Registered office: whose consent you need and the risks of a bought address

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. Point 61 of the Regulations of the Register of Legal Entities (JAR nuostatai) requires written consent and does not prescribe a notarial form. If the premises are mortgaged, no bank consent is submitted to the register, but whether one is needed under the mortgage agreement depends on that agreement. An address service 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.

What follows from this:

• Form of consent: written consent, whether the owner is a legal or a natural person. Whether the consent will have to be certified by a notary is worth checking in advance with the notary who will certify the founding documents.
• Co-owners: the consent of every one of them. Not of the majority, not of the one who lives there. Every one: an object of common part-ownership is used by agreement of the co-owners (Article 4.75(1) CK).
• Premises are mortgaged: point 61 JAR nuostatai does not require the bank’s consent, so it is not submitted to the register. Whether it is needed depends on the mortgage agreement: if it contains a condition on the use of the premises, breaching it is a matter for the bank, not the register.

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 risk of buying an “address”

An address service really does solve the consent question. But one thing is worth knowing: a formal registration address may not meet what the law treats as a registered office.

Article 2.49(1) CK treats as the registered office the place where the permanent management body is located, so an address with nothing but a mailbox may not meet that definition.

That is a concrete risk, and it is not visible on the day of incorporation.

The second risk: 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), for example because financial statements were not filed (Article 2.70(1)(1) CK). The notice of the intended liquidation is sent to the electronic delivery box or, if no such address is shown in the register, to the registered office and to the addresses of the members of the management body (Article 2.70(2) CK), and so possibly to an address where there is no one. The owner may then find out late, for example from the bank or a client.

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 convenient 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.

This means that the contact details submitted to the register are public, so other sources, such as company-details portals, can pick them up. 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.

More on setting up a company

• Establishment of legal entities: service page
• UAB articles of association and shareholders’ agreement: what differs
• A foreign company’s branch in Lithuania: the document on which registration can stall
• Issuing new UAB shares: documents, signatures and doing it remotely
• You cannot increase share capital from retained earnings while the balance sheet shows losses
• Beneficial owners in JADIS: who files the data and how to get an extract

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.