A foreign company’s branch in Lithuania: the document on which registration can stall

Branch registration can stall at the foreign company’s financial statements. If they are presented to a notary as an official document issued abroad, Article 54 of the Law on the Notarial Profession applies: Lithuanian notaries accept such documents if they bear an apostille or have been legalised, unless international treaties or EU legal acts provide otherwise. Lithuanian law sets no time for obtaining an apostille abroad, so this is worth finding out at the very start.

What must be filed with the register

Article 76(1)(1) of the Law on Companies (ABĮ) – an extract from the register in which the foreign company’s file is kept, confirming that the foreign company is registered in that register.

Article 76(1)(2) ABĮ – the foreign company’s instruments of incorporation, the memorandum of association and the articles of association if these are separate documents, and also all amendments to these documents. The word “all” does real work here: if over twenty years the company has amended its articles several times, the whole chain is needed, not just the latest version.

The third set of documents is the foreign company’s annual financial statements, together with the management report and, where an audit is mandatory under the law of that state, the auditor’s report. The time limit – within 12 months of the last day of the financial year. This is exactly where registration can stall.

Fourth – documents confirming the procedures applied to an insolvent company, if there are any.

What the law says about the financial statements

Article 76(1)(3) ABĮ requires the filing of the foreign company’s set of annual financial statements and, where an audit is mandatory under the law of that state, the auditor’s report. An exception is provided in Article 76(2) ABĮ: if the foreign company’s statements are not prepared in accordance with the requirements applicable in the European Union, the branch’s set of annual financial statements prepared under Lithuanian legislation is filed instead.

Article 76(3) ABĮ applies alongside this: the register extract and the founding documents must be legalised in the manner prescribed by law, except in cases established by international treaties. This is where the apostille enters the process. This paragraph does not mention the financial statements (paragraph 1, point 3).

So the order of work may be different from what it seems. The first task is not the branch regulations or the appointment of the branch manager. The first task is to order the register extract and the founding documents in your own country and have them legalised or, where the Hague Convention of 5 October 1961 (the Apostille Convention) applies, apostilled (Article 76(3) ABĮ); where the financial statements are presented to a notary as an official document issued abroad, the same applies to them (Article 54 of the Law on the Notarial Profession). How long this takes depends on the foreign authorities.

The apostille: where to get it

Article 3 of the Hague Convention of 5 October 1961 Abolishing the Requirement of Legalisation for Foreign Public Documents (the Apostille Convention) provides that the only formality that may be required in order to certify the authenticity of the signature, the capacity in which the person signing the document has acted and the identity of the seal is the addition of a certificate issued by the competent authority of the State from which the document emanates. This means that for a document issued abroad, the apostille is added by that foreign state, not by Lithuania.

There is an exception too. Article 3(2) of the Hague Convention says that this formality cannot be required where the laws, regulations or practice of the state in which the document is presented, or an agreement between two or more states, have abolished or simplified it, or exempt the document itself from legalisation. Some states have bilateral treaties with Lithuania, and then no apostille is needed. This is checked for the specific state before ordering the service, because obtaining an apostille takes time.

For documents issued in Lithuania, the apostille is added by notaries: point 18 of Article 26 of the Law on the Notarial Profession (Notariato įstatymas) assigns to notaries the act of certifying documents with a certificate (Apostille) in the manner established by the Government. Notarial acts may be performed by any notary, except in inheritance matters (Article 28 of the Law on the Notarial Profession), so for this you can go to any notary’s office, the nearest one will do, with the original documents. There is no need to choose a notary by location or by an existing relationship.

Closing a branch

Article 75(7) ABĮ – the branch manager must publicly announce the termination of the branch’s activities in the electronic publication issued by the registrar three times, at intervals of not less than 30 days, or announce it once and notify all creditors in writing. The time limit for creditors to submit their claims may not be shorter than 2 months from the date of the public announcement.

Three announcements 30 days apart mean two months for the announcements alone, plus two months for the creditors’ time limit. One announcement plus written notices to all creditors is faster – provided the list of creditors is accurate and all of them can be reached.

Article 75(9) ABĮ – the documents for deregistering the branch may not be filed with the register at all until the obligations to the creditors who demanded it have been performed or their performance has been additionally secured, nor before a court judgment becomes final where a dispute is pending in court. One unsatisfied creditor stops the whole process.

Article 75(10) ABĮ: before deregistration, the documents of a branch that has ceased its activities are handed over for safekeeping in the manner laid down by the Law on Documents and Archives (DAĮ).

The branch manager is responsible for filing the documents and data with the register (Article 75(3) ABĮ). The register deregisters the branch within five working days of receiving the deregistration documents and the VMI notice that the branch has settled its accounts with the budgets and funds (points 38.7.7.1 and 209 of the Regulations of the Register of Legal Entities).

All the steps, and what can stop them: Closing a foreign company’s branch in Lithuania: steps and what can stop it.

More on setting up a company

• Establishment of legal entities: service page
• Issuing new UAB shares: documents, signatures and doing it remotely
• You cannot increase share capital from retained earnings while the balance sheet shows losses
• Beneficial owners in JADIS: who files the data and how to get an extract
• UAB shareholders changed: what to file in JADIS, and who does it
• Converting an IĮ into a UAB or MB: liability, assets, contracts, staff

How to start

Write to us with the state in which the company is registered and when its last financial year ended. We will tell you whether an apostille will be needed in that state, in what form to order the financial statements and how long it will realistically take until registration.

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

More about this service: establishment of legal entities.