Akcine Bendrove (AB) is a cornerstone of Lithuania’s corporate landscape, designed for serious business ventures with substantial capital and ambitions. If you are planning to establish a significant business presence in Lithuania or explore investment opportunities, understanding this joint-stock company structure is essential. Governed by the Lithuanian Civil Code and Law on Companies, the AB offers a transparent and regulated framework for ownership, governance, and taxation.
This article provides a detailed overview of Akcine Bendrove, compares its types, outlines legal requirements, and guides you through the formation process, helping you decide if an AB suits your business goals.
What Is Akcine Bendrove?
Akcine Bendrove refers to a joint-stock company in Lithuania characterized by shareholding that grants proportional ownership. Unlike smaller private companies, an AB can be publicly listed, allowing shares to be traded on the stock exchange and enabling public investment. This makes it a preferred structure for companies seeking broader capital and investor participation.
The minimum share capital for a public AB is typically €40,000, although recent updates suggest this requirement may have been lowered to €25,000. The AB is managed by a Board of Directors responsible for strategic decisions and a CEO who oversees daily operations. Corporate income is taxed at a flat 15% rate.
Types of Akcinė Bendrovė
Lithuania offers two forms of joint-stock companies, catering to different business needs:
Public Akcinė Bendrovė (AB)
This structure resembles publicly traded companies globally. Shares are freely transferable and can be bought by anyone, making it ideal for large enterprises seeking diverse investors.
- Minimum capital: €40,000 (possibly €25,000 as of 2023)
- Shareholder limit: Unlimited
- Capital payment: At least 25% paid during registration
- Governance: Requires a Board of Directors (minimum 3 members) and a Supervisory Board (3-15 members), including an auditor
- Registration: Must be approved by the Lithuanian Securities Commission
Private Akcinė Bendrovė (UAB)
More common among small and medium businesses, the UAB requires less capital and offers simpler governance.
- Minimum capital: €2,500 (recently reduced to €1,000)
- Shareholder limit: Between 100 and 250, depending on sources
- Share transfer: Requires approval from other shareholders, restricting free sale
- Governance: Can be managed by a single director, who may also be the sole shareholder
- Auditor: Required only if revenue exceeds €1.4 million, assets surpass €720,000, or employees are over 50
Both AB and UAB offer limited liability, protecting personal assets of shareholders from company debts.
Legal Features and Requirements
Understanding the legal framework is crucial for compliance and efficient operation:
- Capital Contributions: AB requires a higher minimum share capital than UAB. Both types mandate at least 25% capital deposit at registration.
- Shareholder Rights: Shareholders can receive dividends, participate in capital increases, and attend meetings with voting rights proportional to their shares.
- Share Classes: Companies may issue different classes of shares with varying voting rights, but non-voting shares cannot exceed 50% of the total.
- Financial Reporting: All companies must submit annual financial statements to the Register of Legal Entities. ABs require annual audits, while UABs are audited based on size thresholds.
- General Meeting: A mandatory yearly shareholders’ meeting must be held within four months after the fiscal year ends.
These rules ensure transparency, accountability, and fair governance for all shareholders.
How to Form an Akcinė Bendrovė
Forming an AB or UAB typically takes 2-3 weeks with proper preparation. The steps include:
- Name Reservation: Reserve a unique company name at the State Enterprise Center of Registers, valid for six months.
- Document Preparation: Prepare Articles of Association, Constituent Agreement (for multiple founders) or Constituent Act (for a single founder), proof of legal address, and founder/director identification.
- Capital Deposit: Open a bank account and deposit the required capital (minimum €40,000 for AB, €2,500 or €1,000 for UAB, depending on regulations). At least 25% must be paid upfront.
- Notarization: Have all documents notarized to confirm legal compliance.
- Registration: Submit documents to the Register of Legal Entities, which processes them within three working days. Upon approval, the company is officially registered.
- Tax Registration: Register with the State Tax Inspectorate within five days to obtain tax ID and VAT registration if needed.
- Additional Steps: Obtain an official company seal for business transactions.
Foreign investors can appoint representatives via power of attorney to handle registrations, but opening a bank account may require personal appearance.
Why Choose Akcine Bendrove?
Akcine Bendrove suits ventures with substantial capital and ambitions for growth, especially those planning to attract public investment. Its governance structure balances shareholder control with professional management, while limited liability minimizes personal risk.
Compared to UAB, AB offers greater flexibility for share transfer and public trading, making it attractive for large companies and those seeking stock market access. However, it comes with stricter reporting and governance obligations.
Conclusion
Akcine Bendrove remains a resilient and attractive business entity in Lithuania for entrepreneurs aiming to expand or invite public investments. Whether you select a public AB or a private UAB depends on your capital, investor base, and desired governance style.
With robust shareholder protections, transparent financial requirements, and clear legal frameworks, ABs provide a reliable structure for scaling businesses. The registration process is straightforward but requires precise compliance with Lithuanian regulations.
Choosing the right form of joint-stock company is vital for your venture’s success. AB offers access to broader capital markets and professional oversight, while UAB suits smaller enterprises seeking flexibility. Both structures underpin Lithuania’s well-regulated and investor-friendly corporate environment.
