2007-09-27
A decision to found a joint-stock company is usually made, when there is more than one company’s founder, when a considerable capital is required and business risk is greater than average, and, in such a way, it is desirable to constrain civil liability, that is to separate personal property from company’s property.
Each company, irrespective of its legal form, should have a name. The most important is for the name not to be identical to or similar to names of other legal persons, institutions, and organizations.
The Civil Code provides for an exception, which establishes that name of legal person, who is connected to a foreign legal person or other organization, has to be formed in such a way that it would be identical or similar to the name of foreign legal person or other organization, in case there is a consent of the latter for using the name. Usually, a founder of a legal person consolidates such consent in a decision to found a legal person in the Republic of Lithuania.
It is necessary to pay attention to the fact that if name of your company is formed without following norms of literary Lithuanian language, you can be called to administrative accountability.
The procedure of founding a joint-stock company is not an easy one, although it is regulated by both the Civil Code and The law of the Republic of Lithuania on joint-stock companies.
A joint-stock company is founded by me on the basis of constituent contract or constituent instrument, which meets requirements of laws and other legal acts. It is considered that constituent contract or constituent instrument is a contract of signing shares at the same time. Founders or their authorized persons sign those documents, prior to that having made respective decisions to found a company. Their signatures are not notarized. Conclusion of constituent contract or constituent instrument grants a right to open a bank savings account of a company that is being founded. Initial installments for signed shares are placed to that account. In the event that authorized capital stock will be formed by transferring funds to savings account from abroad, remember to transfer a bit more funds to the account, so that a required amount of capital would be left in the account after counting off bank fees.
Having opened a bank savings account, a constituent assembly is called, during which company’s organs are chosen, articles of association are confirmed and signed. Authenticity of a signing person’s signature is not notarized. We remind you that in the event of founding joint-stock companies 10 days prior to constituent assembly at the latest, when all initial installments are paid up, a report of founding a joint-stock company, which is to meet requirements of laws, should be prepared. It is also confirmed during a constituent assembly.
Prior to giving to notary documents of establishing a CJSC, remember to take care of owner’s consent to provide quarters for company’s whereabouts. While founding a joint-stock company (JSC), it is also necessary to address concerning registering shares in the Lithuania Securities Committee. Prior to registering CJSC, first of all, constituent documents (as well as other documents, which a notary can require, for example, founder’s corporative documents) are presented to a notary. In a request of the established form to register a company, a notary has to confirm authenticity of recorded data, correspondence of provisions with requirements of the laws, that fact that a company can be registered and to confirm signature of company’s founder. Having received notary’s required confirmations, a company is registered in the legal entities register, by having provided in person articles of association confirmed by a notary, a request of the established form, and other documents. Those and other juridical documents are prepared by professional business management consultants, who understand not only procedures of legal foundation of companies, but also can give advice on taxes and business management.
Companies are registered in the legal entities register within 5 working days. Nevertheless, having registered a new company, all required formalities do not end there yet. Legal acts of the Republic of Lithuania oblige to register a company in respective institutions, oblige companies’ directors to take care of respective licenses, to take care of company stamp production. Since , frequently, those registrations have to be carried out within time frame established by the laws, it is necessary to carry out those actions as fast as possible, so that a company could be pursue its activity without hindrances.
