Selling shares, registering a new shareholder, holding the annual general meeting or paying dividends each follow a procedure, deadlines and documents set by law. A shareholder of a private limited company (UAB) who wants to sell shares first notifies the company in writing (Article 47(1) of the Law on Companies of the Republic of Lithuania (AB\u012e)). After the transaction, the data on the new shareholder is filed within the statutory deadline with the Information System of Legal Entities' Participants (JADIS) (Article 41\u00b9(2) AB\u012e). On this page we briefly describe this work, answer questions on shares, meetings and dividends, and point to more detailed articles.<\/p>\r\n
The steps below describe a sale of UAB shares where the articles of association set no different procedure.<\/p>\r\n
Notarial form is mandatory when 25 percent or more of a UAB's shares are sold, or when the sale amount exceeds the threshold set in Article 1.74(1)(3) CK. The requirement does not apply where the shareholders' securities accounts have been handed over to a legal entity entitled to keep financial instrument accounts, or where the shares are sold in a privatisation of state or municipal shares (Article 1.74(1)(3) CK). In other cases the agreement is in simple written form (Article 47(10) AB\u012e). More in When a UAB share sale agreement must be notarised<\/a>.<\/p>\r\n Yes. The decision to issue convertible bonds is taken by the general meeting by a qualified majority of at least 2\/3 of the votes carried by the shares of all shareholders attending (Article 28(1)(9) AB\u012e); if the company has shares of different classes, the separate approval of the shareholders of each class is also needed, including holders of non-voting preference shares whose rights the issue affects (Article 56(2) AB\u012e). Such a decision is at the same time a decision to increase the share capital (Article 56(3) AB\u012e). A company whose share capital is not fully paid up may not issue convertible bonds (Article 56(5) AB\u012e).<\/p>\r\n Yes, unless the articles of association provide otherwise. The shareholder notifies the company in writing of the intention to sell (Article 47(1) AB\u012e); within 5 days the manager notifies the other shareholders, who are given no less than 10 and no more than 21 days to answer (Article 47(3) AB\u012e). If one or more shareholders have stated that they wish to buy all the shares, the shares must be sold to them, and they must pay within 2 months of the day the company received the notice (Article 47(5) AB\u012e). If no one wishes to buy all the shares, they may be sold at the seller's discretion, but for no less than the amount stated in the notice (Article 47(7) AB\u012e). This procedure does not apply when the company has two shareholders and one sells to the other (Article 47(8) AB\u012e), and the articles may provide that the pre-emption right does not apply (Article 47(9) AB\u012e). How to keep it short: Shares must first be offered to the other shareholders: how to keep it from taking a month<\/a>.<\/p>\r\n No. A share is indivisible, and if one share belongs to several owners they are treated as one shareholder (Article 40(5) AB\u012e). If the stake to be transferred does not match a whole number of shares, the general meeting may change the number of shares and their nominal value without changing the amount of share capital; this requires a qualified majority (Article 28(1)(4) AB\u012e).<\/p>\r\n Yes. The rule that a share must be paid for with no less than its nominal value applies when shares are issued (Article 45(2) AB\u012e), not when shares already issued are sold. But if the sale is really meant as a gift, the transaction is governed by the rules for the transaction the parties actually intended (Article 1.87(1) CK).<\/p>\r\n The person who acquired the shares notifies the company in writing within 5 business days of the acquisition and submits the document confirming the acquisition or an extract from it (Article 14(4) AB\u012e). A transfer of dematerialised shares is recorded by entries in the personal securities accounts of the transferor and the transferee (Article 46(2) AB\u012e), so the agreement is submitted to whoever keeps those accounts; it must state the company's name, legal form, code and registered office, the number of shares transferred by class and their nominal value, and the dividend, voting and other rights of preference shares (Article 46(3) AB\u012e). An agreement lacking any of these items is invalid from the moment it is made, and no entries may be made under it (Article 46(4) AB\u012e). The data on the new shareholder is then filed with JADIS within 5 days of receiving the documents (Article 41\u00b9(2) AB\u012e), and the company's manager is responsible for this (Article 41\u00b9(3) AB\u012e).<\/p>\r\n When the company has a single shareholder, that shareholder's data and the dates of acquiring and transferring shares are recorded in the data of the Register of Legal Entities (Article 12(1)(4) AB\u012e), so they appear in the company's register extract; when there are more shareholders, their data is held in JADIS (Article 41\u00b9(1) AB\u012e). Shareholders may obtain data about themselves and the company's list of participants (point 33.2 of the JADIS Regulations), and the company obtains all data on its participants (point 33.4 of the JADIS Regulations). Other persons may obtain only an extract of identification data (point 33.6 of the JADIS Regulations). It shows the natural person's name and surname or the legal entity's code and name, and the date the person became a shareholder (point 39.5.1 of the JADIS Regulations).<\/p>\r\n No. JADIS receives data on the shareholder, the number of shares, and the acquisition and transfer of shares with their dates (Article 41\u00b9(1) AB\u012e), not the agreement itself. The agreement is submitted to whoever keeps the shareholders' securities accounts (Article 46(3) AB\u012e), so a copy has to be requested from the parties to the transaction or from the account keeper.<\/p>\r\n Dematerialised shares are recorded by entries in the shareholders' personal securities accounts (Article 41(1) AB\u012e); UAB shares may be dematerialised or certificated (Article 40(8) AB\u012e). The accounts of the owners of a UAB's dematerialised shares are kept by the company itself, but it may hand this over by agreement to a legal entity entitled to keep financial instrument accounts (Article 41(3) AB\u012e). At a shareholder's request, the account keeper issues a statement showing the number of shares (Article 41(4) AB\u012e).<\/p>\r\n In dealings with other persons the manager acts alone on behalf of the company (Article 19(6) AB\u012e), so where the company keeps the shareholders' accounts itself (Article 41(3) AB\u012e), the manager makes the transfer entries and issues account statements on the company's behalf, even when the shares being sold are not the manager's. The manager also notifies the other shareholders of the intended sale (Article 47(3) AB\u012e) and is responsible for filing the data with JADIS (Article 41\u00b9(3) AB\u012e).<\/p>\r\n Property is presumed to be joint property of the spouses until it is proved to be the personal property of one spouse (Article 3.88(2) CK). Securities that are joint property of spouses may be transferred only by both spouses, unless one holds a power of attorney from the other (Article 3.92(4) CK), so before the transaction it must be established who owns the shares and, where needed, the spouse's signature or power of attorney obtained. The Supreme Court of Lithuania (Lietuvos Auk\u0161\u010diausiasis Teismas<\/em>) has held that a transaction made without the other spouse's consent is voidable rather than void, and that the duty to tell the buyer that the shares are joint property of the spouses lies with the seller, even if the buyer does not ask (ruling of 13 October 2021 in civil case No e3K-3-250-943\/2021, paragraphs 28 and 33). Such a transaction can be declared invalid whether or not the buyer acted in good faith, unless the spouses used deceit or gave false data to the authorities (Article 3.96(2) CK), so the buyer too must find out, before the transaction, in what form of ownership the shares belong to the seller (same ruling, paragraph 29).<\/p>\r\n Yes. Personal property includes, for example, property given to or inherited by a spouse after the marriage, unless the deed of gift or the will says otherwise, and property acquired with personal funds where the intention to acquire it as personal property was clearly expressed at the time (Article 3.89(1) CK); this is proved by written evidence (Article 3.89(2) CK). Spouses may also provide in a marriage contract that property acquired both before and during the marriage is the personal property of each, for all property or only specific items (Article 3.104(1)(1) and (2) CK); a marriage contract is made in notarial form and registered in the register of marriage contracts (Article 3.103(1) and (2) CK).<\/p>\r\n The ordinary general meeting must be held no later than 5 months after the end of the financial year (Article 24(1) AB\u012e); this deadline applies to companies whose financial year ended on 1 July 2026 or later (Article 38(3) of amending law No XV-386). For companies whose financial year ended before 1 July 2026, the term in Article 24(1) AB\u012e as worded until 30 June 2026 applies: no later than 4 months after the end of the financial year. The meeting approves the annual financial statements (Article 58(2) AB\u012e), which, together with the management report and the auditor's report where an audit is mandatory, are filed with the Register of Legal Entities within 5 months of the end of the financial year (Article 58(3) AB\u012e). The general rule requires the statements to be filed within thirty days of their approval unless a law sets another time limit (Article 2.66(4) CK); Article 58(3) AB\u012e is such another time limit, so a company files within 5 months of the end of the financial year. Declared dividends are paid no later than one month after the decision to allocate profit (Article 60(5) AB\u012e).<\/p>\r\n Dividends go to the persons who were shareholders at the end of the day on which the company body declaring the dividends took its decision, or who had a right to dividends on another lawful basis (Article 60(7) AB\u012e). A transfer of dematerialised shares is recorded by entries in the transferor's and transferee's securities accounts (Article 46(2) AB\u012e). So if the transfer was entered before the end of the decision day, the new shareholder receives the dividend even though the profit was earned earlier. If the agreement was signed but the entry not yet made, the company pays the dividend to the seller; the buyer and seller may settle this between themselves in their agreement, as long as this does not contradict the law (Article 6.156(1) CK).<\/p>\r\n No. A dividend is the share of profit allocated to a shareholder in proportion to the nominal value of the shares owned (Article 60(1) AB\u012e), and all shares of the same class must carry the same rights (Article 40(4) AB\u012e). Different rights can be created only through different share classes: the dividend on preference shares, or how it is calculated, is set in the articles of association (Article 42(7) AB\u012e).<\/p>\r\n Such dividends are declared by the general meeting or, if the articles allow, up to the amount set there, by the board or the manager (Article 60\u00b9(1) and (2) AB\u012e); interim financial statements must be prepared for this (Article 60\u00b9(3) AB\u012e). The decision is taken within 3 months of the end of the period, but not before the previous year's statements are approved and the profit allocated, and no later than the end of the financial year (Article 60\u00b9(4) AB\u012e); the amount may not exceed the profit of that period plus retained earnings carried into the current year, less the part to be allocated to reserves, and the company must have no overdue obligations and, after paying the dividends, must be able to meet its obligations for the current financial year (Article 60\u00b9(5) AB\u012e). Such dividends may next be declared no earlier than 3 months later (Article 60\u00b9(6) AB\u012e), and the interim financial statements are filed with the register within 30 days of the decision (Article 58(5) AB\u012e).<\/p>\r\n Yes. The income tax base of a non-resident of Lithuania includes income from distributed profits whose source is in Lithuania (Article 5(4)(2) of the Law on Personal Income Tax (GPM\u012e)), and income from distributed profits is taxed at a 15 percent rate (Article 6(6)(1) GPM\u012e). Such income received from a Lithuanian entity is class A income (Article 22(2)(1) GPM\u012e), so the company paying the dividends calculates, withholds and pays the tax (Article 23(1) GPM\u012e). Whether the tax is reduced under a double taxation treaty, and whether the dividends are also taxed in the country of residence, has to be checked against that treaty and that country's law.<\/p>\r\n When the receiving company has held at least 10 percent of the voting shares for no less than 12 months without interruption, including the moment of distribution; the dividends are then not subject to corporate income tax and are not included in the receiving company's income (Article 33(2) of the Law on Corporate Income Tax (PM\u012e)). Otherwise a 17 percent corporate income tax rate applies, and the company paying the dividends calculates, withholds and pays the tax (Article 33(1) PM\u012e). Where the dividends are paid in cash, the tax withheld is credited against the receiving company's corporate income tax, and any excess is refunded or offset (Article 33(3) PM\u012e).<\/p>\r\n Yes, but only micro companies, other than financial holding companies: they may omit the explanatory notes, and their set of financial statements then consists of an abridged balance sheet and an abridged or full profit (loss) statement (Article 8(2) of the Law on Reporting by Undertakings and Groups of Undertakings (IIGA\u012e)). In that case it must give the information listed in the law below the balance sheet, where it has any, such as off-balance-sheet commitments and guarantees and loans to the manager (Article 9(2) IIGA\u012e). A small company's set consists of a balance sheet or condensed balance sheet, a profit (loss) statement and explanatory notes (Article 8(1) IIGA\u012e). A micro company is one where at least 2 of the indicators named in the law (balance sheet assets, net sales revenue, average number of employees) do not exceed the limits set in Article 4(1) IIGA\u012e on the last day of the financial year.<\/p>\r\n Yes. The annual financial statements must be filed with the register within 5 months of the end of the financial year (Article 58(3) AB\u012e), and the law makes no exception for a company that is not trading. If the statements are not filed within twelve months after the filing deadline, the register keeper may initiate the company's liquidation (Article 2.70(1)(1) CK); more on this: Liquidation initiated by the Centre of Registers<\/a>. A temporary exemption from filing tax returns (Article 77(1) of the Law on Tax Administration (MA\u012e)) is a tax matter and does not remove this duty.<\/p>\r\n Taxpayers who are temporarily not trading may be temporarily exempted from filing tax returns and other documents, and the procedure, periods and cases of such exemption are set by the central tax administrator (Article 77(1) MA\u012e). If a tax liability arises during that period, the tax must still be paid within the deadline set by the tax law (Article 77(2) MA\u012e).<\/p>\r\n Failure to file the financial statements, management report or auditor's report with the keeper of the Register of Legal Entities on time is an administrative offence: Article 223(2) of the Code of Administrative Offences (ANK) sets a fine for the managers of legal entities or other persons named in the law or in the founding documents.<\/p>\r\n It is not filed with the register. Point 127 of the Regulations of the Register of Legal Entities (JAR Regulations) lists the documents filed together with the annual financial statements (the management report, the auditor's report and others), and the shareholders' decision is not among them, so the signed decision remains a company document kept by the company.<\/p>\r\n Under the law, decisions on larger transactions investing, transferring, leasing, pledging or acquiring long-term assets and on guarantees or sureties are taken by the board (Article 34(4) AB\u012e), or by the manager where there is no board (Article 37(10) AB\u012e); the general meeting's approval is needed only where the articles of association require it (Article 34(5) AB\u012e). The exception is financial assistance for the acquisition of the company's own shares: the company may enter into such a transaction only on a decision of the general meeting (Article 45\u00b2(2) AB\u012e). The duty of loyalty and the duty to avoid conflicts of interest under the Civil Code apply to members of the management body (Article 2.87(2) and (3) CK), not to a shareholder as such, so a shareholder's competing activity is restricted first of all by an agreement the shareholder has signed (Article 6.156(1) CK). However, where a shareholder's actions run counter to the company's objectives and there is no reasonable ground to expect them to change, the other shareholders named in the law may ask the court to order that shareholder's shares to be sold to them (Article 2.115(1) CK); whether competing activity alone is enough is decided by the court on the facts of the case.<\/p>\r\n Send us the company's name or code and its articles of association, and tell us briefly what you want to do: sell or buy shares, register a new shareholder, hold a meeting or declare dividends. If a foreign person is involved, tell us which country.<\/p>\r\n Phone +370 5 212 1506, email info@linden.lt<\/p>\r\nCan a UAB issue convertible bonds, and how many votes does it take?<\/h3>\r\n
Must UAB shares be offered to the other shareholders before they are sold to a third party?<\/h3>\r\n
Can part of a single share be transferred?<\/h3>\r\n
Can UAB shares be sold for less than their nominal value?<\/h3>\r\n
What has to be done after the share sale agreement is signed?<\/h3>\r\n
Where can information about a UAB's shareholders be seen?<\/h3>\r\n
Can a copy of the share sale agreement be obtained from the Centre of Registers?<\/h3>\r\n
What are dematerialised UAB shares, and who keeps the records?<\/h3>\r\n
What role does the company's manager play in a sale of UAB shares?<\/h3>\r\n
Why does the marital status of the buyer or seller matter in a share transaction?<\/h3>\r\n
Can shares acquired during marriage belong to one spouse only?<\/h3>\r\n
By when must the annual general meeting be held, and when are the financial statements filed with the register?<\/h3>\r\n
Who is entitled to dividends if the shares were sold recently?<\/h3>\r\n
Can one shareholder be given smaller dividends than the others?<\/h3>\r\n
When can dividends be declared for a period shorter than the financial year?<\/h3>\r\n
Are dividends from a Lithuanian company taxed if the shareholder lives abroad?<\/h3>\r\n
When does one Lithuanian company receive dividends from another without corporate income tax?<\/h3>\r\n
Can a small company's financial statements be prepared without explanatory notes?<\/h3>\r\n
If the company's activities are suspended, must financial statements still be filed?<\/h3>\r\n
Can a company temporarily suspend its activities and stop filing returns?<\/h3>\r\n
What happens if the annual financial statements are filed with the register late?<\/h3>\r\n
Is the shareholders' decision approving the financial statements filed anywhere?<\/h3>\r\n
Which transactions need shareholder approval, and are shareholders bound by non-compete duties?<\/h3>\r\n
More on shareholders and shares<\/h2>\r\n
How to start<\/h2>\r\n