Non-cash contributions to a UAB’s capital: assets, valuation and loans

Yes, shares in a private limited company (uždaroji akcinė bendrovė, UAB) can be paid for not only in money but also with assets, including property rights. Work, services and assets withdrawn from civil circulation cannot be contributed. The contribution is valued by an independent property valuer, except in the cases in Article 45¹ ABĮ, and the total nominal value of the shares issued for it cannot exceed that value. When a company is formed, the initial contribution is always paid in money, and assets can be used only for the remaining part after formation. A shareholder loan can be turned into capital as a non-cash contribution (the loan claim) or in money. The ABĮ does not separately regulate set-off as a way to pay for shares.

What can be a non-cash contribution

Shares can be paid for in money and/or with non-cash contributions owned by the person paying for the shares (Article 45(1) of the Law on Companies of the Republic of Lithuania, ABĮ). A non-cash contribution can be any asset, including property rights. It cannot be an asset withdrawn from civil circulation, nor work or services (Article 45(3) ABĮ).

The Civil Code of the Republic of Lithuania (CK) treats things, money, securities, other assets and property rights, results of intellectual activity and other values as objects of civil rights (Article 1.97(1) CK). A contribution can therefore be, for example, real estate or a movable item, shares in another company, or a claim (right of claim). Only the owner of the asset can contribute it.

The rules differ at formation and on a capital increase

When a UAB is formed. Each founder’s initial contribution is paid in money and must be at least 1/4 of the total nominal value and premium of the shares that founder subscribed (Article 8(5) ABĮ). The initial contributions paid in must total at least the minimum capital set in Article 2 ABĮ (Article 8(6) ABĮ). The rest can be paid after the company is formed, in money or with non-cash contributions (Article 8(7) ABĮ). The shares must be fully paid within the period set in the founding document, which cannot exceed 12 months (Article 8(2) ABĮ). The valuation report is given to the founders and to the register keeper together with the other documents needed to register the company (Article 8(9) and (10) ABĮ; point 77 of the Regulations of the Register of Legal Entities, the JAR Regulations).

On a capital increase. Capital is increased by additional contributions only by issuing new shares (Article 50(1) ABĮ). In a UAB, each subscriber’s initial contribution in money must be at least 1/4 of the nominal value of the shares they subscribed, and the rest can be paid in money or with non-cash contributions (Article 45(4) ABĮ). The law also provides for the case where the whole amount for which the subscribed shares are issued is paid with non-cash contributions: then the whole contribution is transferred to the company within the period for initial contributions (Article 45(9) ABĮ). The law does not say directly how these two parts fit together. The shares must be fully paid within the period set in the subscription agreement, which cannot exceed 12 months (Article 45(8) ABĮ).

The documents for a capital increase by new shares are covered in Issuing new UAB shares: documents, signatures and doing it remotely. Here we cover only what is specific to a non-cash contribution.

Valuation: who values and what the report shows

On a capital increase, the non-cash contribution must be valued by an independent property valuer under the legislation on property valuation. The valuation report is given to the company before the shares are subscribed, and to the register keeper together with the other documents for registering the amended articles (Article 45(5) ABĮ). The same independent valuer requirement applies at formation (Article 8(8) ABĮ).

Article 45 ABĮ does not say which company body chooses the valuer. It requires the valuer to be independent and to value under the applicable legislation. Among other things, the report must contain (Article 8(8) ABĮ):

• details of the person whose assets were valued;
• a description of each item valued;
• a description of the valuation methods used;
• the number of shares to be acquired for the contribution, their nominal value and the share premium;
• a conclusion on whether the value of the contribution matches the total nominal value and premium of those shares.

The general meeting’s decision on the capital increase names every person paying for shares with a non-cash contribution, the nominal value of those shares and the amount for which they are issued (Article 45(6) ABĮ). The total nominal value of the shares paid for with a non-cash contribution cannot exceed the value of the contribution stated in the valuation report (Article 45(7) ABĮ). The register receives the valuation report or, where the law provides, a certificate (point 142 of the JAR Regulations).

From 1 November 2026, Articles 8 and 45 ABĮ call the register keeper the manager of the Register of Legal Entities data (juridinių asmenų registro duomenų tvarkytojas). The valuation requirements do not change.

When no valuation is needed

Article 45¹ ABĮ allows a contribution on a capital increase to go without valuation in two cases (Article 45¹(1) ABĮ):

• transferable securities or money-market instruments traded on a regulated market are contributed; their value is the weighted average market price over the 6 months before the payment date;
• an independent property valuer has already set the value of the contribution no earlier than 6 months before the payment date.

That decision is taken by the board or, if there is none, by the manager (Article 45¹(2) ABĮ). If exceptional or new material circumstances would significantly change the value, the contribution must still be valued on the initiative of the board or manager (Article 45¹(3) ABĮ). In the case set by law, shareholders holding at least 5 per cent of the shares can demand a valuation (Article 45¹(4) ABĮ). A certificate is prepared within 10 days of payment (Article 45¹(5) ABĮ) and filed with the register no later than one month after the payment date (Article 45¹(7) ABĮ). The manager is responsible for meeting these conditions (Article 45¹(8) ABĮ).

When the asset becomes the company’s property

Shares count as paid when the subscriber transfers the whole non-cash contribution named in the subscription agreement into the company’s ownership (Article 45(10) ABĮ). Ownership of a thing passes when it is handed over to the acquirer, unless the law or the contract provides otherwise. Ownership of real estate under a transaction is acquired at the moment set by law (Article 4.49(1) and (2) CK). Agree the transfer deed or other transfer document in advance.

The company cannot release a subscriber from the duty to pay for the shares, except as provided in Article 73(12) ABĮ (Article 45(11) ABĮ). If the shares are not paid for within the agreed period, the company is deemed to have acquired them, the agreement with that person is no longer valid and the contributions are not returned (Article 45(12) ABĮ). The Supreme Court of Lithuania treats this 12-month period as a cut-off period (Article 45(8) ABĮ) that a court cannot restore (case No. e3K-3-208-1075/2021, para. 36).

Real estate: notarial form

A share subscription agreement is in simple written form, except where all or part of the amount for the subscribed shares is paid with real estate. The notarial form required by the Civil Code then applies (Article 44(2) ABĮ). Transactions transferring real rights in real estate are made in notarial form (Article 1.74(1)(1) CK). At formation, real estate can be contributed only after the company is formed (Article 8(7) ABĮ), and its transfer to the company is also in notarial form.

How to turn a shareholder loan into share capital

Article 45 ABĮ names payment for shares in money and with non-cash contributions (Article 45(1) ABĮ). It does not regulate set-off, either in the current edition or in the edition in force from 1 November 2026. The general set-off rule is in the Civil Code (Article 6.130(1) CK). In 2010 the Supreme Court of Lithuania held in one case that the amount owed for new shares and the company’s debt to its lender were mutual claims of the same kind and that all the conditions for set-off were met (case No. 3K-3-407/2010). That case concerned facts from 2000–2001; the court did not apply the ABĮ and did not examine Article 45 ABĮ, so whether shares can be paid for by set-off today remains unsettled. Article 45 ABĮ directly names the two routes described below. Which route to take is worth assessing before the decision.

Route one: the loan claim as a non-cash contribution. The shareholder’s claim for repayment of the loan is a property right (Article 1.97(1) CK), and property rights can be a non-cash contribution (Article 45(3) ABĮ). All the rules in this article then apply: independent valuation (Article 45(5) ABĮ), total nominal value not above the valued amount (Article 45(7) ABĮ) and naming the person in the decision (Article 45(6) ABĮ). The rule on the initial contribution in money in Article 45(4) ABĮ and the rule on payment wholly with non-cash contributions in Article 45(9) ABĮ, described above, also apply. When the claim passes to the company itself, debtor and creditor become the same person, so the obligation ends (Article 6.126(1) CK).

Route two: in money. The company repays the loan and the shareholder uses that money to pay for the new shares (Article 45(1) ABĮ). This route needs no valuation of a non-cash contribution.

Both routes need a general meeting decision to increase the capital, taken by a majority of not less than 2/3 of the votes of the shareholders attending (Article 28(1)(10) ABĮ). If only the lending shareholder is to acquire the new shares, the other shareholders’ pre-emption right can be withdrawn by a majority of not less than 3/4 of the votes (Article 28(2) ABĮ). This is possible only when the person who will acquire the shares is known (Article 57(5) ABĮ), and the board or manager gives the meeting a written report with the reasons (Article 57(6) ABĮ). The other route is to offer the shares to the other shareholders first; the period for using the pre-emption right cannot be shorter than 14 days (Article 57(3) ABĮ). Withdrawing pre-emption on a new issue is covered in Issuing new UAB shares: documents, signatures and doing it remotely.

One restriction: if the same general meeting reduces capital to eliminate losses and immediately increases it with new shares, those shares can be paid for in money only (Article 45(1) ABĮ; Article 52(5) ABĮ). The loan claim cannot be used as a non-cash contribution in that case.

Turning a loan into capital can have tax consequences for the company and the shareholder; assess them in advance.

More on setting up a company

• Establishment of legal entities: service page
• Amending UAB articles in Lithuania: votes, notary and registration
• Changing the CEO of a UAB: who decides, how to register, when it applies
• UAB management board: is it required, how many members, who elects them
• Setting up a UAB step by step: documents, signatures and the notary
• UAB with several founders: splitting shares and changing your mind
• Converting a loan into UAB shares: set-off, valuation, pre-emption
• Foreign company raising a UAB’s capital: documents, signatures, deadlines

How to start

Send us the company’s articles of association, a recent Centre of Registers (Registrų centras) extract and the documents on the asset or the loan: the loan agreement, the outstanding balance and proof of ownership of the asset. Tell us how many shares you want to issue and to whom.

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

More about this service: Share capital increases and decreases.