Akcinė Bendrovė (AB) is one of Lithuania’s most important corporate forms, especially for large-scale business ventures. Offering limited liability and the ability to raise capital publicly, ABs are a cornerstone of Lithuania’s corporate landscape. This guide explains everything you need to know about Akcinė Bendrovė—from types and legal requirements to the registration process and key differences with other company forms.
What Is Akcinė Bendrovė?
Akcinė Bendrovė, translated as joint-stock company, is a legal business entity governed by Lithuanian law. It enables businesses to divide ownership into shares held by shareholders. These companies can be public, allowing shares to be traded on the stock exchange, or private, limiting share transferability.
ABs provide limited liability, meaning shareholders are only responsible for the amount they invested. This structure attracts investors who want protection from business debts while participating in company growth.
Types of Akcinė Bendrovė
Lithuania recognizes two main types of joint-stock companies:
Public Akcinė Bendrovė (AB)
The public AB is designed for businesses that seek public investment. It requires a minimum share capital of €40,000, although recent regulations suggest this threshold may have decreased to €25,000.
A single shareholder can establish a public AB, but there is no upper limit on shareholders. During registration, the company must deposit at least 25% of its share capital.
Public ABs have a more complex governance system, requiring a Board of Directors with at least three members and a Supervisory Board of three to fifteen members, including an auditor. Registration with the Lithuanian Securities Commission is mandatory to ensure compliance with public trading regulations.
Private Akcinė Bendrovė (Uždaroji Akcinė Bendrovė or UAB)
Private ABs or UABs are more common for smaller businesses and foreign investors. The minimum share capital is significantly lower—between €1,000 and €2,500 depending on recent updates.
UAB shares are not freely transferable and typically require approval from other shareholders before being sold to third parties. UABs are easier to manage; one director can oversee daily operations, and only larger UABs meeting specific revenue, assets, or staff thresholds require auditors.
Both public and private ABs offer limited liability and are separate legal entities.
Key Legal Requirements and Governance
Capital Requirements
Public ABs demand a higher minimum share capital, making them suitable for larger ventures seeking investment through stock markets. Private UABs offer lower capital requirements, ideal for startups and SMEs. Both must deposit at least 25% of the share capital at registration.
Shareholder Rights
Shareholders in ABs enjoy several rights, including:
- Receiving dividends proportionate to their shares
- Voting on company matters according to share ownership
- Priority rights to purchase new shares in capital increases
- Access to company information and participation in annual general meetings
Companies may issue shares with or without voting rights, but non-voting shares cannot exceed 50% of the total. Recent changes allow ABs to create shares with different property and non-property rights, enhancing flexibility.
Governance Structure
Public ABs have more formal governance with a Board of Directors responsible for strategic decisions and a Supervisory Board overseeing management. UABs have simpler management, often run by a single director.
Annual financial statements must be submitted to the Register of Legal Entities. Public companies require annual audits, while private UABs only need audits under specific size conditions.
How to Form an Akcinė Bendrovė
Setting up an AB typically takes 2 to 3 weeks if all documents are prepared correctly. The steps include:
- Name Reservation: Check availability and reserve the company name at the State Enterprise Centre of Registers. The reservation holds for six months.
- Document Preparation: Key documents include:
- Articles of Association detailing company purpose, share capital, and governance
- Constituent Agreement or Act (depending on number of founders)
- Proof of legal address
- Information about founders and directors
- Share Capital Deposit: Open a bank account to deposit the minimum capital—€40,000 for public ABs or €2,500 (or €1,000) for private UABs. At least 25% must be paid upfront.
- Notarization: Official documents must be notarized according to Lithuanian law.
- Registration: Submit documents to the Register of Legal Entities, which processes them within three working days. Upon approval, the company gains legal status.
- Additional Registrations: Obtain a company seal, register with the State Tax Inspectorate for a tax identification number, and apply for VAT registration if applicable.
Foreign investors can use power of attorney to delegate registration steps but may need to visit Lithuania in person for bank account opening.
Benefits of Choosing Akcinė Bendrovė
ABs offer:
- Limited Liability: Shareholders are protected from personal financial risk beyond their investment.
- Access to Capital: Public ABs can raise funds through stock markets, attracting large investments.
- Credibility: AB status increases trust with partners, investors, and clients.
- Governance: Structured oversight enhances decision-making and transparency.
Choosing between public AB and private UAB depends on your capital, investor reach, and desired governance.
Conclusion
Akcinė Bendrovė remains a popular and robust business model in Lithuania, balancing investor protection with growth opportunities. Public ABs suit companies planning large-scale expansion and public investment, while private UABs fit small and medium enterprises seeking flexibility and lower costs.
Understanding the distinctions between these types, their capital needs, legal framework, and governance helps entrepreneurs choose the right path. With clear legal protections, shareholder rights, and a streamlined formation process, Akcinė Bendrovė continues to be a foundation for business success in Lithuania’s dynamic market.