Liquidating a UAB with a shareholder abroad: what can be done remotely

A shareholder who lives abroad, or a shareholder company set up abroad, can liquidate a UAB (private limited company) without coming to Lithuania. The shareholder signs the decision to liquidate the company and elect a liquidator and, if a financial year ends during the liquidation, a decision approving that year’s annual financial statements, unless they need not be prepared (Article 15(3) IIGAĮ). Every other step, from registering the status to the application for deregistration, is done by the liquidator. The decision can be signed with a qualified electronic signature under Regulation (EU) No 910/2014 or by hand; a scan of a hand-signed decision is filed with the register electronically by the liquidator, who certifies it with their own qualified electronic signature. A notary is needed when a shareholder who is a natural person wants to authorise someone else to sign on their behalf and does not make the power of attorney in the Register of Powers of Attorney.

How to start a liquidation, which documents the register needs and when to give notice to employees is covered in How to start liquidating a UAB: documents, employees and creditors. This article describes the whole process when the shareholder or its representatives are abroad.

What the shareholder signs and what the liquidator signs

A general meeting of shareholders that decides to liquidate the company must elect its liquidator (Article 73(5) of the Law on Companies, ABĮ). Where there is a single shareholder, its written decisions are equivalent to decisions of the general meeting (Article 29(7) ABĮ). No minutes need be drawn up where all shareholders sign the decisions or where there is a single shareholder (Article 29(1) ABĮ). Where there are several shareholders, each may vote in writing with a general ballot paper, which may be sent by electronic means of communication if the security of the information is ensured and the shareholder’s identity can be established (Article 21(3) ABĮ). If the ballot is signed electronically, it must be signed with a qualified electronic signature (Article 30(4) and Article 29(3) ABĮ), and the company must receive it before the meeting (Article 30(5) ABĮ). Qualified electronic signatures from third countries are recognised under Article 14 of Regulation (EU) No 910/2014 (Article 29(3) ABĮ).

From election, the liquidator acquires the rights and duties of the company’s manager and board, and the manager loses its powers (Article 73(6) ABĮ). Only a natural person may be a liquidator (Article 74(1) ABĮ). So who the liquidator is decides whether the shareholder will have to sign anything else after the decision.

Electronic signature: when it is enough

A qualified electronic signature has the equivalent legal effect of a handwritten signature (Article 25(2) of Regulation (EU) No 910/2014). Where documents are filed with the Centre of Registers electronically, they must be signed with a qualified electronic signature meeting the requirements of that Regulation. When filing electronically, citizens of an EU Member State may also log in with high-assurance electronic identification means issued in their Member State, if they meet the conditions of Article 6(1) of Regulation (EU) No 910/2014; the list of accepted means is published on the Centre of Registers’ website (point 68 of the Regulations of the Register of Legal Entities, JAR nuostatai). This is a means of logging in, not a signature: the documents themselves must still be signed with a qualified electronic signature.

Not every electronic signature will do. A non-qualified electronic signature has the same legal force as a written signature if its users have agreed to this in writing in advance and the agreement can be stored on a durable medium (Article 5(1) of the Law on Electronic Identification and Trust Services for Electronic Transactions, EAEOPĮ). Such an agreement is not enough for the register, because point 68 of the JAR nuostatai requires a qualified signature.

If the shareholder has no qualified signature, they sign the decision by hand and send a scanned copy. The liquidator files the scan with the register electronically and certifies it with a qualified electronic signature, because copies certified in accordance with point 68 of the JAR nuostatai may be filed when filing electronically (point 65 of the JAR nuostatai). If the copy cannot be certified that way, the original is filed in person or by post (point 71 of the JAR nuostatai). Documents must be in the state language; documents in another language must be accompanied by a translation signed by the translator (point 63 of the JAR nuostatai). So it is convenient to prepare the decision in two languages.

When the shareholder is a foreign company

A legal person acts through its bodies (Article 2.81(1) of the Civil Code, CK). The shareholder company’s decision is signed by whoever may represent it under the law of its country and its articles (Article 1.19(1) and Article 1.20(1)(4) and (6) CK). If its representation rule requires the signatures of several directors, all of them sign.

The register checks, on the basis of the documents filed, that the data are accurate and the documents comply with the law (point 58 of the JAR nuostatai), so it must be able to see that the signatory has the right to represent. When data about a foreign legal person are filed, an extract from the register holding its data, or another document confirming its registration, is filed (point 60 of the JAR nuostatai). Extracts from a foreign register are filed legalised or with an apostille. They are not filed where that country’s register data are public and accessible to everyone without payment, or accessible through the Registers Interaction System (point 70 of the JAR nuostatai). An extract not in Lithuanian needs a translation signed by the translator (point 63 of the JAR nuostatai).

If an authorised person signs for the shareholder company, documents confirming the representative’s authority are filed with the documents (point 39 of the JAR nuostatai). How a parent company is represented and who signs on its behalf is described in Who signs company documents: manager, representative or shareholders?.

When a notary is still needed

The liquidation itself does not require a notary. Point 58 of the JAR nuostatai provides that, in all cases other than those listed there, documents are filed directly with the registrar (point 58 of the JAR nuostatai). Liquidation documents are not among the exceptions.

A notary is needed for a power of attorney. A notary must certify a power of attorney to act on behalf of a natural person in matters relating to legal persons (Article 2.138(1)(2) CK). This applies where a shareholder who is a natural person wants someone else to sign the decision on their behalf. No certification is needed if the natural person made the power of attorney by information technology means and registered it in the Register of Powers of Attorney, or in other cases provided by law (Article 2.138(3) CK). When a document certified by a foreign notary needs an apostille and a translation is covered in Translation, notary and apostille.

The simplest route is therefore for the shareholder to sign the decision personally. Then no power of attorney is needed at all. Until the liquidator is elected, the company’s manager can give a lawyer a power of attorney online: a power of attorney may be made by information technology means and given by registering it in the Register of Powers of Attorney (Article 2.137(1) CK).

The whole process with a shareholder abroad

1. Decision. The shareholder signs the decision to liquidate the company and elect a liquidator (Article 73(5) ABĮ), with a qualified electronic signature under Regulation (EU) No 910/2014 or by hand; a scan of a hand-signed decision is filed with the register by the liquidator, who certifies it with their own qualified electronic signature.
2. Registering the status. No later than on the day of the first public notice, the liquidator files with the register the documents confirming the decision to liquidate the company and data about themselves (Article 73(11) ABĮ). An application to register the legal status, the decision and a document on the liquidator are filed (point 184 of the JAR nuostatai). The register registers the status “in liquidation” within three working days (point 186 of the JAR nuostatai). If electronic filing through the register’s own tools is not available, documents signed with a qualified electronic signature may be sent to the Centre of Registers’ electronic delivery box address (point 71 of the JAR nuostatai).
3. Creditors. The liquidator publishes the liquidation three times at intervals of not less than 30 days, or once with written notice to all creditors (Article 73(10) ABĮ).
4. The liquidator’s work. The liquidator prepares the final liquidation financial statement, distributes the remaining assets to the shareholders after settling with creditors and prepares the transfer deeds, hands the documents over for safekeeping and prepares the liquidation deed (Article 74(2)(1), (2), (4) and (5) ABĮ). Article 74(2) ABĮ assigns these tasks to the liquidator and does not require the shareholders’ approval for them.
5. Annual statements if a financial year ends during the liquidation. A set of annual financial statements is prepared for the year that has ended (Article 13(2) of the Law on Financial Reporting by Undertakings and Groups of Undertakings, IIGAĮ). It need not be prepared if no more than 3 months have passed from the end of the financial year to the last day of activity before the end of the liquidation and all material information is given in the final liquidation financial statement (Article 15(3) IIGAĮ). If the liquidation lasts longer than a year, the liquidator draws up the set and a liquidation report within 3 months after the end of each financial year, and they are approved by the annual general meeting of shareholders (Article 74(3) ABĮ). This is the second document the shareholder signs, and it too can be signed remotely.
6. Deregistration. The liquidator files with the register the final liquidation financial statement, the liquidation deed and the other documents needed for deregistration (Article 74(2)(6) ABĮ). The list, including the application for deregistration, is set out in point 198 of the JAR nuostatai (point 198 of the JAR nuostatai).

More on liquidation

• Liquidation of companies: service page
• How to start liquidating a UAB: documents, employees and creditors
• During a UAB liquidation: employees, creditors, audit and the bank account
• Who can be a company liquidator in Lithuania, and what are they liable for?
• How long company liquidation takes, and what holds it up
• Liquidation in Lithuania: archive certificate and state land lease tax
• Liquidation in Lithuania: annual financial statements and the AGM
• Shares in other companies during liquidation: act before deregistration
• After bankruptcy opens: CEO duties and what shareholders can still do

How to start

Send us the company’s latest register extract and articles of association, tell us where the shareholders and the manager live and whether they have a qualified electronic signature, and if the shareholder is a company, send its register extract. We will prepare a bilingual decision and tell you who has to sign it and how.

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

More about this service: Liquidation of companies.