Winding up of a Lithuanian Company
If any unforeseen circumstances prevent making business as usual, and it becomes clear that a company is no longer profitable, it is advisable to dissolve the company. The Company in Lithuania UAB team assists with the voluntary liquidation of Lithuanian companies, including preparation of corporate resolutions, registration of liquidation status, creditor notifications, accounting and tax compliance, archival formalities and final deregistration. Assistance with bankruptcy or other insolvency proceedings is subject to a separate assessment of the company’s financial situation and the applicable legal requirements.
Company liquidation is a legal procedure through which a company’s affairs are wound up, its assets and liabilities are settled, and the company is ultimately removed from the Lithuanian Register of Legal Entities (Juridinių asmenų registras, JAR). During liquidation, the company retains its legal personality until deregistration but may conduct only activities permitted under the applicable liquidation rules. Specialists of Company in Lithuania UAB will help you to complete the company dissolution procedure in the shortest time in full compliance with the law and completely remotely.
Lithuanian law does not generally require a solvent company to engage an external legal adviser to complete voluntary liquidation. However, professional legal and accounting assistance can help ensure that shareholder resolutions, creditor notifications, tax obligations, financial statements and deregistration documents are prepared and submitted correctly. Therefore, we will be happy to advise you on any questions you may have and to prepare and submit all necessary documents to get rid of the company you do not need as soon as possible.
When it comes to dissolving a Lithuanian company, several options are available, including bankruptcy. Here, we provide an overview of the winding-up process and the option of bankruptcy, and how our services can assist you in these challenging situations.
Winding Up a Lithuanian Company
Winding up a company in Lithuania involves several steps, and the process may vary depending on the company’s financial status, its assets, and liabilities. Some common reasons for winding up a company in Lithuania include business cessation, financial insolvency, or voluntary dissolution.
Voluntary Dissolution
Voluntary dissolution is an option chosen by companies that are solvent, meaning they can meet their financial obligations, including repayment of debts. In this case, the company’s shareholders or owners can decide to terminate the business, liquidate its assets, and distribute the proceeds to stakeholders according to their ownership rights.
Bankruptcy
Under the Lithuanian Law on Insolvency of Legal Entities, a company may be considered insolvent if it is unable to fulfil its financial obligations on time or if its liabilities exceed the value of its assets. These are alternative insolvency criteria, not cumulative requirements. Where the statutory conditions are met, the company’s management must assess its obligations to initiate the appropriate insolvency proceedings. Bankruptcy is not merely an optional alternative to voluntary liquidation in every case. In this situation, the company may initiate bankruptcy proceedings to address the financial difficulties, protect the rights of creditors, and liquidate its assets in an organized manner. The bankruptcy process is closely regulated by Lithuanian law.
Stages of company dissolution
- Preparation of the resolution on dissolution of the company
- Appointment of a liquidator for voluntary company liquidation. Where bankruptcy proceedings are required, the appointment and responsibilities of an insolvency administrator are governed separately by the Lithuanian Law on Insolvency of Legal Entities. A liquidator and an insolvency administrator perform different legal functions and should not be treated as interchangeable.
- Asset Inventory and Valuation/Asset liquidation
- Tax and Regulatory Compliance
- Communication with government authorities
- Filling out the necessary forms to the registration centre
- Publication of the company’s liquidation notice in accordance with the Lithuanian Law on Companies. For voluntary liquidation of a UAB, the notice must generally be published three times at intervals of at least 30 days in the source specified in the company’s articles of association, or published once in that source with individual written notification to all creditors. The liquidation decision and the liquidator’s details must also be submitted to the Register of Legal Entities within the applicable statutory deadline.
- Preparation and making the final balance sheet
- Selection and transfer of company records requiring preservation to the competent archive or other authorised custodian, in accordance with Lithuanian document management and retention requirements. Not every company document must be physically transferred to a state archive. The liquidator must obtain the required confirmation concerning the transfer or absence of records subject to archival requirements before final deregistration.
- Payment of the state fee
- Deregistration of the entity
Assistance in company dissolution
To start dissolution of a company, you need to fill in a feedback form and specify details of the company to be dissolved. A final accounting report is needed for dissolution of your company. You can provide it to specialists of Company in Lithuania UAB if it is already prepared in advance. If not, we can help you prepare the necessary reports.
Basic conditions for dissolution of a Lithuanian company:
