Setting up a UAB step by step: documents, signatures and the notary

A private limited liability company (UAB) needs three core documents: a deed of incorporation or an incorporation agreement, the articles of association, and an application to register the company. They are signed by the founders themselves or by persons they have authorised. A founder who lives abroad may need no separate power of attorney – the representatives can be named in the incorporation document itself. A notary is needed if the articles are drafted to your own requirements. A UAB can be set up without a notary when model documents are used, the name does not contain the word “Lietuva”, the objects are chosen from the Classification of Economic Activities, the shares are paid for in cash, and everyone who signs has a qualified electronic signature. How long it takes and when the company gets a bank account is covered separately: Setting up a UAB in Lithuania: how long it takes and whether the founder needs to travel.

Which documents you need

Article 2.64(2) of the Civil Code of the Republic of Lithuania (CK) lists what is filed with the register: an application in the prescribed form, the incorporation documents, and documents confirming that the company may be registered.

Under Article 7(1) of the Law on Companies (ABĮ), an incorporation agreement is concluded where there are two or more founders. Where there is a single founder, a deed of incorporation is drawn up. This document must be in writing – Article 1.73(1)(2) CK says so.

The articles of association are the second core document. Article 4(2) ABĮ sets out what they must contain: the name, the objects, the amount of the share capital, the number of shares, the powers of the company’s bodies and more.

In addition, if the founder does not own the premises used as the registered office, or owns them jointly with others, the written consent of the owner or co-owner is needed (point 61 of the Regulations of the Register of Legal Entities). We have written about this separately: A company’s registered office: whose consent you need.

Precise details are needed for each founder. Article 7(2¹)(1) ABĮ requires a natural person’s first name, surname, personal code and correspondence address. For a foreign natural person, the date of birth and the state that issued the identity document are added (Article 7(2¹)(2) ABĮ). For a foreign legal person – the state, the register and the date of registration.

A foreign founder also provides:

• if a natural person – a copy of the identity document, unless the person has already been assigned a Lithuanian personal code. Point 60 of the Regulations of the Register of Legal Entities (JAR nuostatai, JARN) states that this copy is not certified by a notary;
• if a legal person – an extract from its register or, where that state’s law does not issue extracts, another document confirming registration (point 60 JARN). The notary may also ask for the foreign company’s articles of association, to see who has the right to represent it.

Official documents issued abroad are accepted by Lithuanian notaries if they bear an apostille or have been legalised, unless Lithuania’s international treaties or European Union legal acts provide otherwise. This is laid down in Article 54 of the Law on the Notarial Profession (NOT). When an apostille, legalisation or a notarised translation is needed is covered separately: Translation, notary and apostille (in Lithuanian). Documents not drawn up in the state language are filed with translations signed by the translator (point 63 JARN).

The order of steps

The sequence follows from Article 11(2) ABĮ. The company is registered only once, among other things, the incorporation agreement or deed has been concluded, the articles signed, all initial contributions paid and the company’s manager elected. The work runs like this:

1. The details are gathered: founders, manager, name, registered office, share capital, business activity.
2. The incorporation documents are drafted. If the company is being set up through a notary, the drafts are agreed with the notary’s office in advance. A notary may correct drafts of bespoke articles. It is better to do this before signing, not after.
3. The founders or their representatives sign the deed or agreement and the articles.
4. An accumulative account is opened and the initial contributions are paid into it.
5. The notary certifies the documents and files them with the register. In the electronic route, the founders or their representative file the documents directly with the register.
6. The register registers the company.
7. After registration, the incorporation documents are handed over to the manager. Article 6(3) ABĮ sets a time limit of no later than 7 days from registration for this and requires a transfer deed.

Who signs the incorporation documents

Article 7(4) ABĮ: the incorporation agreement is signed by all the founders or by persons they have authorised. The same applies to the articles (Article 4(8) ABĮ). The authenticity of the signatures of the persons who signed the articles is not certified by a notary (Article 4(11) ABĮ).

Where the founder is a natural person, they sign themselves. Where the founder is a company, it acts through its bodies (Article 2.81(1) CK). So the document is signed by whoever may represent that company under its articles.

The obstacle here may be not Lithuanian law but foreign law. If under the foreign company’s articles it can only be represented by two directors jointly, both sign the incorporation documents. The alternative: both directors sign a resolution instructing one of them to sign the remaining documents. Who may represent the foreign company appears from its register extract and articles. When certifying a transaction, the notary must check the legal capacity of the legal person and the representative’s authority (Article 31(2) NOT). So it is worth sending them to the notary as scans first, and adding the apostille only once the notary confirms the documents are suitable.

Where the founder is a Lithuanian company, its manager acts alone, unless the articles provide for joint representation (Article 37(10) ABĮ).

One more point worth knowing for foreign founders: in Lithuania the company’s manager is a single-person management body (Article 37(1) ABĮ). You cannot have two directors of equal standing. A possible solution: one person becomes the manager, and the other is granted a procuration. A procuration is a power of attorney to perform all legal acts connected with the company’s business (Article 2.176(1) CK). It has limits, however: a procurator may not, for example, transfer or encumber the company’s real property, or sign its balance sheet and tax return (Article 2.179(1) CK). A procuration must be registered in the Register of Powers of Attorney (Article 2.178(3) CK).

Is a power of attorney needed if the founder lives abroad

A separate power of attorney may not be needed. The incorporation agreement or deed must name the persons who have the right to represent the company being set up (Article 7(2)(3) ABĮ). We can be named there. The founder then signs the incorporation documents by hand and sends the originals by post. At the notary’s office the named representative signs them and represents the company before the register. The law does not require the founder’s signature on such documents to be certified by a notary: simple written form is enough for an incorporation transaction (Article 1.73(1)(2) CK), and the authenticity of the signatures on the articles is not certified by a notary (Article 4(11) ABĮ). So no apostille is needed for such a signature either.

A separate power of attorney becomes necessary when the founder does not want to sign the incorporation documents personally. Then the form matters. Article 2.138(1)(2) CK requires a natural person’s power of attorney to perform acts connected with legal persons to be certified by a notary. The exception is a power of attorney drawn up by information technology means and registered in the Register of Powers of Attorney (Įgaliojimų registras), and other cases laid down by law (Article 2.138(3) CK).

A founder living abroad can obtain a notarised power of attorney in three ways:

• from a local notary, with that notary’s certification then confirmed by an apostille. If the state has not joined the Hague Convention, the document is legalised instead, unless an international treaty or European Union law provides otherwise (Article 54 NOT; Article 1 of the Hague Convention of 5 October 1961 Abolishing the Requirement of Legalisation for Foreign Public Documents);
• at a Lithuanian embassy or consulate – consular officers certify powers of attorney (Article 27(1) NOT);
• from a Lithuanian notary remotely. A notary may perform notarial acts this way, except certifying wills and a few other acts (Article 28¹(1) NOT). The person’s will is then confirmed by a qualified electronic signature (Article 28¹(4) NOT). Whether the act is performed remotely is decided by the notary (Article 28¹(3) NOT).

Where the power of attorney is given by a Lithuanian company, it is signed by its manager (Article 2.140(1) CK). A foreign company’s power of attorney is signed by whoever may represent it under its articles.

A bank account during incorporation

Yes, an account is opened before registration. Article 7(5) ABĮ: the incorporation agreement gives the right to open an accumulative account of the company being set up with a credit institution or an electronic money institution. The initial contributions are paid into it.

If the incorporation documents name us as representatives, we can open this account without you, if the particular bank’s customer identification procedure allows it.

This account does not yet give you an ordinary bank account with online banking and cards. After registration the manager applies to the bank for a current account, online banking and cards. The bank must identify the client and obtain data on its manager (Article 9(1)(1) and Article 10(3) of the Law on the Prevention of Money Laundering and Terrorist Financing of the Republic of Lithuania, PPTFPĮ). If the manager does not attend in person, a power of attorney for the representative is needed.

If, in the electronic route, it is not possible to open the accumulative account and pay the initial contributions into it electronically, a document confirming payment of the initial contributions is filed with the register (point 77.3 JARN).

Is a notary mandatory

As a general rule – yes. Point 45.1 JARN provides that when legal persons are set up, the documents are submitted to a notary. The notary certifies that the incorporation documents comply with the law (Article 26(1)(17) NOT). The notary enters a certifying endorsement on the application stating that the company may be registered (point 54 JARN).

It can be done without a notary only when all the conditions of point 46 JARN are met:

• the deed or agreement of incorporation and the articles follow the model forms approved by the Government or its authorised institution;
• the name does not contain the word “Lietuva” (Lithuania);
• the objects are chosen from the Classification of Economic Activities (Ekonominės veiklos rūšių klasifikatorius);
• the shares are paid for with a cash contribution.

The documents are then signed with a qualified electronic signature (point 68 JARN). When filing the documents, the same point also allows high-assurance electronic identification means of another European Union Member State that the register recognises. The documents themselves must still be signed with a qualified electronic signature. Once it has received the documents and confirmation that the registration fee has been paid, the register checks them without delay and no later than within one working day (point 128 JARN).

The model articles suit companies with a simple structure. They do not work if you want your own arrangements in the articles. For example, additional powers of the board, voting rules, or a special procedure for buying out shares on a shareholder’s death. In that case incorporation goes through a notary. Where the founder is a foreign company, we also recommend the notary route. One person then checks all the foreign documents at once.

More on setting up a company

• Establishment of legal entities: service page
• UAB with several founders: splitting shares and changing your mind
• Setting up a UAB in Lithuania: the registration term and whether to travel
• Foreign-owned UAB: bank account, identification and documents
• Can you sign a contract in a UAB’s name before it is registered?
• Registered office: whose consent you need and the risks of a bought address

How to start

Send us the details of the founders and of the future manager, the name you would like and the amount of share capital. If the founder is a foreign company, send scanned copies of its register extract and articles. We will tell you whether the electronic route will work, which power of attorney will be needed and what will have to be apostilled.

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

More about this service: establishment of legal entities.