Liquidation of a Lithuanian Company
Whether it’s a market decline, severe competition, creditor pressure or unexpected circumstances, you may decide that the time has come to terminate your business. At this point, you can expect to receive qualified advice in all the stages of your company liquidation.
Liquidation of a company is the process of terminating a business, selling its assets, distributing its revenue among its creditors and/or shareholders and dissolving it from the state register. Ensuring a company is closed in compliance with the local law and with the aim to protect its key stakeholders requires qualified legal support.
A highly qualified and experienced Company in Lithuania UAB team will guide you through all the necessary legal procedures in a timely and efficient manner and fully remotely.
Our team will be pleased to consult you on a vast and detailed variety of legal challenges that you may encounter when trying to navigate through the local legislation. If needed, we will recommend the best option for sale/termination or transfer of your company, as well as prepare and submit all the required documentation.
A prerequisite for a voluntary liquidation is the absence of legal actions of bankruptcy process issued against the company.
Stages of Liquidation of a Company
- Voluntary liquidation of a company must be voted for by at least a 2/3 majority of all participants (shareholders) present at the meeting; they’ll also elect a liquidator or a group of liquidators who can be the company’s directors, employees or other natural persons. As soon as the decision to terminate the business has been approved, the company must cease trading immediately. Every consequent action must lead towards company liquidation.
- When it’s decided to liquidate a company, it’s mandatory to announce the planned procedure via public and private communication channels within the next two months. One way is to announce it 3 times every 30 days through the channel specified in the company’s articles of association. Another way is to announce it once in the specified channel and in writing to each creditor individually.
- The liquidator is responsible for submitting the following documents to the State Enterprise Centre of Registers on the day of the public announcement: 1) an application to deregister a company from the State Enterprise Centre of Registers, 2) a company liquidation deed, 3) a certificate issued by the county’s data archive confirming that the documents have been transferred for further storage or that there are no documents to be transferred for further storage, 4) if relevant, a certificate issued by the municipal administrations administering the state land rent, confirming that the legal entity has settled payments the municipalities in the territory of which the state land was leased.
- A liquidator must draw up a balance sheet reflecting the assets owned by the company in liquidation and present to the participants of the second general meeting. All approved assets will be sold by the liquidator to cover creditors’ claims. The remainder of the assets will be distributed among the shareholders.
- If the liquidation process takes longer than a few years, within 3 months of the end of each fiscal year, the liquidator also must generate annual accounts and liquidation reports.
- Lastly, if the company has paid all its debts and the State Tax Inspectorate has informed the State Enterprise Centre of Registers that the company has no debts, the liquidator can request to remove the company from the State Enterprise Centre of Registers.
Assistance in Liquidating a Company
Key factors of the voluntary liquidation of a Lithuanian company:
- The process takes from a few months to several years (the shortest period – up to 6 weeks)
- Our fees for a company liquidation services – 750 EUR
- Eliminating all debts prior to the start of a voluntary liquidation is a prerequisite
- A balance sheet must be drawn up at the beginning of a company liquidation process
Assistance in company liquidation include:
- Appointment of a local liquidator, which will ensure efficient administration.
- Preparation of required legal documentation which will ensure you comply with local law.
- Completing the application for a company liquidation to help you save time.
Transfer of a Lithuanian Company to a New Owner
An alternative way to replace a former management body is to transfer a company to a new owner-representative from the Company in Lithuania UAB team.