Dormant VšĮ, association or foundation: reports and suspension

A public institution (VšĮ), association or charity and sponsorship foundation that does nothing must still prepare its reports every year, approve them and file them with the Register of Legal Entities. Lithuanian company law has no “suspended” status that removes this duty. The tax authority can temporarily release you from tax returns, but not from filings with the register. If the reports are not filed, the manager faces a fine, a sponsorship recipient loses its status, and the register may start liquidation.

Can activities be “suspended”?

Neither the Law on Public Institutions, nor the Law on Associations, nor the Law on Charity and Sponsorship Foundations provides for suspending activities. Legal persons end by liquidation or reorganisation (Article 2.95(1) of the Civil Code of the Republic of Lithuania (CK)), not by ceasing to operate.

Suspension exists only in tax law. Article 77(1) of the Law on Tax Administration of the Republic of Lithuania (MAĮ) allows a taxpayer that temporarily carries on no activity to be temporarily released from filing tax returns and other documents. The procedure, time limits and cases are set by the central tax administrator. If a tax liability arises in that period, the tax must still be paid within the statutory time limit (MAĮ Article 77(2)).

This release works only towards the tax authority. It does not change the duties set by the organisation’s own law and by the Civil Code. How the same rule works for companies is explained in Do you have to liquidate a dormant company?.

Which reports must be prepared

The Law on Reporting by Undertakings and Groups of Undertakings (IIGAĮ) does not apply to these organisations: its rules on financial statements cover for-profit legal persons (IIGAĮ Article 2(1)). The reports of non-profit organisations are governed by their own laws.

After the financial year ends, the manager of a VšĮ prepares a set of annual financial statements and an activity report and submits them to the ordinary general meeting of members (Article 22(1) of the Law on Public Institutions (VšĮĮ)). In an association, the management body named in the articles does this (Article 10(1) of the Law on Associations (AĮ)); in a foundation, too, the management body named in the articles (Article 11(1) of the Law on Charity and Sponsorship Foundations (LPFĮ)).

The set of annual financial statements has three parts: a statement of financial position, a statement of operating results and explanatory notes (VšĮĮ Article 22(2); AĮ Article 10(2); LPFĮ Article 11(2)). If support was received during the year, the explanatory notes describe it and how it was used (VšĮĮ Article 22(3)).

The activity report states the objectives, the work done and the plans for the coming year. A VšĮ also lists its members and the value of their contributions (VšĮĮ Article 22(5)), an association the number of members (AĮ Article 10(4)), a foundation the number of its members (LPFĮ Article 11(4)). If there was no activity, the report says so, but the report itself is still required. The form of the activity report is set by the Minister of Finance (VšĮĮ Article 22(10)).

An organisation that has chosen simplified accounting under the Law on Financial Accounting may prepare one annual report instead of these two documents (VšĮĮ Article 22(7); AĮ Article 10(6); LPFĮ Article 11(8)). A foundation may use this option only if it does not manage endowment capital (neliečiamasis kapitalas) (LPFĮ Article 11(8)). Simplified accounting is open to a non-profit legal person that had no employees in the reporting and previous financial years and whose income and funding received in the previous and the year-before-previous financial years stayed within the limit set in the law. The option is not available to public sector entities, nor to religious communities, associations and centres (Article 4(3) of the Law on Financial Accounting (FAĮ)). Otherwise, organisations that are not public sector entities keep their accounts under the Lithuanian Financial Reporting Standards (FAĮ Article 11(1)(3)).

Who approves the reports and by when

The general meeting approves the set of annual financial statements or the annual report within 4 months after the end of the financial year, except in the liquidation cases set in the law. This is set by VšĮĮ Article 12(1)(6), AĮ Article 8(1)(5) and LPFĮ Article 8(2)(5). Where an audit is mandatory, only the audited set is approved.

If a VšĮ has a single owner, the owner’s written decisions count as decisions of the general meeting (VšĮĮ Article 12(12)). The same applies to a foundation with one member (LPFĮ Article 8(1)). So a dormant VšĮ with a single owner, or a foundation with one member, needs only one written decision, but it must be taken every year. In an association, the decision is taken by the general meeting of members, called under the articles. Whether an association needs a board is covered in Association board and members without a vote.

When and how to file with the register

The approved set of annual financial statements and the activity report, or the annual report, are filed with the Register of Legal Entities every year within thirty days after approval, unless the law sets another time limit (CK Article 2.66(4)). Point 123 of the Regulations of the Register of Legal Entities (JAR nuostatai) repeats the same time limit.

A VšĮ, an association and a foundation file the set unless they prepare an annual report (JAR nuostatai points 120.14–120.16); otherwise they file the annual report. The activity report is filed together with the set (VšĮĮ Article 23(2); AĮ Article 10¹(2); LPFĮ Article 12(2); JAR nuostatai point 127.5). Where an audit is mandatory, the auditor’s report is attached.

The documents are completed and filed electronically, in interactive form (JAR nuostatai point 125). Organisations classed as public sector entities file in the manner set by the Minister of Finance (VšĮĮ Article 23(3); AĮ Article 10¹(3); LPFĮ Article 12(3)). In a VšĮ, the manager is responsible for preparing the reports and filing them with the register (VšĮĮ Article 20(2)(4)).

Sponsorship recipient status and the report to the tax authority

If the organisation has sponsorship recipient status, it also files an annual report with the State Tax Inspectorate (Valstybinė mokesčių inspekcija) on the support received and its use (Article 11(2) of the Law on Charity and Sponsorship (LPĮ)). This duty is separate from the filings with the register. If that report is not filed within 2 months after a warning, the status is withdrawn on the control authority’s submission (LPĮ Article 13(5)(1)).

The register keeper withdraws sponsorship recipient status on its own initiative if the recipient did not file its reports within the time limit in CK Article 2.66(4) and still did not file them within 2 months after a warning (LPĮ Article 13(6)(1); JAR nuostatai point 116.4). The status is also withdrawn when liquidation initiated by the register keeper is registered (LPĮ Article 13(6)(2)). The warning goes to the e-delivery box or, if none, to the correspondence email in the register, or, if none, by registered post to the registered office. So check which contact details the register holds.

What happens if the reports are not filed

First, a fine for the manager. Article 223(2) of the Code of Administrative Offences (ANK) sets a fine for the head of the legal person, or another person named in the law or in the founding documents, when financial statements, an activity report or an annual report are not filed with the register on time.

Second, liquidation initiated by the register. The register keeper, the Centre of Registers (Registrų centras), may start the liquidation of a legal person when the documents referred to in CK Article 2.66(4) have not been filed within twelve months after the filing deadline (CK Article 2.70(1)(1)). How this procedure works, its time limits and how filing the missing documents stops it are described on the service page Liquidation initiated by the Centre of Registers. If you have already received a notice, read Centre of Registers initiated liquidation: what to do.

The ground for initiated liquidation is rebutted by the documents for the previous financial year (JAR nuostatai point 189.1). Still, the duty to prepare, approve and file reports arises for every financial year. The law does not say that filing the latest year’s documents removes this duty for earlier years. A court has refused to revoke an initiated liquidation while the documents for one of the missed years were still outstanding, even though later years had been filed (Panevėžys District Court ruling of 18 April 2024 in civil case No 2SP-4740-1136/2024).

If the organisation is no longer needed

The yearly duty ends only when the organisation ends. If there will be no more activity, a VšĮ, association or foundation can be liquidated voluntarily. See Liquidating a public institution (VšĮ) and Liquidating an association or charity fund.

More on NGOs and public legal entities

• NGOs, public institutions, associations and charity and support funds
• NGO status in Lithuania: when it applies and what the NGO mark gives
• Leaving a VšĮ: transfer of member rights, JADIS and contributions
• Head of a VšĮ: who appoints, employment contract and pay

How to start

Send us the organisation’s registration code, tell us for which years the reports are missing, whether it has sponsorship recipient status and whether you have received a warning or notice from the register. We will tell you which documents need to be prepared and in what order.

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

More about this service: NGOs, public institutions, associations and foundations.