Setting up a public institution (VšĮ): members, articles, registration

A public institution (viešoji įstaiga, VšĮ) is a non-profit legal entity set up to serve the public interest. There is no limit on the number of founders, and they can be natural or legal persons. The founders sign a founding agreement (a founding act where there is a single founder) and the articles of association, and they become members (dalininkai) once they transfer their contribution. A VšĮ may use its surplus (profit) only for the aims set in its articles. If the documents follow the model forms, they can be filed electronically with the Centre of Registers (Registrų centras) without a notary.

What a public institution is and how it differs from an association

Article 2 of the Law on Public Institutions of the Republic of Lithuania (VšĮĮ) defines a public institution as a non-profit public legal entity with limited civil liability. Its aim is to serve the public interest by providing public services and/or carrying out other activities useful to the public. Article 2.34(2) of the Civil Code of the Republic of Lithuania (CK) classes it as a public legal entity.

A VšĮ may not carry on activities that do not match its aims (VšĮĮ Article 3(2)(1)). The aims of public legal entities must be described clearly and in full, naming the field and type of activity (CK Article 2.47(2)). So describe all the activity you plan in the articles.

An association has a different aim. It is set up to coordinate its members’ activities, to represent and defend their interests, or to serve other public interests (Article 2(1) of the Law on Associations of the Republic of Lithuania (AĮ)). An association needs at least three founders (AĮ Article 4(1)), while a VšĮ can be set up by one person.

Who can be a founder and a member

There is no limit on the number of founders of a VšĮ (VšĮĮ Article 6(1)). Founders can be both natural and legal persons (CK Article 2.60(2)).

Founders who have transferred a contribution to the VšĮ under the law and the articles become its members (VšĮĮ Article 4(1)). Where there is a single member, that member is called the owner of the VšĮ (VšĮĮ Article 4(2)). A member has the right to vote at the general meeting of members, to see the VšĮ’s documents and to challenge decisions of its bodies in court (VšĮĮ Article 4(3)).

Member’s rights are transferred under the procedure in the articles (VšĮĮ Article 4(4)). A person who acquires member’s rights must notify the VšĮ in writing within 5 days (VšĮĮ Article 4(5)). New members are admitted by the general meeting of members (VšĮĮ Article 12(1)(14)). The articles must set out how a person becomes a member and how member’s rights are transferred (VšĮĮ Article 8(2)(1) and (2)), so think this through at the founding stage. In 2023 the Supreme Court of Lithuania held that the Law on Public Institutions contained no rule allowing the articles to give a body of the VšĮ the power to expel a member (case No. e3K-3-158-403/2023). The court added that another member may ask a court to order that the rights of a member whose actions run against the institution’s aims be sold to that member, applying Chapter IX of Book Two of the Civil Code with the necessary adjustments (ibid., para 49). That case applied the edition of the law in force before 1 May 2024, so whether the same holds under the current edition is not settled.

Contributions, and whether profit can be distributed

A contribution can be money, or tangible and intangible assets valued under the Law on the Fundamentals of Property and Business Valuation. The value of a contribution in kind is the value stated in a valuation report made no earlier than 6 months before the contribution is transferred (VšĮĮ Article 24(3)). The Law on Public Institutions sets no minimum contribution. The members’ capital equals the value of the members’ contributions (VšĮĮ Article 24(2)).

Votes at the general meeting of members are split in proportion to the contributions, unless the articles say otherwise. The smallest contribution must always carry at least one vote (VšĮĮ Article 12(6)).

The law provides no mechanism for distributing profit to members. A VšĮ may not use its surplus (profit) for aims other than those set in its articles (VšĮĮ Article 3(2)(2)). It is also prohibited from transferring assets to a member or a related person into ownership below market value, or in trust or for free use, and from borrowing money from them at interest (VšĮĮ Article 3(2)(3) and (4)). When a VšĮ is liquidated, the members get back assets worth no more than the members’ capital (VšĮĮ Article 27(8)). How that works is covered in Liquidating a public institution (VšĮ): who decides, liquidator, assets.

Founding agreement, articles and the founding meeting

The legal basis for setting up a VšĮ is the founding transaction: a founding agreement or, where there is a single founder, a founding act (VšĮĮ Article 6(2) and (3)). The founding agreement states the founders, the name and registered office of the VšĮ, its legal form, its aims, the founders’ obligations and the deadlines for meeting them, and the other details listed in VšĮĮ Article 7(1). Model forms of the founding act and founding agreement are approved by an institution authorised by the Government (VšĮĮ Article 7(5)).

In addition to the details required by CK Article 2.47(1), the articles set out how contributions are made, how the general meeting of members is called and takes decisions, the powers of any collegial bodies, and the other matters listed in VšĮĮ Article 8(2). The articles are signed by all the founders or their authorised representatives (VšĮĮ Article 6(6)). A notary does not witness the signatures of the natural persons who sign the articles (VšĮĮ Article 8(8)).

A founding meeting is held before registration. It elects the person who will act as the head of the VšĮ in the interim (VšĮĮ Article 6(7)). Where there is a single founder, no meeting is held, and that founder’s written decisions count as decisions of the founding meeting. The meeting may also be skipped if the founding agreement names the person who will act as head in the interim (VšĮĮ Article 6(9)).

The founding documents lapse if they are not filed with the register within six months of the date they were made, unless other laws set a different deadline (CK Article 2.46(5)). When the owner of the premises must consent to the registered office is covered in A company’s registered office: whose consent you need.

The name

The name of a VšĮ must not mislead as to its legal form, aim, identity, or similarity to the names of other legal entities and to trade marks (CK Article 2.39(3)). It must follow the norms of standard Lithuanian and may not be just a common word for the type of activity or a place name (CK Article 2.40(2)). The Law on Public Institutions does not separately require the words “viešoji įstaiga” in the name; the legal form is stated in the founding agreement (VšĮĮ Article 7(1)(3)). How to check whether a similar sign is already registered as a trade mark is covered in our article A slogan as a trade mark: the search before filing and recording a licence.

The name of a VšĮ being set up can be entered in the register temporarily, for six months (CK Article 2.41(3)). The short name of the State, “Lietuva”, may be used only if at least one of the conditions in point 105 of the Regulations of the Register of Legal Entities (JAR nuostatai) is met.

Governance: the meeting, the head and collegial bodies

A VšĮ must have a general meeting of members and a single-person management body (the head, vadovas). It may also have a collegial management body alongside the head (VšĮĮ Article 11(1) and (2)). Where a board is not mandatory, the decision to form one is taken by the general meeting of members (VšĮĮ Article 13(3)).

The general meeting of members amends the articles, appoints and dismisses the head, approves the annual financial statements, admits new members and decides the other matters listed in VšĮĮ Article 12(1). Decisions are taken by a simple majority of the votes of members present. Decisions on reorganisation, conversion, liquidation or revoking it, and changing how votes are split need a qualified majority. The articles set its size, but it may not be less than 2/3 of the votes of all members attending (VšĮĮ Article 12(5)). The written decisions of the owner of a VšĮ count as decisions of the general meeting of members (VšĮĮ Article 12(12)).

The head runs the VšĮ and acts in its name. In a VšĮ being set up, the head takes office on the day the institution is registered (VšĮĮ Article 20(1)). A VšĮ registered as a non-governmental organisation and not classed as a public-sector entity may sign a volunteering agreement with its head instead of an employment contract (VšĮĮ Article 20(3)). The person authorised by the general meeting of members must notify the registrar of the appointment or dismissal of the head and of collegial management body members within 30 days at the latest (VšĮĮ Article 9(4)).

Registration: through a notary or online

To register a VšĮ, the founding agreement, the articles and the other documents listed in CK Article 2.64(2) are filed with the register (VšĮĮ Article 9(1)). The documents confirming that the data are accurate and that the founding documents comply with the law are drawn up or certified by a notary, except in the cases provided for in the JAR nuostatai (CK Article 2.64(2)(4)).

The general rule is that when a legal entity is set up, the documents go to a notary (JAR nuostatai, point 45.1), who confirms that the data are accurate and that the founding documents comply with the law (JAR nuostatai, point 54).

Without a notary, the documents can be filed electronically and directly with the Centre of Registers. For that, all the conditions in point 47 of the JAR nuostatai must be met:

• the founding transaction and the articles follow the model forms;
• the name will not use the short name of the State, “Lietuva”;
• the fields and types of activity are chosen from the Classification of Economic Activities;
• no founder is the State or a municipality.

If you want articles that depart from the model form, the documents will have to go through a notary. Once it has the documents and confirmation that the registration charge has been paid, the registrar checks them within one working day at the latest where they were filed directly and electronically, and otherwise within three working days (JAR nuostatai, point 128; CK Article 2.64(3)). A VšĮ is treated as established from its registration (CK Article 2.63(1)).

Members’ data in JADIS

Once the VšĮ is registered, data on its members are filed with the manager of the Information System of Legal Entities’ Participants (JADIS). The deadline is no later than 5 days from the day the contribution is transferred and the person becomes a member, and, when the members or their data change, 5 days from the change (VšĮĮ Article 10(5)). The data filed are the member’s details, the dates on which the rights were acquired and transferred, and the value of the contribution (VšĮĮ Article 10(1)). The head of the VšĮ is responsible for filing the data (VšĮĮ Article 10(6)).

The data are filed in electronic form only, and the list of members is signed with a qualified electronic signature (JADIS Regulations, point 11). Data on beneficial owners are filed together with the members’ data (JADIS Regulations, point 12). Who files them and how to get an extract is covered in Beneficial owners in JADIS: who files the data and how to get an extract.

More on setting up a company

• Establishment of legal entities: service page
• Setting up an association or charity and support fund in Lithuania
• Branch, representative office or subsidiary: starting out in Lithuania
• Converting an MB into a UAB: decision, capital, creditors, timing
• Reducing a UAB’s share capital in Lithuania: purposes, creditors, deadlines
• Non-cash contributions to a UAB’s capital: assets, valuation and loans

How to start

Send us the name options for the future VšĮ, its aims, the founders’ details, each founder’s contribution, the planned registered office and the head. Tell us whether the model articles will do or you need your own.

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

More about this service: Establishment of legal entities.