We would like to remind you that after the end of the financial year, Management Board of Lithuanian public and private limited liability companies (“Companies” or “Company”) or Managing Director (when Management Board is not formed) shall adopt the decision to convene the Annual General Meeting of the Shareholders (“Shareholders’ Meeting”).  

Below you will find a brief summary of the steps for preparation for the Shareholders’ Meeting and information on the decisions which are required or recommendable to be adopted at the Shareholders’ Meeting.

Convening of Shareholders’ Meeting

The Shareholders’ Meeting of the Company must be held within four months of the end of the financial year of the Company. Thus, if the financial year of the Company coincides with the calendar year, the Shareholders’ Meeting has to be held not later than by 30th of April.

The agenda of the Shareholders’ Meeting shall be drawn up by the Management Board or Managing Director (when Management Board is not formed) of the Company. Other management bodies of the Company (except for the Shareholders’ Meeting) or shareholders, who hold shares carrying at least 1/20 of all the votes, may suggest the amendments to the agenda. Shareholders’ Meeting shall not be entitled to make decisions on the matters that are not on the agenda, except when the Meeting is attended by all shareholders, whose shares carry voting rights, and no shareholder has voted in writing.

A notice on the Shareholders’ Meeting has to be published in the source indicated in the Articles of Association of the Company, or delivered to each shareholder against the receipt, or sent to each shareholder via registered post not later than 21 days before the Shareholders’ Meeting.

Decisions taken at the Shareholders’ Meeting

The Shareholders’ Meeting has to take the Annual Report into consideration, to approve the Annual Financial Statements of the Company, as well as to allocate the distributable profit or loss of the Company. Other decisions may also be passed at the Shareholders’ Meeting, including change of Articles of Association, increase/reduction of the share capital, election of the members of the Management Board/Supervisory Board, reorganisation, formation of reserves, election of the audit company for the forthcoming years etc.

Change in share capital

The share capital of the Company may be reduced only for the following purposes:

• a reduction of the share capital (with or without a subsequent share capital increase) could be used as an option to restore the required share and equity capital ratio (2:1);

• for the purpose of distribution of free funds of the Company to shareholders (this procedure can only be initiated at the Annual Shareholders’ Meeting and only when the Set of Annual Financial Statements is approved, distributable profit of the Company is distributed and in case all other requirements established by the Company Law are met);

• for the purpose of cancelling the shares acquired by the Company;

• for the purpose of correcting the mistakes made in the course of formation or increase of the share capital.

Election of the members of the Management/Supervisory Board

The Management/Supervisory Board performs its functions for the period established in the Articles of Association of the Company or until the new Management/Supervisory Board is elected, but no longer than until the Shareholders’ Meeting, held in the last year of the term of office of the Management/Supervisory Board, takes place.  We recommend reviewing whether the authorisations of the Management/Supervisory Board of your company have not expired. Please be reminded, that the number of terms of Management/Supervisory Board member’s office shall not be limited.

Change of Articles of Association

Only Shareholders’ Meeting has the right to decide on change of the Articles of Association of the Company. Following such decision, the full text of the amended Articles of Association shall be drawn up and signed by the person authorised by the Shareholder’s Meeting.

Set of Annual Financial Statements

The Managing Director of the Company is responsible for preparation of the Set of Annual Financial Statements and Annual Report of the Company. If the Management Board is formed, it has to analyse and review the draft Set of Annual Financial Statements, the draft proposal on distribution of profit or loss, and together with the Annual Report of the Company to submit these documents to the Shareholders’ Meeting (and to the Supervisory Board, if it is formed) for approval.

If an audit of the Set of Annual Financial Statements is compulsory under the laws or according to the Articles of Association of the Company, the Shareholders’ Meeting approves only the audited Set of Annual Financial Statements. The Set of Annual Financial Statements of the Company must be audited if at least two indicators thereof on the last day of the financial year exceed the following limits:

• net turnover during the reported financial year exceeds LTL 12 million;

• the value of the assets reported in the balance sheet is above LTL 6 million;

• the average number of employees during the reported financial year exceeds 50 persons.

The audit of the Set of Annual Financial Statements is also compulsory for private limited liability companies, whose shareholder is the state and/or municipality, and for all public limited liability companies.

Small and medium size Companies which prepare condensed Financial Statements may opt not to prepare an Annual Report. In such cases the explanatory letter to the Set of Annual Financial Statements needs to contain comprehensive information regarding the shares acquired and owned by the Company.

The Annual Financial Statements of the Company together with the Annual Report and the Auditor’s Report need to be submitted to the Commercial Register within 30 days of the Shareholders’ Meeting taking place.

Note: This summary is compiled for informational purposes only and cannot be treated as binding advice.