Liquidating a public institution (VšĮ): who decides, liquidator, assets

The decision to liquidate a public institution (viešoji įstaiga, VšĮ) is taken by the general meeting of members (dalininkai) by a qualified majority. The same meeting appoints the liquidator. From the appointment, the liquidator takes over the rights and duties of the management bodies. The liquidation is announced publicly, and creditors are paid in the order set by the Civil Code. Members get back no more than the members’ capital, and the remaining assets go to other public legal entities. The law sets no overall duration, but it does set a limit: one year from the registration of the “in liquidation” status, which can be extended by one more year.

Who decides, and by what majority

Article 27(1) of the Law on Public Institutions of the Republic of Lithuania (VšĮĮ) provides that a public institution may be liquidated on the grounds for liquidating legal entities set by the Civil Code. Article 2.106 of the Civil Code of the Republic of Lithuania (CK) lists them. This article is about voluntary liquidation, where the members themselves decide.

The decision to liquidate the public institution, or to revoke its liquidation, is taken by the general meeting of members (VšĮĮ Article 12(1)(10)). It needs a qualified majority. The articles of association set its size, but it may not be less than 2/3 of the votes of all members attending the meeting (VšĮĮ Article 12(5)). Article 2.107(1) of the CK sets the same floor for all legal entities. Where there is a single member, its written decisions count as decisions of the general meeting (VšĮĮ Article 12(12)).

Other routes have their own rules:

  • If the VšĮ was set up for a fixed period, the liquidator must be appointed no less than 3 months before that period ends (VšĮĮ Article 27(2)).
  • In bankruptcy, a VšĮ is liquidated under the Law on Insolvency of Legal Entities (VšĮĮ Article 27(3)). Who starts a bankruptcy and how is covered in Company insolvency without shareholder consent.
  • If the registrar, the Centre of Registers (Registrų centras), starts the liquidation, the CK rules on liquidation at the registrar’s initiative apply (VšĮĮ Article 27(4)).

If it becomes clear during the liquidation that the institution is insolvent, the liquidator must stop all payments and start bankruptcy proceedings without delay (Article 7 of the Law on Insolvency of Legal Entities, JANĮ). It is therefore worth checking debts and assets before the decision.

Who can be liquidator, and what the liquidator does

Having decided to liquidate, the members must appoint a liquidator (CK Article 2.108(1)). The liquidator may be a person with the necessary qualifications. Several liquidators may be appointed; they then form a liquidation committee (CK Article 2.108(3)). The liquidator of a VšĮ must meet the same general requirements as the head of a public institution (VšĮĮ Article 28(1)).

From the appointment, the institution’s management bodies lose their powers (CK Article 2.110(1)). The liquidator has the rights and duties of the management body (CK Article 2.110(2)). An institution in liquidation may only enter into transactions linked to winding up its activities or provided for in the liquidation decision (CK Article 2.111).

VšĮĮ Article 28(2) lists the liquidator’s duties, including:

  • notify the Register of Legal Entities of the decision and of the liquidator’s details;
  • complete the institution’s obligations and settle with its creditors;
  • bring claims against the institution’s debtors;
  • transfer the remaining assets as the law requires;
  • draw up the liquidation act;
  • deregister the institution’s website, if it has one, and hand over its documents for storage;
  • submit to the registrar the documents needed to deregister the institution.

A liquidator who fails to perform these duties, or performs them improperly, must compensate in full the damage caused (CK Article 2.110(4)). The members may replace the liquidator (VšĮĮ Article 27(5)). Removal needs a simple majority of the members attending the meeting (CK Article 2.109(1)). If the liquidator acts improperly, a court may be asked to replace them by members holding at least 1/10 of all votes, by a creditor whose claim reaches the amount set in the law, or by at least 1/5 of the employees (CK Article 2.109(2)).

Announcement, the register and creditors

The liquidation of a VšĮ is announced as set out in CK Article 2.112, and the notice must also state the date of the decision (VšĮĮ Article 27(6)). CK Article 2.112(1) allows a choice: publish the notice three times at intervals of no less than thirty days, or publish it once and notify all creditors in writing. A VšĮ publishes its public notices in the registrar’s electronic gazette for public notices, on its website and/or through its other electronic channels (VšĮĮ Article 8(5)).

The register must be notified no later than the first day of public announcement (CK Article 2.112(2)). The liquidator submits the decision and their own details (VšĮĮ Article 27(7)). Point 184 of the Regulations of the Register of Legal Entities (JAR nuostatai) lists the documents, including: an application to register the legal status, the decision, and a document on the liquidator and the limits of their authority. The registrar registers the “in liquidation” status within three working days (point 186 of the JAR nuostatai).

Creditors are paid in the order set by CK Article 2.113 (VšĮĮ Article 27(8)): first claims secured by a pledge, then employees, then taxes and contributions, and finally all remaining claims (CK Article 2.113(1)). How creditors and employees are settled step by step is covered in UAB liquidation process; the order of creditors is the same for a VšĮ.

What members get back, and where the remaining assets go

Here the VšĮ rules are specific. VšĮĮ Article 27(8) sets three rules:

  1. Members receive assets only once all creditor claims have been met. The total value may not exceed the members’ capital.
  2. Assets returned to members are divided in proportion to the value of their contributions.
  3. Any remaining assets go to other public legal entities registered in the Register of Legal Entities. They are named by the general meeting of members or by the court that decided to liquidate the institution.

The members’ capital equals the value of the members’ contributions (VšĮĮ Article 24(2)). So a member gets back no more than they put in, even if the institution built up a surplus. One step follows from this: it is worth naming the recipients of the remaining assets in the liquidation decision itself. The liquidator then does not need to call a second meeting.

Closing documents and deregistration

The liquidator prepares the final liquidation financial statement using the data of the last day of activity (VšĮĮ Article 28(2)(3)). If no more than 3 months have passed between the end of the financial year and the last day of activity, the annual financial statements for that last year may be skipped, as long as all material information is in the final liquidation statement (same point). A VšĮ in liquidation does not prepare an activity report (VšĮĮ Article 27(9)).

These rules apply from 1 July 2025 (Article 10 and Article 11(3) of Law No XIV-2817 amending the Law on Public Institutions). If the liquidation decision was taken before 30 June 2025, the earlier rules apply to the liquidation report (Article 11(8) of Law No XIV-2817). Under the earlier wording of VšĮĮ Article 28(2)(3), financial statements or an annual report are prepared as at the date of the liquidation decision, and a liquidation report as at the date liquidation ends.

The registrar receives (point 198 of the JAR nuostatai):

  • an application to deregister the liquidated legal entity;
  • the liquidation act;
  • an archive certificate that the documents were handed over for storage, or that there are none to hand over, if the registrar has not received such a notice directly;
  • a municipal certificate that state land lease tax has been settled, if the registrar has not received such a notice directly;
  • the final liquidation financial statement, where the public institution is not a public-sector entity under the Law on Public Sector Accountability (point 198.5 of the JAR Regulations).

A notice from the State Tax Inspectorate (Valstybinė mokesčių inspekcija, VMI) that the institution has settled with the budgets and funds, or that the VMI has no such data, is also needed (point 38.7.7.1 of the JAR nuostatai). Once the registrar has the documents and this notice, it deregisters the institution within five days (point 201 of the JAR nuostatai).

How long it takes: what the law sets

The law sets no overall duration. It sets a limit: the liquidator must complete the procedures and deregister the institution within one year from the registration of the “in liquidation” status. Before that term ends, an extension of one year may be requested (CK Article 2.110(3)).

If the documents are not filed within these terms, the registrar deregisters the institution. Under point 200¹ of the JAR nuostatai as now in force, this happens within five working days after the terms end. From 15 October 2026 this point changes. The registrar will deregister automatically within 30 days after the terms end, if the VMI has not reported the institution’s debts to the VMI or the State Social Insurance Fund, unmet obligations to customs, unfinished employment contracts, a tax investigation, audit or dispute, or a tax loan agreement. If the VMI reports after the terms have ended that these circumstances have gone, the institution is deregistered within 30 days of that report (point 200¹ and point 23.28¹ of the JAR nuostatai, version from 2026-10-15). No later than three months before the possible deregistration, the institution will be sent a notice by email.

Otherwise, the time depends on what the institution has to put in order. The main factors are the chosen way of informing creditors (CK Article 2.112(1)), debt collection, the VMI notice and handing documents to the archive. What can hold the process up is discussed in How long company liquidation takes.

Can the liquidation be revoked?

Yes. Where a VšĮ is liquidated by decision of its members, the general meeting may revoke the liquidation (VšĮĮ Article 27(5)). This needs the same qualified majority as the decision to liquidate (VšĮĮ Article 12(5)). However, the decision can no longer be revoked once at least one member has received part of the institution’s assets (CK Article 2.107(2)).

More on liquidation

How to start

Send us the latest Centre of Registers extract, the articles of association, the list of members with the value of their contributions, and a short description of the institution’s debts, assets, employees and any support received. We will tell you which decisions are needed and in what order.

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

More about this service: Liquidation of companies.

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