Closing a Lithuanian company: liquidation, bankruptcy, merger or share sale

A company ends in only two ways: by liquidation or by reorganisation (Article 2.95(1) of the Civil Code of the Republic of Lithuania (CK)). Which route is open to you depends first on one question: is the company solvent? Shareholders can liquidate a solvent company by their own decision, but they cannot liquidate an insolvent one (Article 73(3) of the Law on Companies of the Republic of Lithuania (ABĮ)); such a company closes through bankruptcy proceedings, unless its solvency is restored (JANĮ Article 6(2)(1)). If you do not want to end the company, only to stop owning it, you can sell the shares: the company then carries on with all its obligations. This article covers private and public limited companies (UAB and AB); for other legal forms some rules differ.

The first question: is the company solvent?

Article 2(7) of the Law on Insolvency of Legal Persons of the Republic of Lithuania (JANĮ) defines insolvency as the state in which a legal person cannot perform its property obligations on time, or its liabilities exceed the value of its assets.

The answer decides not only the route but also the manager’s duties. JANĮ Article 5 obliges the manager to initiate insolvency proceedings if the company is insolvent, and the liquidator to do so if insolvency comes to light during liquidation. So before taking any decision, add up the debts, taxes and contractual commitments and compare them with the assets.

Voluntary liquidation: for a solvent company only

The shareholders’ decision to terminate the company’s activities is the first ground for liquidation listed in CK Article 2.106 (CK Article 2.106(1)). From appointment, the liquidator takes over the rights and duties of the manager and the board, and the manager and board lose their powers (ABĮ Article 73(6)).

A company in liquidation first settles with its creditors, and only then is the remaining property distributed to the shareholders (ABĮ Article 73(13)). Property may be distributed no earlier than 2 months after the publication steps (ABĮ Article 73(14)). The company ceases to exist on deregistration from the register (CK Article 2.95(3)).

What stays with you. The same ABĮ Article 73(13) provides that property of the company discovered later is distributed in the same way; what to do in that case is covered in The company has been deregistered but money is left in its account: what can be done. How to start a liquidation and which documents it needs is covered in How to start liquidating a UAB: documents, employees and creditors.

Bankruptcy: when the company is insolvent

A decision of a court or of the creditors’ meeting to liquidate a legal person due to bankruptcy is a separate ground for liquidation (CK Article 2.106(2)). Insolvency proceedings may be initiated by the manager, where insolvency is likely, and by a creditor whose claim has fallen due (JANĮ Article 4(1)).

Once the company becomes insolvent, JANĮ Article 6(2) obliges the manager to inform the shareholders without delay and to initiate insolvency proceedings without delay. From 1 January 2027 this duty is extended: if, within the time limit set in JANĮ Article 8(3), no assistance agreement is reached and no decision is taken to run the bankruptcy out of court, the manager will have to file an application with the court to open insolvency proceedings without delay.

What stays with the manager. JANĮ Article 13(1) requires the manager to compensate damage caused by failure to perform the duties set by the law. JANĮ Article 13(2) allows the court to bar a person from acting as a manager or sitting on a collegial management body for 1 to 5 years if the manager failed to initiate insolvency proceedings when obliged to, caused an intentional bankruptcy, or, once the bankruptcy order became final, failed to hand over assets, documents or information to the insolvency administrator. From 1 January 2027, the first ground will also cover a manager who failed to file an application with the court to open insolvency proceedings when obliged to. The court declares a bankruptcy intentional where insolvency arose from deliberately bad management or from transactions that breach creditors’ rights (JANĮ Article 70(1)). Who starts a bankruptcy and how is covered in Does bankruptcy need shareholder consent? How insolvency is established.

Reorganisation: merging the company into another

Reorganisation is the end of a legal person without a liquidation procedure (CK Article 2.95(2)). This route fits where you have another company that can take over the business. In a merger by acquisition, all the rights and duties of the company being merged pass to the company it joins (CK Article 2.97(3)).

Conditions set by law:

• only legal persons of the same legal form can be reorganised together, save for exceptions set by law (CK Article 2.98(1));
• the decision is taken by a majority of at least 2/3 of the votes of members present, and only once thirty days have passed since the public notice that the reorganisation terms were drawn up (CK Article 2.96(3)); for a UAB or AB, the 30 days run from the day the operator of the Register of Legal Entities announces receipt of the reorganisation terms or of the link to the company website where they are published (ABĮ Article 62(2));
• the reorganisation terms are announced three times at intervals of at least thirty days, or once with written notice to all creditors (CK Article 2.101(1)); for a company, the single notice with written notifications is allowed only no later than 30 days before the general meeting (ABĮ Article 65(1));
• a company’s reorganisation terms are assessed by an auditor or audit firm (ABĮ Article 63(2)), unless all shareholders agree to skip the assessment (ABĮ Article 63(5));
• a creditor may demand termination or early performance of an obligation where there is reason to believe the reorganisation will make performance harder and the company has not provided additional security (CK Article 2.101(2)); until a company provides additional security to a creditor who demands it, the reorganisation documents cannot be filed with the register (ABĮ Article 66(1) and (4));
• a company cannot be reorganised if it is being liquidated other than by its members’ decision, or if any member has already received part of its property in liquidation (CK Article 2.97(8)).

What stays with you. The reorganisation terms set out how a member of the company being reorganised becomes a member of the continuing company (CK Article 2.99(1)(3)). So you remain an owner, only of a different company. Whether creditors and employees must consent is covered in Reorganising a company: do you need the consent of creditors and employees?.

Share sale: the company stays, the owner changes

Selling the shares does not end the company. It remains liable for its obligations with its own property (CK Article 2.50(1)), and a shareholder is not liable for the company’s obligations, except in cases set by law or the founding documents (CK Article 2.50(2)).

The sale of UAB shares follows the ABĮ rules:

• a shareholder intending to sell shares must notify the company in writing (ABĮ Article 47(1));
• the other shareholders have a pre-emption right to buy the shares on sale (ABĮ Article 47(2)); the articles of association may exclude the pre-emption right or set a sale procedure different from that in ABĮ Article 47(1) and (3)–(8) (ABĮ Article 47(9)); the procedure also does not apply where the company has two shareholders and one sells shares to the other (ABĮ Article 47(8));
• the agreement is in simple written form, except where the Civil Code requires notarial form (ABĮ Article 47(10)). Notarial form is required where 25 per cent or more of the UAB’s shares are sold, or where the transaction amount exceeds the threshold set in CK Article 1.74(1)(3), save for the exceptions in that point.

These rules do not change on 1 November 2026. More: When a UAB share sale agreement must be notarised and Shares must first be offered to the other shareholders: how to keep it from taking a month.

What stays with you. The company’s manager is responsible for filing shareholder data with the Information System of Legal Entities’ Participants (Juridinių asmenų dalyvių informacinė sistema, JADIS) (ABĮ Article 41¹(3)). If you are also the manager, this duty stays with you until you are replaced. In addition, CK Article 2.50(3) provides that where a legal person cannot perform an obligation because of a member’s bad-faith acts, that member is subsidiarily liable with their own property.

Letting the register close the company

If a company fails to file the documents required by CK Article 2.66(4), such as its annual financial statements, within twelve months after the deadline, or has had no management bodies for more than six months, the register keeper may initiate its liquidation (CK Article 2.70(1)). In that case no liquidator is appointed, and the register keeper itself carries out the steps needed for deregistration (CK Article 2.70(8)). The members of the dissolved legal person are jointly and severally liable for three years for damage to creditors if the company was liquidated this way because of their bad-faith acts (CK Article 2.70(9)). More: Notice of liquidation initiated by the Centre of Registers: what to do. If the company is simply dormant, first read The company no longer trades: do you have to liquidate it?.

In short: which route when

• The company is solvent and no longer needed – voluntary liquidation (CK Article 2.106(1)).
• The company is insolvent – bankruptcy proceedings; you cannot liquidate it by your own decision (ABĮ Article 73(3)).
• You have another company of the same form – reorganisation by merger (CK Article 2.97(3)).
• The company is worth something to another owner – a share sale (ABĮ Article 47).

More on liquidation

• Liquidation of companies: service page
• Liquidation initiated by the Centre of Registers
• The company no longer trades – do you have to liquidate it?
• Liquidation notice from the Centre of Registers: what to do and when
• Liquidating an MB in Lithuania: who decides, who liquidates, who gets what
• Closing an individual enterprise (IĮ) in Lithuania: steps and liability
• Liquidating a public institution (VšĮ): who decides, liquidator, assets
• Liquidating a UAB with a shareholder abroad: what can be done remotely
• Liquidation in Lithuania: archive certificate and state land lease tax
• Liquidation in Lithuania: annual financial statements and the AGM
• Shares in other companies during liquidation: act before deregistration
• After bankruptcy opens: CEO duties and what shareholders can still do

More on reorganisation

• Reorganisations and separations of companies: service page
• Merger by acquisition in Lithuania: steps, decisions and time limits
• Tax on company reorganisation in Lithuania: corporate tax, VAT, losses

How to start

Send us the latest balance sheet, a list of debts and contracts, and the articles of association, and tell us whether you have another company or a buyer for the shares.

Phone +370 5 212 1506, email info@linden.lt

More about this service: Liquidation of companies.