Setting up an MB in Lithuania: members, contributions, documents

A small partnership (mažoji bendrija, MB) can be set up by one to ten individuals. Two or more founders sign a founding agreement, a single founder signs a founding act, and all of them sign the MB’s regulations (nuostatai). The Law on Small Partnerships sets neither a share capital nor a minimum contribution: the founders decide each member’s contribution, how it is paid and by when. The documents go to the Centre of Registers (Registrų centras) either through a notary or, if the model documents are used and the other conditions of point 46 of the JAR nuostatai are met, directly online. The MB exists from its registration in the Register of Legal Entities, and data on its members must then be filed with the Information System of Legal Entities’ Participants (JADIS) within 5 days.

Who can be a member of an MB

Only individuals can found an MB, and there can be no more than 10 of them (Article 3(3) of the Law on Small Partnerships of the Republic of Lithuania (MBĮ)). The same limit applies once the MB exists: all its members are individuals and there can be no more than 10 members (MBĮ Article 2(1) and (2)). A company therefore cannot be a member of an MB. A legal entity can, for example, set up a UAB. The documents this needs and who signs them are covered in Setting up a UAB step by step: documents, signatures and the notary.

A member of an MB can be an individual who has made or has undertaken to make a contribution (MBĮ Article 7(1)). All founders become members of the MB from its registration in the Register of Legal Entities (MBĮ Article 3(6)).

Contributions: how much and when

A member’s contribution is property owned by the member and transferred to the MB. It can be money or other property (MBĮ Article 8(1)). Work and services cannot be a contribution (MBĮ Article 8(2)). Once transferred, the contribution becomes the MB’s property (MBĮ Article 8(3)).

The Law on Small Partnerships sets no minimum contribution. The founding agreement states each founder’s contribution, its amount (for a non-cash contribution, its value), and the procedure and time limits for making it (MBĮ Article 4(1)). The law does not require the contribution to be paid before registration, because a person who has only undertaken to contribute can already be a member (MBĮ Article 7(1)). The contribution can therefore be made after registration, within the time limit set in the founding agreement.

The size of a contribution matters. The share of profit allocated to members is divided in proportion to their contributions, unless the regulations set a different rule (MBĮ Article 26(4)). If the MB later accepts a non-cash contribution, its value, terms and time limits are set by the members’ meeting (MBĮ Article 13, point 5), and that decision must be unanimous (MBĮ Article 19(1), point 2).

Founding documents: agreement or act, and the regulations

The legal basis for setting up an MB is a founding agreement or a founding act (MBĮ Article 3(1)). An agreement is made when there are two or more founders, an act when there is one (MBĮ Article 3(2)). The founding agreement names the founders, the MB’s name, its registered office, its manager (if it will have one), each founder’s contribution, the person entitled to act for the MB being set up, and the other items listed in the law (MBĮ Article 4(1)). If there are two or more founders and the members’ meeting will manage the MB, the agreement also names the MB’s representative and their rights and duties (MBĮ Article 4(2)). It is signed by all founders or their authorised representatives (MBĮ Article 4(5)).

The regulations are the document the MB follows in its activities (MBĮ Article 5(1)). They set out the MB’s bodies and their powers, how the members’ meeting is called, how new members are admitted and how members leave, how advance profit is drawn, where public notices are published, and the other mandatory items (MBĮ Article 5(2)). If there is a single member, the procedures for calling meetings, withdrawal and some others need not be set in the regulations (MBĮ Article 5(4)). The regulations of an MB being set up are signed by all founders or their authorised representatives (MBĮ Article 5(6)). A notary does not certify these signatures (MBĮ Article 5(8)).

Model forms of the founding agreement and founding act are approved by the Government or an institution it authorises (MBĮ Article 4(7)), and so are the model regulations (MBĮ Article 5(9)). Whether you use the model documents decides which registration route is open to you (see below).

Must the name include “MB”?

Yes. The name of an MB must contain the words “mažoji bendrija” or the abbreviation “MB” (MBĮ Article 2(3)). The name must also not mislead the public about the legal form, or by being identical or similar to other legal entities’ names or trade and service marks (Article 2.39(3) of the Civil Code of the Republic of Lithuania (CK)). 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 Centre of Registers checks that the name is not identical to the names of other legal entities. Words or abbreviations showing the legal form are disregarded in that check (point 110 of the Regulations of the Register of Legal Entities (JAR nuostatai)). A name that differs from an existing one only by “MB” or “UAB” is therefore treated as identical. The name is protected from the day the application to register the legal entity is filed (CK Article 2.39(4)).

Management bodies: members’ meeting, manager or representative

An MB can use one of two management models. In the first, there is only the members’ meeting, which is then also the management body. In the second, there is a members’ meeting and a single-person management body, the MB manager (vadovas) (MBĮ Article 12(2)). The chosen model is stated in the regulations (MBĮ Article 12(1)).

If the MB has no manager and has two or more members, it must have a representative (atstovas) (MBĮ Article 21(1)). The representative is not a body of the MB (MBĮ Article 21(2)). Only a member can be the representative, and the MB can have only one (MBĮ Article 21(3) and (4)). The representative concludes the transactions that the members’ meeting has decided on (MBĮ Article 21(7)).

If the MB has a manager, the manager must be an individual and can be a member (MBĮ Article 22(1)). The manager has the right to conclude transactions alone (MBĮ Article 22(7)). An MB manager signs a civil (services) contract (MBĮ Article 22(2)), whereas a UAB manager signs an employment contract (Article 37(4) of the Law on Companies of the Republic of Lithuania (ABĮ)).

Do members vote according to the size of their contributions?

Under the law, no. Each member has one vote at the members’ meeting. A different allocation of votes can be set in the regulations only if the MB has a manager (MBĮ Article 16(3)).

A decision is adopted when it receives more than 1/2 of all votes, unless the law or the regulations require a larger majority (MBĮ Article 17). Amending the regulations, distributing profit, reorganisation, conversion and liquidation need a qualified majority of at least 2/3 of all members’ votes (MBĮ Article 18(1)). Admitting new members and setting the value of non-cash contributions require unanimity (MBĮ Article 19(1)). If there is only one member, no meeting is called: that member’s written decisions have the same effect as decisions of the members’ meeting (MBĮ Article 15(3)).

Registration: online or through a notary

An MB is registered once the founding agreement has been made, the regulations signed and the required documents filed with the registrar (MBĮ Article 3(5)). The registrar receives an application to register the legal entity, the founding agreement or act, the founding document (that is, the MB’s regulations) and, if a licence must be issued before the entity is set up, the licence (point 75 of the JAR nuostatai). If the founder does not own the premises, or owns them jointly with others, the written consent of the owner or co-owner is needed (point 61 of the JAR nuostatai). More on this in A company’s registered office: whose consent you need.

There are two routes:

• Online, directly to the Centre of Registers. This is possible if the founding documents follow the model MB regulations and the model founding agreement or act, the name does not use the word “Lietuva”, and the objects of activity are chosen from the Classification of Economic Activities (point 46 of the JAR nuostatai). Documents filed online are signed with a qualified electronic signature; EU citizens may also use recognised high-assurance electronic identification means (point 68 of the JAR nuostatai).
• Through a notary. When a legal entity is set up, the documents are filed with a notary (point 45 of the JAR nuostatai) unless the online route applies. The notary confirms that the data are true, that the founding documents comply with the law and that the MB can be registered (point 54 of the JAR nuostatai).

How long does setting up an MB take?

The law sets only the registrar’s time limits. A legal entity must be registered within three working days after all documents are filed and the registration charge is paid (CK Article 2.64(3)). When an MB’s documents are filed online directly with the registrar, the registrar checks them and decides without delay, and no later than within one working day (point 128 of the JAR nuostatai). The law sets no time for the preparation stage. That depends on when all founders sign the documents and when the premises owner’s consent is obtained.

An MB is treated as established from its registration in the Register of Legal Entities (MBĮ Article 3(4); CK Article 2.63(1)).

Data on members in JADIS

Data on MB members do not reach JADIS automatically. They must be filed: each member’s name, surname, personal code, address for correspondence, the date the person became a member, and the amount or value of the contribution (MBĮ Article 6¹(1)). The data are filed no later than 5 days after the MB is registered, and when they change, within 5 days of the change (MBĮ Article 6¹(2)). The manager is responsible for this; if there is no manager, the representative or the sole member is (MBĮ Article 6¹(3)).

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

How a new member joins an MB

New members are admitted by a decision of the members’ meeting, following the procedure in the regulations (MBĮ Article 9). This is an exclusive power of the members’ meeting (MBĮ Article 13, point 4). The decision must be unanimous (MBĮ Article 19(1), point 1), and all members must take part in the meeting (MBĮ Article 19(2)). After admission, the number of members still cannot exceed 10 (MBĮ Article 2(2)).

The other route is for an existing member to transfer their member’s rights to another individual under the regulations and the law (MBĮ Article 10(1); MBĮ Article 10(3)). If the member has not yet paid the full contribution, the duty to pay the rest passes with the rights (MBĮ Article 10(1)). In both cases the changed member data are filed with JADIS within 5 days (MBĮ Article 6¹(2)).

More on setting up a company

• Establishment of legal entities: service page
• Setting up a public institution (VšĮ): members, articles, registration
• 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

How to start

Send us the list of founders, the proposed name and registered office address, each founder’s contribution, and tell us whether the MB will have a manager. We will tell you whether the model documents fit, and prepare the founding agreement or act and the regulations.

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

More about this service: Establishment of legal entities.