Liquidating an association or charity fund: who gets the assets

An association (asociacija) and a charity and support fund (labdaros ir paramos fondas) are liquidated under the Civil Code rules, like other legal entities. The decision is taken by the general meeting of members (in a fund, of its participants, dalininkai) by at least 2/3 of the votes of those attending. The difference lies in how the assets are shared. Once creditors are paid, an association member may get back no more than their entry contribution or fee, and a fund participant no more than their contribution. The association’s remaining assets go to other public legal entities, and the fund’s go to other funds with the same aims.

Which rules apply

Article 17(1) of the Law on Associations of the Republic of Lithuania (AĮ) provides that associations are converted and come to an end under the procedure set by the Civil Code. Article 25(3) of the Law on Charity and Support Funds of the Republic of Lithuania (LPFĮ) likewise provides that a fund is liquidated on the grounds and under the procedure of the Civil Code. The grounds for liquidation are listed in Article 2.106 of the Civil Code of the Republic of Lithuania (CK). The special laws add their own rules on the decision, the liquidator’s duties and the assets.

An association has one additional case. The minimum number of members of an association is three (AĮ Article 13(1)). If fewer remain, the register must be notified within thirty days (AĮ Article 17(3)). If no decision to reorganise or convert the association is taken within six months of the drop, this becomes a ground for liquidation (CK Article 2.106(6)).

A fund has an alternative to liquidation: it may be converted into a public institution (LPFĮ Article 25(1)). A fund that manages an endowment may be converted only after the endowment and the income from investing it have been used as LPFĮ Article 24(2) requires (LPFĮ Article 25(1)).

Who decides

In an association, the decision on liquidation is taken by the general meeting of members (AĮ Article 8(1)(6)). The meeting may not delegate this matter to other bodies (AĮ Article 8(3)). Each member has one vote (AĮ Article 8(4)). The decision needs at least 2/3 of the votes of the members attending the meeting (AĮ Article 8(7)).

In a fund, the decision is taken by the general meeting of participants (LPFĮ Article 8(2)(7)). It also needs at least 2/3 of the votes of the participants attending (LPFĮ Article 8(8)). Where a fund has a single participant, its written decisions are equal to decisions of the meeting (LPFĮ Article 8(1)).

The general Civil Code rule is the same: no less than 2/3 of the votes of all those attending the meeting (CK Article 2.107(1)). A decision that has been taken can no longer be revoked once at least one member or participant has received part of the assets of the entity in liquidation (CK Article 2.107(2)).

If it becomes clear during the liquidation that the association or fund 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). Who starts a bankruptcy and how is covered in Company insolvency without shareholder consent.

The liquidator: who can act, and what they must do

Having decided, the members or participants must appoint a liquidator (CK Article 2.108(1)). The liquidator may be a person with the necessary qualifications; several may be appointed (CK Article 2.108(3)). From the appointment, the management bodies lose their powers and the liquidator has the rights and duties of the management body (CK Article 2.110(1) and (2)). An entity in liquidation may only enter into transactions linked to winding up its activities or provided for in the liquidation decision (CK Article 2.111).

The liquidation is announced publicly. CK Article 2.112(1) allows the notice to be published three times at intervals of no less than thirty days, or once with written notice to all creditors. The special laws say where to publish:

• the liquidator of an association publishes in the daily newspaper named in the association’s articles (AĮ Article 17(5)(1));
• the liquidator of a fund publishes in the source named in the fund’s articles (LPFĮ Article 25(6)(1)).

The register must be notified no later than the first day of public announcement (CK Article 2.112(2)). An application to register the legal status, the decision and a document on the liquidator are filed (point 184 of the Regulations of the Register of Legal Entities, JAR nuostatai). The registrar registers the “in liquidation” status within three working days (point 186 of the JAR nuostatai).

Then the liquidator, as set out in AĮ Article 17(5) and LPFĮ Article 25(6):

• prepares the final liquidation financial statement using the data of the last day of activity;
• transfers the remaining assets as the law requires;
• draws up the liquidation act, which describes the course of the liquidation and confirms that all steps have been taken;
• hands over the documents for storage;
• files with the registrar the liquidation act, the final liquidation financial statement and the other documents.

The duties to prepare the final liquidation financial statement and file it with the registrar apply from 1 July 2025 (Article 8 and Article 9(3) of Law No XIV-2818 amending the Law on Associations; Article 8 and Article 9(3) of Law No XIV-2819 amending the Law on Charity and Support Funds). If the liquidation decision was taken on or before 30 June 2025, the earlier rules apply to the liquidation report (Article 9(9) of Law No XIV-2818; Article 9(8) of Law No XIV-2819). Under the earlier wording of AĮ Article 17(5)(2) and LPFĮ Article 25(6)(2), 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.

A liquidator who performs these duties improperly must compensate in full the damage caused (CK Article 2.110(4)).

Creditors first

Assets go to members or others only once creditors have been paid. Their claims are met in the order of CK Article 2.113: secured by a pledge, employees, taxes and contributions, and finally all others (CK Article 2.113(1)). Dismissing employees and settling with creditors is covered in UAB liquidation process; the order of creditors is the same here.

Who gets an association’s assets

AĮ Article 17(4) sets this sequence:

1. All creditor claims are met.
2. Members’ claims to a share of the assets are met, up to the member’s entry contribution or fee.
3. The remaining assets and funds are transferred, before deregistration, to one or more other public legal entities. They are named by the general meeting of members or by the court that decided to liquidate.

AĮ Article 16(2)(2) sets the same limit from the other side: an association may not transfer a share of the assets of the association in liquidation that exceeds the member’s entry contribution or fee. A person who left earlier does not get back entry contributions or membership fees (AĮ Article 13(4)(4)).

Who gets a fund’s assets

In a fund, two groups of assets must be kept apart.

The fund’s assets and money, other than support received. Once creditors are paid, participants get back no more than their contributions to the fund. Everything else is transferred, before deregistration, to one or more other funds whose articles set the same public-benefit aims. The recipients are named by the participants’ meeting or by the court (LPFĮ Article 25(4)). Transferring a share of the assets of a fund in liquidation that exceeds a participant’s contribution is prohibited (LPFĮ Article 18(2)(3)).

Support received. It is used for the aims named by the donors, if those aims are set in the support agreement or will. If they are not, the support goes to other funds with the same aims. It may not be used to cover the fund’s administrative costs (LPFĮ Article 25(5)). If the fund manages an endowment (neliečiamasis kapitalas), the rules of LPFĮ Article 24(2) apply to it (LPFĮ Article 25(5)). The endowment and its income may not be used for administrative costs either (LPFĮ Article 24(2)).

Three steps follow from this before the decision. Review the support agreements and wills. Separate the support received from the other assets. Name the recipients in the liquidation decision itself, and check that the aims in their articles match those of the fund being liquidated.

The end and deregistration

An association in liquidation does not prepare an activity report (AĮ Article 17(6)); nor does a fund (LPFĮ Article 25(7)). The registrar receives (point 198 of the JAR nuostatai): an application to deregister, the liquidation act, an archive certificate and a municipal certificate on state land lease tax (each only if the registrar has not received such a notice directly), and the final liquidation financial statement, where the association or fund is not a public-sector entity under the Law on Public Sector Accountability (point 198.5 of the JAR nuostatai). A notice from the State Tax Inspectorate (Valstybinė mokesčių inspekcija, VMI) that the entity 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). On receiving these, the registrar deregisters the entity within five days (point 201 of the JAR nuostatai).

The liquidation must be completed 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, under point 200¹ of the JAR nuostatai as now in force the registrar deregisters the entity within five working days. From 15 October 2026 this will happen automatically within 30 days after the terms end, if the VMI has not reported 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, deregistration follows within 30 days of that report. No later than three months before the possible deregistration, a notice is sent by email (point 200¹ and point 23.28¹ of the JAR nuostatai, version from 2026-10-15). What else drives the timing is discussed in How long company liquidation takes.

More on liquidation

• Liquidation of companies: service page
• Liquidation initiated by the Centre of Registers
• Closing a foreign company’s branch in Lithuania: steps and what can stop it
• Are shareholders and the CEO liable for debts after deregistration?
• The company has been deregistered but money is left in its account – what can be done
• How to start liquidating a UAB: documents, employees and creditors
• During a UAB liquidation: employees, creditors, audit and the bank account
• Liquidating a UAB with a shareholder abroad: what can be done remotely
• 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 latest Centre of Registers (Registrų centras) extract, the articles, the list of members or participants with their entry contributions, membership fees or contributions, and the support agreements. Briefly describe the debts, assets and employees. We will tell you which decisions are needed and to whom the assets must be transferred.

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

More about this service: Liquidation of companies.