UAB with several founders: splitting shares and changing your mind

When two or more persons set up a private limited liability company (UAB), they conclude an incorporation agreement (steigimo sutartis). In it the founders themselves decide how many shares each one acquires and when each pays for them. The shares do not have to be equal. Votes at the general meeting are normally counted by the number of shares, so the split decides who takes decisions. Until the company is registered, the agreement can be changed, or the founders can drop the incorporation. Once the company is registered, its incorporation can no longer be cancelled: what remains is liquidation, a transfer of shares or, in exceptional cases, the court.

Which documents are needed and who signs them we covered in UAB formation step by step. How long it takes is in a separate article. How the articles of association differ from a shareholders’ agreement is here. The minimum share capital, paying in assets, and what happens to the money if the company is not registered are answered in the FAQ on our incorporation service page (in Lithuanian).

Who decides how many shares each founder gets

When a company is set up by two or more founders, an incorporation agreement is concluded (Article 7(1) of the Law on Companies of the Republic of Lithuania (ABĮ)). Each founder must acquire shares and become a shareholder (ABĮ Article 6(2)).

The incorporation agreement must state, among other things (ABĮ Article 7(2)):

• the amount of the share capital;
• the nominal value of a share and the amount for which it is issued;
• the number of shares by class and the rights they carry;
• the number of shares acquired by each founder;
• the procedure and time limits for each founder to pay for the shares and to pay in the initial contributions;
• the procedure for returning the initial contributions if the company is not registered.

The founders do not sign a separate share subscription agreement: the incorporation agreement is also the share subscription agreement (ABĮ Article 8(1)). So the split of shares is agreed once, in a single document. In our practice it is one of the first questions we ask founders: what share of the company will each of them hold.

How to turn percentages into a number of shares

The share capital is the number of shares multiplied by the nominal value. Two rules decide how to choose that number. All ordinary shares must have the same nominal value (ABĮ Article 42(1)). And a share cannot be split into parts (ABĮ Article 40(5)).

So the founders first agree the proportion, and then choose a number of shares that allows it to be expressed in whole numbers. If the founders split fifty-fifty, an even number of shares is enough. If three founders want equal stakes, the number of shares must be divisible by three. If a more precise proportion is wanted, more shares are issued with a lower nominal value. The nominal value is set to the cent (ABĮ Article 40(6)). The capital still cannot be lower than the statutory minimum (ABĮ Article 2(4)).

Contributions: how much each founder pays, and when

Each founder’s initial contribution is paid in money. It must be no less than 1/4 of the total nominal value of the shares that founder has subscribed for, plus the full amount by which the subscribed shares exceed their nominal value (ABĮ Article 8(5)). The total of the initial contributions paid must be no less than the minimum share capital (ABĮ Article 8(6)). The initial contributions are paid into the accumulative account (kaupiamoji sąskaita) of the company being formed (ABĮ Article 8(4)).

All shares must be paid up within the time limit set in the incorporation agreement, which cannot be longer than 12 months from the date the agreement is concluded (ABĮ Article 8(2)). Because the procedure and time limits are set for each founder separately (ABĮ Article 7(2)), one founder can pay the full amount at once and another only the initial contribution.

This affects voting. At meetings held before the end of the time limit for paying for the first issue of shares set in the incorporation agreement, voting rights attach to subscribed shares on which the initial contributions have been paid. At later meetings only fully paid shares carry voting rights (ABĮ Article 17(1)). If a founder has not paid for their shares in full by the end of the time limit, their unpaid shares carry no votes at later meetings.

Unequal stakes: what they mean for decisions

If all voting shares have the same nominal value, each share carries one vote (ABĮ Article 17(2); from 1 November 2026, except multiple-vote shares, see below). This produces several practical thresholds.

• Quorum and simple majority. The meeting can take decisions when the shareholders present hold shares carrying more than 1/2 of all votes (ABĮ Article 27(1)). A decision is adopted when more votes are cast for it than against, unless the law or the articles of association require a larger majority (ABĮ Article 27(8)). So a shareholder with more than half of the votes forms the quorum alone and carries simple-majority decisions.
• Two thirds. A qualified majority of no less than 2/3 of the votes carried by the shares of the shareholders present at the meeting is needed, for example, to amend the articles of association or to set the class, number and nominal value of shares to be issued (ABĮ Article 28(1)).
• Three quarters. A majority of no less than 3/4 of the votes of the shareholders present and entitled to vote on the matter is needed, for example, to withdraw the shareholders’ pre-emption right to new shares (ABĮ Article 28(2)).
• Deadlock. When two founders hold half each and both attend, neither can take a decision alone. But if one of them takes no part, that is, does not attend and has not voted in advance in writing (ABĮ Article 27(5)), there is no quorum, and a repeat meeting has no quorum requirement (ABĮ Article 27(1)). At that meeting the shareholder who attends can take decisions on the same agenda alone (ABĮ Article 27(1) and (8)), including qualified-majority decisions, because that majority is counted from the votes of the shareholders present (ABĮ Article 28(1) and (2)). So in our practice founders agree in advance how a deadlock will be resolved, usually in a shareholders’ agreement. The articles of association may also set a larger majority (ABĮ Article 28(3)), but in our reading it too is counted from the votes of those present (ABĮ Article 28(1) and (2)), so it does not protect a shareholder who stays away.

If one shareholder is to have different rights, preference shares can be issued. Their classes and rights are set in the articles of association, and preference shares without voting rights cannot make up more than 1/2 of the share capital (ABĮ Article 42(2)). The voting rights of preference shares are also set in the articles of association (ABĮ Article 17(3)).

From 1 November 2026 there will be one more option: multiple-vote shares. A UAB will be able to issue new shares, or convert ordinary shares already issued, into shares carrying more than one vote (conversion follows a conversion procedure approved by the general meeting). Such shares form a separate class of ordinary shares. This will require the approval of the holders of each class of shares, voting separately by a qualified majority. Multiple-vote shares that are transferred become ordinary shares, while the rights attached to inherited shares do not change (ABĮ Article 42(2¹), as in force from 1 November 2026). One multiple-vote share will carry no more than ten votes (ABĮ Article 17(2), as in force from 1 November 2026). It is a way for one shareholder to hold more votes without changing their share of the capital.

Can you change your mind before the company is registered?

A company is deemed incorporated only from its registration in the Register of Legal Entities (Juridinių asmenų registras) (ABĮ Article 11(1)). Until then the founders are still parties to an agreement.

Changing the terms. If the incorporation agreement is amended before registration, the amendments are submitted to the register together with the agreement (ABĮ Article 7(6)). The incorporation agreement is signed by all founders or by persons they have authorised (ABĮ Article 7(4)), so in our practice the amendment is also signed by all of them.

One founder drops out. Each founder must acquire shares (ABĮ Article 6(2)), and the incorporation agreement is signed by all founders (ABĮ Article 7(4)). So if the other founders agree, the founder who drops out is removed from the agreement, and all of them sign the amendment. In our practice their shares are then allocated to the other founders, or the planned capital is reduced accordingly. If only one founder remains, a deed of incorporation (steigimo aktas) is made instead of an incorporation agreement (ABĮ Article 7(1)).

The incorporation is dropped altogether. The funds in the accumulative account can only be used after the company is registered (ABĮ Article 8(4)). The money is returned to the founders under the procedure for returning initial contributions set out in the incorporation agreement (ABĮ Article 7(2)). So read that clause before you sign, not when you need it. If you have already signed contracts in the name of the future company before registration, see our article on signing contracts for a UAB before registration.

Can a company that is already registered be “cancelled”?

No. From registration the company is a separate legal entity with limited civil liability (ABĮ Article 2(2)). The Law on Companies does not provide for the founders simply to cancel the incorporation of a company that is already registered. There are three routes.

1. Liquidation. The decision to liquidate is taken by the members by a qualified majority. It is set by the founding documents and cannot be less than 2/3 of the votes of all participants at the meeting (Article 2.107(1) of the Civil Code of the Republic of Lithuania (CK)). How this works is described in our article on starting a UAB liquidation. If you simply will not carry on any business, read do you have to liquidate a dormant company.
2. One founder leaves, the company stays. They sell their shares to the other shareholders or to a third party. How the other shareholders’ pre-emption right works we explain here, and when the agreement needs a notary here.
3. The court. Only a court can declare a legal entity unlawfully established, and only in the cases listed in the law (CK Article 2.114(1)). These include, for example, cases where the founding documents required by law were not drawn up or mandatory rules on establishment were breached, where the real purposes of establishment are unlawful, or where the minimum share capital was not formed in the manner and within the time limits set by law (CK Article 2.114(1), points 2–4). A founder changing their mind is not among these grounds. Where possible, the court must give a reasonable time to correct the errors (CK Article 2.114(3)). If the establishment is declared unlawful, the legal entity is liquidated (CK Article 2.114(2)). A claim may be brought by a member of the legal entity or the guardian of a member lacking capacity in this area, by its management bodies, and by a prosecutor defending the public interest (CK Article 2.114(5)).

How to start

Send us the list of founders, the shares you want in percentages, the planned capital, and when each founder will be able to pay their contribution. We will propose the number of shares and the nominal value and prepare the incorporation agreement and the articles of association.

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

More about this service: establishment of legal entities.