{"id":2365,"date":"2026-10-04T09:21:27","date_gmt":"2026-10-04T06:21:27","guid":{"rendered":"https:\/\/linden.lt\/tinklarastis\/setting-up-a-public-institution-vsi-lithuania\/"},"modified":"2026-10-06T07:32:46","modified_gmt":"2026-10-06T04:32:46","slug":"setting-up-a-public-institution-vsi-lithuania","status":"publish","type":"irasas","link":"https:\/\/linden.lt\/en\/blog\/setting-up-a-public-institution-vsi-lithuania\/","title":{"rendered":"Setting up a public institution (V\u0161\u012e): members, articles, registration"},"template":"","kategorija":[],"class_list":["post-2365","irasas","type-irasas","status-publish","hentry"],"acf":{"visi_puslapiai_cta_statusas":false,"visi_puslapiai_cta_antraste":"","visi_puslapiai_cta_formos_id":"","visi_puslapiai_cta_papildomas_tekstas":"","visi_puslapiai_cta_nuotrauka":null,"tinklarastis_1_autorius":null,"tinklarastis_1_iraso_tipas":false,"dinamiski_blokai":[{"acf_fc_layout":"tekstas","tekstas":"

A public institution (vie\u0161oji \u012fstaiga<\/em>, V\u0161\u012e) 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<\/em>) once they transfer their contribution. A V\u0161\u012e 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 (Registr\u0173 centras<\/em>) without a notary.<\/p>\r\n

What a public institution is and how it differs from an association<\/h2>\r\n

Article 2 of the Law on Public Institutions of the Republic of Lithuania (V\u0161\u012e\u012e) 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.<\/p>\r\n

A V\u0161\u012e may not carry on activities that do not match its aims (V\u0161\u012e\u012e 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.<\/p>\r\n

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 (A\u012e)). An association needs at least three founders (A\u012e Article 4(1)), while a V\u0161\u012e can be set up by one person.<\/p>\r\n

Who can be a founder and a member<\/h2>\r\n

There is no limit on the number of founders of a V\u0161\u012e (V\u0161\u012e\u012e Article 6(1)). Founders can be both natural and legal persons (CK Article 2.60(2)).<\/p>\r\n

Founders who have transferred a contribution to the V\u0161\u012e under the law and the articles become its members (V\u0161\u012e\u012e Article 4(1)). Where there is a single member, that member is called the owner of the V\u0161\u012e (V\u0161\u012e\u012e Article 4(2)). A member has the right to vote at the general meeting of members, to see the V\u0161\u012e's documents and to challenge decisions of its bodies in court (V\u0161\u012e\u012e Article 4(3)).<\/p>\r\n

Member's rights are transferred under the procedure in the articles (V\u0161\u012e\u012e Article 4(4)). A person who acquires member's rights must notify the V\u0161\u012e in writing within 5 days (V\u0161\u012e\u012e Article 4(5)). New members are admitted by the general meeting of members (V\u0161\u012e\u012e Article 12(1)(14)). The articles must set out how a person becomes a member and how member's rights are transferred (V\u0161\u012e\u012e 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 V\u0161\u012e 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.<\/p>\r\n

Contributions, and whether profit can be distributed<\/h2>\r\n

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 (V\u0161\u012e\u012e Article 24(3)). The Law on Public Institutions sets no minimum contribution. The members' capital equals the value of the members' contributions (V\u0161\u012e\u012e Article 24(2)).<\/p>\r\n

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 (V\u0161\u012e\u012e Article 12(6)).<\/p>\r\n

The law provides no mechanism for distributing profit to members. A V\u0161\u012e may not use its surplus (profit) for aims other than those set in its articles (V\u0161\u012e\u012e 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 (V\u0161\u012e\u012e Article 3(2)(3) and (4)). When a V\u0161\u012e is liquidated, the members get back assets worth no more than the members' capital (V\u0161\u012e\u012e Article 27(8)). How that works is covered in Liquidating a public institution (V\u0161\u012e): who decides, liquidator, assets<\/a>.<\/p>\r\n

Founding agreement, articles and the founding meeting<\/h2>\r\n

The legal basis for setting up a V\u0161\u012e is the founding transaction: a founding agreement or, where there is a single founder, a founding act (V\u0161\u012e\u012e Article 6(2) and (3)). The founding agreement states the founders, the name and registered office of the V\u0161\u012e, its legal form, its aims, the founders' obligations and the deadlines for meeting them, and the other details listed in V\u0161\u012e\u012e Article 7(1). Model forms of the founding act and founding agreement are approved by an institution authorised by the Government (V\u0161\u012e\u012e Article 7(5)).<\/p>\r\n

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 V\u0161\u012e\u012e Article 8(2). The articles are signed by all the founders or their authorised representatives (V\u0161\u012e\u012e Article 6(6)). A notary does not witness the signatures of the natural persons who sign the articles (V\u0161\u012e\u012e Article 8(8)).<\/p>\r\n

A founding meeting is held before registration. It elects the person who will act as the head of the V\u0161\u012e in the interim (V\u0161\u012e\u012e 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 (V\u0161\u012e\u012e Article 6(9)).<\/p>\r\n

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<\/a>.<\/p>\r\n

The name<\/h2>\r\n

The name of a V\u0161\u012e 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 \"vie\u0161oji \u012fstaiga\" in the name; the legal form is stated in the founding agreement (V\u0161\u012e\u012e 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<\/a>.<\/p>\r\n

The name of a V\u0161\u012e 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.<\/p>\r\n

Governance: the meeting, the head and collegial bodies<\/h2>\r\n

A V\u0161\u012e must have a general meeting of members and a single-person management body (the head, vadovas<\/em>). It may also have a collegial management body alongside the head (V\u0161\u012e\u012e Article 11(1) and (2)). Where a board is not mandatory, the decision to form one is taken by the general meeting of members (V\u0161\u012e\u012e Article 13(3)).<\/p>\r\n

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 V\u0161\u012e\u012e 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 (V\u0161\u012e\u012e Article 12(5)). The written decisions of the owner of a V\u0161\u012e count as decisions of the general meeting of members (V\u0161\u012e\u012e Article 12(12)).<\/p>\r\n

The head runs the V\u0161\u012e and acts in its name. In a V\u0161\u012e being set up, the head takes office on the day the institution is registered (V\u0161\u012e\u012e Article 20(1)). A V\u0161\u012e 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 (V\u0161\u012e\u012e 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 (V\u0161\u012e\u012e Article 9(4)).<\/p>\r\n

Registration: through a notary or online<\/h2>\r\n

To register a V\u0161\u012e, the founding agreement, the articles and the other documents listed in CK Article 2.64(2) are filed with the register (V\u0161\u012e\u012e 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)).<\/p>\r\n

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).<\/p>\r\n

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:<\/p>\r\n