   
Dear clients and cooperation partners,

With this newsflash we would like to remind you about the following issues, which at first sight may seem self-evident, but in practice are often forgotten.

Convening the Annual General Meeting of Shareholders

Under the Company Law, the Management Board (when a Management Board is not formed – the Managing Director) should convene a regular (annual) General Meeting of Shareholders (AGM) for approval of the company’s annual financial accounts, not later than four months after the end of financial year (three months for companies that carry out certain activities, such as financial institutions). Thus, if the financial year of your company coincides with a calendar year, the regular AGM for approval of annual financial accounts for 2012 should be convened on or before 30 April 2013.

The AGM must be convened following the requirements established by the Company Law and the Articles of Association of the company. Notice of the AGM must be published in the daily press as indicated in the Articles of Association, delivered against acknowledgement of receipt, or sent by registered mail to each shareholder at least 21 days before the AGM. If the Articles of Association indicate a longer term for notice of the AGM, such as 30 days, then the longer term applies.

If there is only one shareholder at the company, it may be decided not to convene the AGM. In such case the sole shareholder should adopt the decisions that are attributed to the AGM’s competence.

Approval of Financial Accounts

In addition to other issues, the AGM must approve the company’s financial accounts and adopt a resolution on profit (loss) appropriation.

Prior to ordinary AGM, the Management Board (if the Management Board is not formed – the Managing Director) should approve the annual report of the company, which is submitted to the AGM together with the financial accounts and auditor’s report (if audit is mandatory by law or under the Articles of Association).

Auditing of financial accounts is mandatory for public limited liability companies. Private limited liability companies must audit their accounts if on the last day of the reporting period at least two of the following limits are exceeded:

  • LTL 12 million (approx. EUR 3.5 million) net turnover during the reporting financial year;
  • LTL 6 million (approx. EUR 1.7 million) value of assets in the balance sheet;
  • 50 payroll employees on average during the reporting financial year.

Please note that only the companies that prepare a full set of accounts need to prepare an annual report. Companies may prepare abridged accounts if on the last day of the reporting period at least two of the following indicators do not exceed the following limits for two consecutive years, including the reporting financial year:

  • LTL 10 million (approx. EUR 2.9 million) net turnover during the reporting financial year;
  • LTL 6 million (approx. EUR 1.7 million) value of assets in the balance sheet;
  • 15 payroll employees on average during the reporting financial year.

The approved financial accounts of the company, together with the annual report and the auditor’s report (if audit is mandatory according to laws or the Articles of Association), must be filed with the Register of Legal Entities within 30 days after approval by the AGM or the sole shareholder.

Monitoring of Management Board and/or Supervisory Council authorisations

Before convening the AGM it is advisable to inspect the term of authorisations of the current Management Board and/or Supervisory Council members and to re-elect the members for a new term or elect new ones in case of expiry of the original terms.

The Company must notify the Register of Legal Entities of election of new Management Board and Supervisory Council members. We also recommend inspecting whether your company has notified the Register of Legal Entities of other changes in registration data.1

 

1 A company must notify the Register of Legal Entities of changes of Management Board members and chairman, Supervisory Council members and chairman, the Managing Director of the company, and in other cases established by law. The Company Law requires that the Register of Legal Entities is informed of sale of part of shares owned by the sole shareholder of the company or acquisition of all shares in the company, as well as submission of the amended shareholders’ list of private limited liability companies.

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ESTONIA
Karin Madisson
send e-mail
Pärnu mnt 15
10141 Tallinn
ph +372 6 400 900
fax +372 6 400 901
estonia@sorainen.com
 
LATVIA
Eva Berlaus
send e-mail
Kr. Valdemāra iela 21
LV-1010 Riga
ph +371 67 365 000
fax +371 67 365 001
latvia@sorainen.com
 
LITHUANIA
Algirdas Pekšys
send e-mail
Jogailos g 4
LT-01116 Vilnius
ph +370 52 685 040
fax +370 52 685 041
lithuania@sorainen.com
 
BELARUS
Maksim Salahub
send e-mail
ul Nemiga 40
220004 Minsk
ph +375 17 306 2102
fax +375 17 306 2079
belarus@sorainen.com

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