Most of the clients of Company in Lithuania UAB are located outside Lithuania, and representation under a power of attorney in Lithuanian public services is a daily practice of our company. If there is a power of attorney, the director of a Lithuanian company does not have to visit Lithuania, and it is possible to organize most business processes remotely. In this article, we wanted to highlight the question of how to issue a power of attorney in Lithuania, whether it is possible to do this remotely and what is important to know before the procedure of drawing up a power of attorney.
What is a power of attorney
According to Article 2.137(1) of the Civil Code of the Republic of Lithuania, a power of attorney is a written authorisation granted by one person (the principal) to another person (the representative) to act on the principal’s behalf in dealings with third parties. The Lithuanian Civil Code establishes the rules governing the issuance, form, validity, scope and termination of powers of attorney. It is the Lithuanian Civil Code that specifies the form and types of authorization, the duties and rights of the grantor and the trusted agent, and other provisions.
The document can be issued to perform one or many different actions.
How to issue a power of attorney in Lithuania
The power of attorney is drawn up by the grantor. For the conclusion of a contract (and its entry into force), the presence and written consent of the representative is not required – it is necessary to know his or her last name, first name, identification number and place of residence in order to enter these data into the power of attorney. Under Article 2.140 of the Lithuanian Civil Code, a power of attorney issued by a legal entity must generally be signed by its director (head of the legal entity). A management board member does not automatically have independent authority to issue a power of attorney merely by holding that position. Additional statutory requirements and the company’s applicable representation rules must also be taken into account.
When you need to contact a notary when drawing up a power of attorney
The list of actions for which a power of attorney from a notary in Lithuania is required (according to paragraph 1 of Article 2.138 of the Civil Code of the Republic of Lithuania):
- Powers of attorney granted by natural persons to perform transactions requiring mandatory notarial certification must generally be notarised in accordance with Article 2.138 of the Lithuanian Civil Code. Examples include certain transactions involving immovable property and qualifying share transfers. For the sale of shares in a Lithuanian UAB, notarial certification is generally required where 25% or more of the company’s shares are sold or the transaction price exceeds EUR 14,500, subject to statutory exceptions. Powers of attorney issued by legal entities are governed by Article 2.140 and other applicable provisions, and notarisation is not automatically required for every corporate power of attorney. A list of all transactions is given in Articles 1.74, 4.171, 5.70 and other articles of the Civil Code of the Republic of Lithuania.
- Transfer of the authority to the trusted agent to interact with legal entities on behalf of an individual-grantor. Note that there are exceptions. They are fixed in Article 2.139 of the Civil Code, as well as in 4 of Article 25 of the Law on Financial Instruments Markets of the Republic of Lithuania and in a number of other articles.
- Transfer of the authority to the representative of an individual for the disposal, use or management of real estate.
The authority granted to a representative may be evidenced by the original power of attorney, an appropriately certified copy or a verifiable electronic authorisation, depending on the applicable legal requirements and the procedure involved. Under Article 2.143 of the Lithuanian Civil Code, third parties may request presentation of the power of attorney and a copy. Where an authorisation is registered electronically, its existence and validity may be verified through the relevant register. It is incorrect to state that notarised copies have no legal force in all circumstances. According to the legislation of Lithuania, a copy of the power of attorney does not make it possible to establish the true conditions of the permit, specified in the original.
There is also the problem of a limited number of notaries in Lithuania. Today, the number of notaries is slightly more than 250 in the whole country. The reason: the model of the Latin notary, which Lithuania adopted in 1992 and which it still adheres to. It was possible to partially solve the above issues thanks to electronic self-service.
Simplified registration of a power of attorney online
At the moment, in Lithuania, some permits can be issued without visiting a notary, completely online. A special online platform of the Register Center has been developed for this purpose.
When is notarization of a power of attorney not required in Lithuania? In electronic form, you can create a permission to grant the following powers:
- Receive correspondence (parcels, money transfers)
- Collect wages and other charges related to employment
- Receive a pension (pensions), allowance, scholarship
- Use administrative and public services
On the website of the Registry Center, it is possible to register a permit for obtaining various verification letters and certificates (for example, a marriage certificate or birth certificate), licenses, driver’s licenses, car license plates, as well as for registration and de-registration of a car.
Special characteristics of online registration
Certain powers of attorney may be issued and registered electronically through the Lithuanian Centre of Registers’ self-service system without visiting a notary. Access requires an electronic identification and signing method accepted by the system. Eligibility depends on the applicant’s identity documents, electronic signature capabilities and the type of authorisation being granted. Foreign nationals may use the electronic service where they satisfy the applicable identification and technical requirements. Powers of attorney requiring mandatory notarial certification must follow the relevant notarial procedure. It
is not necessary to be within the country during the registration of a power of attorney: about 10% of powers of attorney are created outside Lithuania, according to the Registry Center. A power of attorney issued electronically through the Lithuanian Centre of Registers’ self-service system becomes effective in accordance with the applicable registration rules and any specified commencement conditions. Administrative fees depend on the current official tariffs of the Centre of Registers and should be verified before submission. Registration and termination procedures must comply with the applicable legal and technical requirements.
In addition to issuing a power of attorney, you can check on the Registry Center’s website whether a person has a permit and the content of such a document. Due to this, there is no need to have a paper copy of the power of attorney.
Validity and cancellation of a power of attorney
The correct execution of a power of attorney in Lithuania implies specifying the date of its compilation. Otherwise, the document is considered invalid according to clause 3 of Article 2.142 of the Civil Code Under Article 2.142 of the Lithuanian Civil Code, the validity period of a power of attorney may be specified or left undefined. If no validity period is indicated, the power of attorney is generally valid for one year from the date of its issuance. A notarised power of attorney intended for actions abroad that does not specify an expiry date remains valid until revoked by the principal. A power of attorney that does not indicate its date of issuance is invalid. Specific registration requirements may apply to electronically issued powers of attorney. For example, while a trusted representative holds his or her position in the company. It is also allowed not to specify the term of authority. In this case, the document is valid for 1 year from the date of its conclusion.
Revocation of authority
Under Article 2.146 of the Lithuanian Civil Code, the principal generally has the right to revoke a power of attorney, while the representative may renounce the authority granted. However, legislation or an agreement between the parties may provide for an irrevocable power of attorney in certain circumstances. The termination of a power of attorney is governed by Article 2.147, while the obligation to notify the representative and relevant third parties of revocation is established by Article 2.148. Where a power of attorney is registered, the relevant termination information must also be submitted to the Register of Powers of Attorney. In doing this, the reasons for the refusal may be covered up. But it is necessary to inform about the cancellation as soon as possible the trusted agent or the grantor and third parties, for the relationship with which the contract was created. The procedure for revoking a power of attorney depends on its form, method of issuance and applicable registration requirements. Under Article 2.146 of the Lithuanian Civil Code, where a power of attorney is registered in the Register of Powers of Attorney, its termination may be registered electronically in accordance with the relevant procedures. The principal must also notify the representative and relevant third parties in accordance with Article 2.148. For legal certainty and evidentiary purposes, written or electronically verifiable notification is recommended.
Other situations when the power of attorney becomes invalid:
- The validity period specified in the document has expired
- Under Article 2.147(1)(5) of the Lithuanian Civil Code, a power of attorney terminates when the legal entity to which the authority was granted ceases to exist or becomes subject to bankruptcy proceedings. A power of attorney also terminates when the legal entity that issued it ceases to exist, as provided by Article 2.147(1)(4). These statutory grounds for termination must be distinguished from the separate rules governing the representation of a company during restructuring or other insolvency-related procedures.
- The legal entity that issued the power of attorney no longer exists
- If the individual who issued or received the permit is recognized as a missing or incapacitated person, or his or her death is announced
When the power of attorney has expired or the document has been cancelled by one of the parties, its original (if it is not in electronic form) should be returned to the grantor.
If your company’s business activity involves you being located outside Lithuania, then the accountants and lawyers of Company in Lithuania UAB can represent your company in the state departments of Lithuania under a power of attorney and will help simplify the company registration procedure in Lithuania and accounting services in Lithuania.
