A company’s registered office: whose consent you need, and why a purchased address can cost more

If the premises are not yours, registering the registered office requires the owner’s written consent. If the premises are jointly owned, the consent of all the co-owners is required. If the owner is a natural person, in practice the consent usually has to be notarised. If the premises are mortgaged, the bank’s consent is usually also required between the parties, although it is not submitted to the register. An address service for a few euros a month solves these problems but creates others — two specific ones, described below.

What a registered office is, and why it is more than a line in the register

Article 2.49(1) of the Civil Code (CK) — the registered office of a legal person is the place where its permanent management body is located, and the registered office is identified by giving the address of the premises. This means that the address should reflect reality, not be chosen for convenience.

The second point matters more than the first. Article 2.49(3) CK provides that all correspondence with a legal person is deemed proper when it is conducted at the registered office address or at the address of its electronic delivery box. A letter sent to the address shown in the register is deemed delivered — regardless of whether anyone has read it.

Whose consent is needed on incorporation

Point 61 of the Regulations of the Register of Legal Entities (JAR nuostatai) — if the founder is not the owner of the premises, or the premises belong to the founder under common part-ownership or joint common ownership, the notary or the registrar must be given the written consent of the owner or co-owner to make the premises available for registering the registered office.

Our letters show that the requirements differ depending on who the owner is. This is notarial practice, not the text of the law, and it varies somewhat between offices:

• Owner is a legal person: a simple written consent.
• Owner is a natural person: a notarised consent.
• Co-owners: the consent of every one of them. Not of the majority, not of the one who lives there. Every one.
• Premises are mortgaged: in addition to the above, the bank’s consent is usually also required between the parties. It is not submitted to the register, so it gets forgotten — yet the mortgage agreement often contains a condition on the use of the premises, and breaching it is a matter for the bank, not the register.

One client asked whether the consent could simply be sent in signed. The answer, from the same practice: the notary usually asks for the consent to be signed in the notary’s presence. Such a visit takes about half an hour. This means that if the owner of the premises is someone else, that person’s half hour has to be arranged in advance, not on the day of incorporation.

When the registered office is changed

Changing the registered office is not a technical step. Article 20(1)(2) of the Law on Companies (ABĮ) provides that the general meeting of shareholders has the exclusive right to change the company’s registered office. The director cannot do it.

Point 148 JAR nuostatai sets out what to submit to the register: an application to register the changes and the decision of the legal person’s body to change the registered office. Point 148.3 JAR nuostatai adds the same consent as on incorporation — if the legal person is not the owner of the premises or the premises are held in common ownership, the written consent of the owner or co-owner is submitted.

The first cost for anyone who buys an “address”

An address service looks cheap, and it really does solve the consent question. But our letters on the practice of the State Tax Inspectorate (VMI) show one thing clearly: a formal registration address is not suitable for VAT registration.

When assessing an application for registration as a VAT payer, the VMI looks at whether business is actually carried on at the registered office address. An address with nothing but a mailbox does not stand up to that question. Additional documents proving that the business is genuine are then requested, and registration is delayed or falls through.

That is a concrete cost. It is not visible on the day of incorporation, and it becomes visible when the company needs a VAT number for a contract.

The second cost: correspondence that does not arrive

A real address is safer than a purchased one for a simple reason — correspondence reaches the company. Reminders, letters of demand, register notices and VMI letters arrive and get read.

When they do not arrive, Article 2.49(3) CK applies: the letter is still deemed properly delivered. The company knows nothing, while time limits run. In the worst case, the registrar starts the liquidation procedure and the company is registered with the legal status “liquidation being initiated” (inicijuojamas likvidavimas) — most often because financial statements were not filed and the warnings were sent to an address where there is no one. The owner finds out from the bank or from a client, not from a letter.

When buying an address service, this is what to ask in advance: who forwards the correspondence received, how often, and whether it is forwarded by email on the same day. If there is no answer, the address is cheap only until the first important letter.

What becomes publicly visible

Article 2.71(1) CK — the data of the Register of Legal Entities, the documents held in the register and any other information submitted to the register are public.

In practice, this means that the contact details submitted to the register are visible not only in the register but also at the VMI and on company-details portals, from where they spread further. Some of the data need not be provided, so before incorporation it is worth deciding which phone number and which email address will be public. Removing them from the portals later is much harder than not providing them in the first place.

How to start

Tell us in whose name the premises are and whether they are mortgaged. We will tell you what form of consent will be needed, who has to sign it and whether a visit to the notary will be required.

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

More about this service: establishment of legal entities.