Converting an MB into a UAB: decision, capital, creditors, timing

A small partnership (mažoji bendrija, MB) can be converted into a private limited company (UAB). The MB’s members’ meeting decides by a majority of at least 2/3 of all members’ votes and adopts the UAB’s articles of association (įstatai) at the same time. The assets for which shares are issued must be valued by an independent valuer (in exceptional cases a certificate is prepared instead of a report), and the report or certificate must reach the Centre of Registers (Registrų centras) no later than 10 days before the decision. The decision is published, and the UAB’s articles are registered through a notary. The UAB takes over all the MB’s rights and obligations, and the conversion is complete once the UAB’s articles are registered.

Which rules apply

Conversion (pertvarkymas) is a change of a legal entity’s legal form in which the entity in its new form takes over all the rights and obligations of the converted entity (Article 2.104(1) of the Civil Code of the Republic of Lithuania (CK)). An MB can be converted into, among other forms, a public limited company or a UAB (Article 29(2) of the Law on Small Partnerships of the Republic of Lithuania (MBĮ)).

An MB is converted into a UAB under the provisions of the Law on Companies on converting a legal entity of another form into a company (MBĮ Article 29(8)). These are Article 72(12) to (15) of the Law on Companies of the Republic of Lithuania (ABĮ): asset valuation, the deadline for filing the report and the minimum share capital. The procedure itself (decision, publication, registration) is set by MBĮ Article 29.

An MB that has the status of an MB being reorganised or taking part in a reorganisation cannot be converted (MBĮ Article 27(4)).

The decision and the majority needed

The decision to convert an MB is an exclusive power of the members’ meeting (MBĮ Article 13, point 11). It needs a qualified majority of at least 2/3 of all members’ votes (MBĮ Article 18(1)). The regulations (nuostatai) can require a larger majority (MBĮ Article 18(2)), so check your regulations first. If the MB has a single member, no meeting is called: that member’s written decision is enough (MBĮ Article 15(3)).

Together with the decision, the founding documents of the entity that will operate after conversion must be adopted, and they must meet the requirements of the law governing that legal form (MBĮ Article 29(3)). For a UAB, these are the articles of association. MBĮ Article 29 does not say how members’ contributions become shares. State clearly in the decision and in the articles how many shares each member receives.

From the day of the decision, the MB has the status of an MB being converted (MBĮ Article 29(6)).

Asset valuation and the UAB’s share capital

The assets for which the UAB’s shares are issued must be valued by an independent valuer (ABĮ Article 72(12)). This requirement may be disregarded only in the cases listed in ABĮ Article 72(13), where the value of the assets has been set under the rules of ABĮ Article 45¹ (ABĮ Article 72(13)). In that case a certificate under ABĮ Article 45¹(5) is prepared instead of a valuation report (ABĮ Article 45¹(5)).

The valuation report or certificate must be filed with the Centre of Registers no later than 10 days before the day of the conversion decision (ABĮ Article 72(14); point 165 of the Regulations of the Register of Legal Entities (JAR nuostatai)). Order the valuation before you call the members’ meeting, not after it.

The UAB’s share capital must be no less than the minimum set in ABĮ Article 2 (ABĮ Article 72(15); ABĮ Article 2(4)). If the MB’s assets are not enough to form the minimum share capital, or its liabilities exceed the value of its assets, the members have the right to make additional contributions (ABĮ Article 72(15)).

Publication and creditors

The decision to convert the MB is published in the source named in the MB’s regulations three times at intervals of at least 30 days. The alternative is to publish it once and notify all the MB’s creditors in writing (MBĮ Article 29(4)). The notice states the MB’s name, code, registered office, the register, the new legal form, and where and from when the UAB’s articles and the financial statements for the last three financial years (where an audit is mandatory, the audited set with the auditor’s report) can be inspected (MBĮ Article 29(4)).

The document confirming the decision is filed with the registrar no later than on the first day of publication (MBĮ Article 29(5)). An application to register the legal status is filed with it (point 166 of the JAR nuostatai). The registrar registers the status “being converted” (pertvarkomas) no later than within three working days (point 167 of the JAR nuostatai).

The Civil Code’s creditor protection rule applies to conversion (CK Article 2.104(4)). A creditor may demand that an obligation be terminated or performed early and that losses be compensated, if the transaction provides for this or there are grounds to believe performance will become harder, and additional security requested by the creditor was not provided (CK Article 2.101(2)). Review your loan, leasing and other long-term contracts before the decision.

What the UAB takes over: assets, contracts, employees and the manager

All the rights and obligations of the converted MB pass to the entity operating after conversion (MBĮ Article 29(1)). Assets and contracts do not need to be transferred to the UAB one by one. How a conversion affects employees is governed by the Labour Code; this is explained in Converting an IĮ into a UAB or MB: liability, assets, contracts, staff.

The type of the manager’s contract changes. An MB manager has a civil (services) contract (MBĮ Article 22(2)), whereas a UAB manager has an employment contract (ABĮ Article 37(4)). The UAB’s management bodies must be elected before the UAB is registered (MBĮ Article 29(13)), so prepare the contract with the UAB manager at the same time. The UAB manager is elected by the board; if there is no board, by the supervisory board; and if there is neither, by the general meeting of shareholders (ABĮ Article 37(3)).

Members’ liability. The three-year subsidiary liability for old obligations applies only where the participants of the converted entity are liable for its obligations (CK Article 2.104(2)). An MB is a legal entity with limited civil liability (MBĮ Article 2(1)), so there is no basis for applying this rule to MB members. This is where converting an MB differs from converting an individual enterprise (see the article on IĮ conversion linked above).

Registration and when the UAB starts

The UAB’s articles are registered only after the UAB’s management bodies are elected, the balance sheet of the MB being converted is drawn up, the other statutory conditions are met and the required documents are filed (MBĮ Article 29(13)). When a legal entity is registered after conversion, the documents are filed with a notary (point 48 of the JAR nuostatai). The notary confirms that the data are true, that the articles comply with the law and that registration can proceed (point 54 of the JAR nuostatai). The registrar receives an application to register the changes and the full text of the amended founding document (point 168 of the JAR nuostatai).

The conversion is complete, and the MB loses the status of an MB being converted, from the registration of the UAB’s founding documents in the Register of Legal Entities (MBĮ Article 29(14)). From that day the entity operates as a UAB.

How long does converting an MB into a UAB take?

The law sets no overall duration for a conversion. It depends on these statutory time limits and on the publication method chosen:

• asset valuation report or certificate to the registrar: no later than 10 days before the decision (ABĮ Article 72(14));
• status “being converted”: the registrar registers it within three working days (point 167 of the JAR nuostatai);
• publication: three notices at intervals of at least 30 days, or one notice plus written notices to creditors (MBĮ Article 29(4));
• registration of the UAB’s articles: the registrar decides no later than within three working days after receiving the documents and the charge (point 128 of the JAR nuostatai).

If you choose three notices, the UAB’s articles can be registered only after the third notice, because publication is one of the conversion conditions that must be met before registration (MBĮ Article 29(4); MBĮ Article 29(13)). MBĮ Article 29 sets no separate waiting period after publication. Creditors’ rights during a conversion are set by CK Article 2.101(2), which applies to conversion under CK Article 2.104(4).

JADIS data after conversion

After conversion, the Information System of Legal Entities’ Participants (JADIS) receives data no longer on MB members but on UAB shareholders: the shareholder’s details, the number of shares owned, their nominal value and how the shares were acquired (ABĮ Article 41¹(1)). The company’s manager is responsible for filing them (ABĮ Article 41¹(3)).

ABĮ Article 41¹(2) sets a 5-day time limit after a UAB is registered and after its shareholders change (ABĮ Article 41¹(2)). The law sets no separate time limit for conversion, so the safe course is to file the data within 5 days of the UAB’s registration. Data on beneficial owners are filed at the same time (point 12 of the JADIS Regulations (JADIS nuostatai)). Where a UAB has a single shareholder, the manager files that shareholder’s data through JADIS and asks for them to be registered in the Register of Legal Entities (ABĮ Article 12(5)). From 1 November 2026 the same rule moves to ABĮ Article 12(4) (ABĮ Article 12(4), version from 2026-11-01). How shareholder changes are handled in JADIS is explained in UAB shareholders changed: what to file in JADIS, and who does it.

More on setting up a company

• Establishment of legal entities: service page
• Reducing a UAB’s share capital in Lithuania: purposes, creditors, deadlines
• Non-cash contributions to a UAB’s capital: assets, valuation and loans
• Amending UAB articles in Lithuania: votes, notary and registration
• Changing the CEO of a UAB: who decides, how to register, when it applies
• UAB management board: is it required, how many members, who elects them
• Converting a UAB into an MB: conditions, steps, creditors, deadlines
• Converting an MB into a UAB: splitting shares and capital from profit
• Conversion with losses: share capital, insolvency and tax losses
• Who becomes the MB’s manager after a UAB is converted into an MB

More on reorganisation

• Reorganisations and separations of companies: service page
• Merging an MB and a UAB in Lithuania: why conversion comes first
• Merger by acquisition in Lithuania: steps, decisions and time limits

How to start

Send us the MB’s regulations, its latest financial statements, the list of members with their contributions, and tell us what share capital and split of shares you plan for the UAB. We will tell you what asset valuation is needed and prepare the decision, the UAB’s articles and the notices to creditors.

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

More about this service: Changing the legal form of a legal entity.