Which company documents the register will not accept, and why an old extract suddenly stops being valid

Company documents are most often returned not because of their content but because of mechanical issues. An old extract, a decision that is too old, a scan instead of an original, a document in a foreign language only. Each such detail costs roughly a week. Below are five points we have been explaining to clients in the same words for several years, and one clarification worth reading carefully: the well-known “six-month rule” is a practice of the register, not a provision of law.

An electronic certified extract stops being valid after any change

This is a question we have explained in five different letters over several years, and each time in the same circumstances: the client has a recently ordered extract and thinks it will do.

The register’s practice is this: after any change to the data, an old electronic certified extract is no longer valid. It does not matter that it was ordered a week ago. If even one item of register data changed during that week, a new extract is needed.

There is also another side to this, and it saves money. Consultants at the Centre of Registers (Registrų centras) have indicated that a new extract is not needed if the data have not changed. This means an extract is not to be treated as a product with an expiry date – it can simply be checked. The validity of an extract can be checked using its key number.

The practical sequence is simple: before the documents are submitted, the validity of the extract you already have is checked using its key number, and a new one is ordered only if the check shows that the data have changed.

Banks have their own time limit, and it is a different one

This is where clients get confused most often, because two different requirements look like one.

What matters to the register is whether the data have changed. What often matters to a bank is how old the document is. From our practice: some banks do not accept extracts older than one month – even if the register data have not changed at all in that time and, from the register’s point of view, the extract is perfectly good.

So if the same extract is going to both the register and a bank, the timing is worked out by the stricter requirement.

The “six-month-old decision” is a practice, not the law

We have explained this question twice in our letters, several years apart, and both times the circumstances were the same: a decision was adopted, then the work dragged on, and when the documents were finally submitted, it turned out that the decision was already too old.

The register’s practice: decisions older than roughly six months are not accepted. The practical solution is simple too – the decision has to be re-dated or adopted afresh. That is a few days’ work, not a few weeks’.

And now the part that needs saying out loud, because it is constantly confused.

In the general case, the six-month figure is a practice, not the law. The Law on Companies (ABĮ) sets a six-month time limit only for specific cases: the articles of association of a company being established (Article 4(9) ABĮ) and decisions to increase or reduce the share capital – such a decision is deemed invalid if the amended articles of association are not submitted to the registrar within 6 months (Article 49(9) ABĮ, Article 52(11) ABĮ). There is no general provision under which any decision of the general meeting of shareholders lapses after six months.

Why this distinction matters. A statutory time limit is a time limit: it is not negotiable and does not change. A practice is a practice: it may be different at different times, and it can be queried. When we tell a client “re-date the decision”, we say so because it is quicker, not because the old decision is invalid. These are two different statements, and we do not mix them up.

Originals and scans: only one original is needed

We have explained this more than once, and the answer is short. A power of attorney is the only original document required. The other documents may be signed and scanned.

One detail comes on top of that, and it is what most often brings the process to a halt: each representative who signs with an electronic signature needs a separate power of attorney. Not one shared by all of them. If three people sign, three powers of attorney are needed.

This is where a week is lost in structures with foreign shareholders – not over a legal question, but because one power of attorney travels by post from another country when three were needed.

Language: bilingual minutes save a translation

From our practice, we recommend bilingual minutes – Lithuanian plus one foreign language. A document drawn up in foreign languages only will need a translation for the register.

A bilingual text takes care of both sides at once: the register receives a Lithuanian text, and the foreign shareholder signs a document they understand. It is cheaper than a translation and quicker than sorting things out afterwards.

Amending the articles of association: two routes, and the cost of one only shows later

Of all the questions in our letters, this is the one that comes up most often.

The articles of association can be amended by two routes. The self-service route is cheaper and quicker, but it replaces the articles with the standard form. The notarial route costs more, but preserves an individual or bilingual text.

What happens in practice: clients choose the cheaper route and then lose provisions agreed in negotiations. This is not a hypothetical risk. We see it again and again, and it is usually noticed not straight away but when those provisions are needed – in a dispute between shareholders or when the company is being sold.

So before choosing the cheaper route, it is worth reading the current articles of association and checking whether they contain provisions that the standard form does not have. If they do not, self-service is the right choice. If they do, the amount saved is less than what is lost.

Where this is written

These matters are governed by the Regulations of the Register of Legal Entities (JAR nuostatai), the Law on Companies and the Civil Code (CK). The provisions we check most often when preparing documents: point 44 JAR nuostatai, point 62 JAR nuostatai, point 63 JAR nuostatai, point 137 JAR nuostatai, points 139.1–139.2 JAR nuostatai, Article 4(9) ABĮ, Article 4(10) ABĮ, Article 49(9) ABĮ, Article 52(11) ABĮ, Article 7(1) ABĮ, Article 18(1) ABĮ, Article 18(2) ABĮ, Article 20(1)(1) ABĮ, Article 37(6) ABĮ and Article 2.46(1) CK.

Some of what is described on this page is not in any of them. It is the practice of the register and of banks, and we flag it separately for exactly that reason.

How to start

Send us what you are preparing to submit to the register, and tell us your deadline. We review which documents will be returned and why before they are submitted. This initial review is free of charge.

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

More about this service: company law services.