You can, but only in a particular way, and with a risk for whoever signs. The company comes into existence only when it is registered. Until then, a founder or another person may sign a contract in its name, stating clearly that they act in the name and in the interests of the company being formed. Once registered, the company approves the contract, and it then becomes the company's contract. If the company does not approve it, all obligations stay with the person who signed. The other two options are to wait for registration, or to sign in your own name and later, with the other party's consent, pass the contract to the company.<\/p>\r\n
How long setting up a UAB takes, which documents are needed and how the accumulation account (kaupiamoji s\u0105skaita<\/em>) is opened during formation are covered in our articles \"How long it takes to set up a UAB\"<\/a> and \"Setting up a UAB step by step\"<\/a>. This article is about who the contracting party is while the company is not yet registered.<\/p>\r\n A legal entity is deemed established from its registration in the Register of Legal Entities (Juridini\u0173 asmen\u0173 registras<\/em>) (Article 2.63(1) of the Civil Code of the Republic of Lithuania (CK)). Until that day the company is not a separate person, so it cannot take on obligations in its own name. Signed founding documents, a reserved name or paid-in contributions do not change this.<\/p>\r\n From registration, the company is a separate person. It is liable for its own obligations, and the shareholder is not liable for the company's obligations, except where the law or the founding documents provide otherwise (CK Article 2.50(2)). Transactions in the company's name are concluded by its head acting alone (Article 19(6) of the Law on Companies of the Republic of Lithuania (AB\u012e)), unless the articles provide for joint representation (AB\u012e Article 37(10)).<\/p>\r\n The law answers this in two places.<\/p>\r\n First, the general rule. Under a transaction concluded in the name of an unregistered legal entity, the rights and obligations arise for the person who concluded it (CK Article 1.83(1)). If the registered legal entity does not take on the obligations, the persons who concluded the transactions are jointly and severally liable (CK Article 1.83(2)).<\/p>\r\n Second, the special rule for formation. A body of the legal entity may approve transactions that other persons concluded in its name and in its interests before it was established (CK Article 2.61(1)). When the transaction is concluded, it must state that it is made in the name and in the interests of the legal entity being formed. If that statement is missing, the transaction can still be approved, but the signatory and the approving legal entity are then jointly and severally liable (CK Article 2.61(1)).<\/p>\r\n If the body of the company, once established, does not approve the transaction, all obligations under it fall on the person who concluded it. If several persons signed, they are jointly and severally liable (CK Article 2.61(2)).<\/p>\r\n In practice this means: until the company has approved the contract, the person who signed is liable for it. If a founder that is a legal entity signed, that founder is liable. If an individual signed, that individual is personally liable.<\/p>\r\n A typical situation: the company is still being formed, and the other party wants to sign the contract now and does not want to wait. What can be done?<\/p>\r\n 1. Sign in the name of the company being formed and approve it after registration.<\/strong> The founder, represented by its own director, signs the contract, stating that it acts in the name and in the interests of the UAB being formed. Once the company is registered, its body approves the contract, and it is treated as the company's contract (CK Article 2.61(1)).<\/p>\r\n To make this work smoothly, take care of three things:<\/p>\r\n This option needs the other party's agreement. Not every landlord or supplier is willing to sign with a company that is not yet in the register.<\/p>\r\n This route does not work for employment contracts: a legal entity's capacity as an employer arises from the moment it is established (Article 21(3) of the Labour Code of the Republic of Lithuania (DK)), and a company is established on registration (CK Article 2.63(1)). Sign employment contracts after registration, with a start date no earlier than that.<\/p>\r\n 2. Wait until the company is registered.<\/strong> This is the simplest route if the other party can wait a few days. The head of the company then signs the contract in the company's name, and the question does not arise.<\/p>\r\n 3. Sign in your own name and change the party later.<\/strong> The founder signs the contract in its own name, and after registration the contract is transferred to the company. Note that you can pass your obligations (a debt) to another person only if the creditor agrees, which here means the other party to the contract (CK Article 6.116(1)). A debt transfer agreement must be in writing (CK Article 6.118). In practice, a three-party agreement is signed: the founder, the company and the other party. Until then, the founder is liable under the contract.<\/p>\r\n Which option to choose is usually decided by the other party. If it agrees to sign with the company being formed, the first option is the fastest. If not, the second or third remains.<\/p>\r\n Sometimes clients buy a company that has already been established and ask whether they can make purchases in its name before the head has been changed. The formation problem described above does not arise here: the company is already registered and concludes transactions through its head (AB\u012e Article 19(6)). The new head takes up the post from the day of election, unless the contract with them states otherwise (AB\u012e Article 37(3)).<\/p>\r\n However, the person authorised by the body that elected the head must notify the registrar of legal entities of the new head no later than within 5 days (AB\u012e Article 37(6); from 1 November 2026, the manager of the Register of Legal Entities data). Changes in the members of management bodies take effect from their registration, except where laws provide otherwise (CK Article 2.66(6)). So while the register still shows the old head, banks and partners usually go by the register.<\/p>\r\n The practical obstacle is usually the bank. If the company has an account, the new head usually has to go to the bank and change the signing rights, or close the account and open a new one. Until that is done, and while the register and the bank still show the old head, paying in the company's name can be difficult.<\/p>\r\n Tell us what company you are setting up, who the founder will be and which contracts must be signed before registration. We will write the procedure into the founding documents and prepare the contract wording and the approval document.<\/p>\r\n Phone +370 5 212 1506, email info@linden.lt<\/p>\r\nWhen the company can conclude contracts<\/h2>\r\n
Who is liable under a contract signed before registration<\/h2>\r\n
Three options when the contract is needed now<\/h2>\r\n
If you are buying a company that is already registered<\/h2>\r\n
How to start<\/h2>\r\n