How can a company be liquidated in Lithuania?
The Lithuanian companies can be liquidated voluntary by the free will of its members or compulsory by a Court’s decision. Usually the reasons why a company is liquidated are various such as the expiration of the time posted in the articles of association, the achieving of the purposes stated in those articles, if the company has broken the law or if its facing bankruptcy.
What are the steps for company liquidation in Lithuania?
The decision of voluntary liquidation is taken by the general meeting of the shareholders or by the general partners in a partnership.
The decision of voluntary liquidation can be taken only if there are no actions of bankruptcy process issued against the company.
The former management body is replaced by a person authorized to take all the necessary actions in order to conclude the liquidation. It has the same powers as the former manager but cannot conclude any new contracts or business unless are related to the process of company liquidation.
The liquidator must inform the Register of Enterprise regarding the beginning of the liquidation process and must deliver his details as liquidator. From the moment of company liquidation registration all the documents must be signed with the company’s name followed by the termination “Öin Liquidation”.
A balance sheet with all the available company’s assets must be elaborated by the liquidator and presented in front of a second general meeting. If approved, those assets will be used in order to cover the creditor’s claims.
Besides the balance sheet, the liquidator must also elaborate the annual accounts and liquidation reports but only if the process takes longer than a few years. These documents must be elaborated within three months of the end of each fiscal year.
In a period of time not shorter than two months an announcement regarding the liquidation of a Lithuanian company must be published. This announcement must contain a notification to the creditors stating the way the claims can be elaborated and the specific time frame in which these can be deposited.
The liquidator will use the company’s assets in order to cover in full the claims. In certain cases the company’s immovable or movable assets can be subject of auctions.The remaining assets are then divided between the entitled shareholders.
The last step which needs to be completed is erasing the company from the Lithuanian Register of Enterprises, process accomplished by the liquidator.
How long does it take to liquidate a company in Lithuania?
The process of company liquidation duration depends on many factors: the size of the company, the number of raised claim and the shareholders’ interests in the company. The shortest period of time in which a Lithuanian company can be liquidated is up to six weeks.