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Lithuania

Mergers

Updated 10/2010

Legal requirements

The following are the main legal acts regulating company mergers:

Types of merger

A cross-border company merger (hereinafter 'merger') is an operation whereby:

  • one or several companies, on being dissolved without going into liquidation (the companies being acquired), are joined to another existing company (the acquiring company) to which all assets and liabilities of the companies being acquired transfer;
  • two or more companies, on being dissolved without going into liquidation, are consolidated into a new company formed by them to which all assets and liabilities of the companies ceasing to exist transfer;
  • one or several companies, on being dissolved without going into liquidation (the companies being acquired), are joined to another existing company (the acquiring company) which owns all securities of the companies being acquired or shares representing the capital of the companies being acquired and to which all assets and liabilities of the companies being acquired transfer.

Buying an existing company, with an already established structure, can be a good way of expanding your business.

Administrative procedures

Terms of merger

The board (or, if a board is not formed, the head) of every merging public or private limited liability company must prepare jointly with other merging companies terms of merger, in which, among other conditions, the following must be indicated:

  • the name, legal form and registered office of each merging company; the prospective name, legal form and registered office of the company resulting from the merger;
  • way of merger (joining or consolidation);
  • the ratio of the exchange of securities or shares representing the capital of the companies which cease to exist after the merger into securities or shares representing the capital of the company resulting from the merger;
  • the rules for the issue to members of securities or shares representing the capital of the company resulting from the merger;
  • the difference in the price of securities or shares representing the capital of the company resulting from the merger belonging to and received by the members to be paid out in cash;
  • the possible effect of the merger on employment;
  • the moment from which the members of the company that ceases to exist after the merger will be entitled to profits of the company resulting from the merger, and all of the conditions affecting that entitlement;
  • the moment from which the transactions of the company that cease to exist after the merger will be treated for accounting purposes as being the transactions of the company resulting from the merger;
  • rights, or measures proposed concerning them, conferred by the company resulting from the merger on members enjoying special rights or on holders of securities other than shares representing the capital of the company;
  • any special rights granted to members of administrative, management, supervisory and controlling bodies of the merging companies and experts assessing the terms of merger;
  • if needed, the procedures which will be applied in order to determine the terms of participation in making decisions by the employees of the company resulting from the merger;
  • information about the valuation of the assets and liabilities which will transfer to the company resulting from the merger;
  • the dates of the drawing up of financial statements of the merging companies, which were used in preparing the terms of merger.

The articles of association of the company resulting from the merger must be drawn up together with the terms of merger.  Until the completion of the merger, the articles of association shall be an inseparable part of the terms of merger. If Lithuanian law will be applied to the company resulting from the merger, the provisions of the Lithuanian Law on Companies shall apply to the contents of its articles of association.

The terms of merger must be assessed by (an) independent expert(s) - an audit firm with whom a contract is to be concluded by every merging public or private limited liability company. The independent expert(s) shall prepare an assessment report for terms of merger intended for shareholders for each merging public or private limited liability company.

The board (or, if the board is not formed, the head) of each merging public or private limited liability company must draw up a detailed written merger report intended for the shareholders.

Notifying and informing about the merger

Each merging public or private limited liability company must announce publicly thrice of the drawn up terms of merger in the daily specified in the articles of association at intervals not shorter than 30 days, or announce publicly once of them in the daily specified in the articles of association not later than 40 days before the date of the general meeting of shareholders, in the agenda of which it is foreseen to adopt a decision on the merger, and notify all the company creditors of them in writing. The requirements set in the Law on Companies for the contents of an announcement or notification about a prospective reorganisation apply to the announcement or notification .

From the day of the public announcement of the drawing up of the terms of merger in the daily specified in the articles of association, the public or private limited liability company which will cease to exist after the merger acquires the status of a public or private limited liability company being merged in a cross-border merger, while the public or private limited liability company resulting from the merger acquires the status of a public or private limited liability company participating in a cross-border merger.

Registration

Not later than on the first day of the public announcement of the drawing of the terms of merger, the document and data suppliers of a legal entity being merged and a legal entity participating in a merger shall submit the following documents to the Manager of the Register:

  • a request to register or record the legal status of a legal entity (a public or private limited liability company being merged in a cross-border merger or a public or private limited liability company participating in a cross-border merger); information indicated in the Rules of the Register of Legal Entities is to be provided together with the request;
  • the terms of merger/the draft terms of merger;
  • the founding documents of the legal entity resulting from the merger;
  • an assessment report for the (draft) terms and a report prepared by the managing bodies, if the submission of such reports is mandated by law;
  • a permit from a state supervisory institution, if the issuance of such a permit is mandated by law;
  • a document confirming payment of the registration fee;
  • a document indicating the measures that the merging public or private limited liability companies have taken in order to discharge or additionally guarantee liabilities to creditors, guarantee the implementation of the rights of minority members of such companies, and also where and when it is possible to receive free of charge complete information relating to the said measures.

If the company resulting from the merger will be subject to Lithuanian law, the merger shall be deemed completed from the date of the registration of the new public or private limited liability company formed after the merger or the registration in the Register of Legal Entities of the amended articles of association of the public or private limited liability company resulting from the cross-border merger.

For the scrutiny of the legality of merger procedures of a merging public or private limited liability company, the norms of Lithuanian law regulating the scrutiny of the legality of the procedures of reorganisation by way of merger of public or private limited liability companies shall apply.

A new public or private limited liability company formed after a merger or the amended articles of association of a public or private limited liability company resulting from a merger shall be registered in the Register of Legal Entities not earlier than after the lapse of 10 days from the completion of scrutiny of the legality of the merger.

When the terms of merger have been implemented within the timeframe set in laws and in the terms of merger, the document and data providers of legal entities being merged or the document and data providers of legal entities resulting from the merger shall submit the following documents to the Manager of the Register:

  • a request to register the new legal entity signed by the document and data providers of all merging legal entities, or a request to register amended Register data;
  • the founding documents of the new legal entity, or the amendments to the founding document and the entire amended text of the founding document (2 copies);
  • the approved terms of merger;
  • a property valuation report, if it is necessary to determine the value of property in accordance with law;
  • the documents indicated in Item 74 of these Rules;
  • a licence, if a licence has to be issued in accordance with law;
  • certificates issued no earlier than 6 months ago by the competent institutions of European Union Member States or other states of the European Economic Area certifying that all actions and formalities necessary before a merger have been performed;
  • a document confirming payment of the registration fee.

Resources

Information about legal entities is provided on the website of the Centre of Registers:

Help & advice

Help & advice

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