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Annual Shareholders‘ Meeting 2024

Peculiarities of convocation of Shareholder‘s Meetings, Supervisory Board and Board meetings, participation in them, and formalization of decisions taken remotely

Please find below the information on the preparation for the annual General Shareholders’ Meeting and decisions which are required or recommended to be adopted during the meeting, as well as peculiarities of convocation of General Shareholders’ Meeting, Supervisory Board and Board meetings, participation in them and formalization of decisions taken remotely.

Convening the General Shareholders’ Meeting

The Annual General Shareholders’ Meeting (hereinafter – the “Shareholders’ Meeting”) must be held each year within at least 4 months after the end of the financial year of public or private limited liability company (hereinafter – the “Company”). Thus, if the financial year of the Company coincides with the calendar year, the Shareholders’ Meeting, where the annual financial statements for FY 2023 shall be approved, must take place by 30 April 2024. Shareholders must be informed about the upcoming Shareholders’ Meeting not later than 21 days before the meeting, except if longer terms are provided in the Company’s Articles of Association. Consequently, this year a notice of the convening of the Shareholder’s Meeting must be issued no later than 9 April 2024. The above-indicated terms can be not followed if all shareholders will give consent under the signature.


Decisions of the Shareholders’ Meeting

The Shareholders’ Meeting has to approve the annual financial statements of the Company and distribute the profit (loss), as well as to get acquainted with the annual report prepared by the Managing Director, except for the cases when the Company is exempted from this obligation. If an audit of annual financial statements is mandatory under the laws or Articles of Association of the Company, the Shareholders’ Meeting may approve only the audited financial statements.

Shareholders’ Meeting may adopt other decisions as well, such as the decision on approval of a new wording of Articles of Association, election of board members, increase/reduction of the share capital, election of audit company for the following year, etc.

The Company‘s annual financial statements together with the annual report and auditor‘s report (if applicable) must be submitted to the Lithuanian Register of Legal Entities within 30 days after the Shareholders‘ Meeting.


Members of the Board/Supervisory Board

The Board/Supervisory Board performs its functions for the period established by the Articles of Association of the Company or until the new Board/Supervisory Board is elected and starts to act, however, no longer than until the Shareholders’ Meeting takes place in the last year of the tenure of the Board/Supervisory Board. We recommend verifying, whether authorizations of the members of the Board/Supervisory Board of your Company are not expiring this year, and adopting appropriate decisions, if necessary.


Annual Financial Statements

The Managing Director is responsible for the preparation of the Annual Financial Statements of the Company. If the Board is formed in the Company, it analyses and evaluates the Annual Financial Statements, as well as the draft proposal on profit (loss) distribution, and submits these documents for approval to the Shareholders’ Meeting (before the Supervisory Board, if it is formed).

In case the audit of the Annual Financial Statements is not required by the Articles of Association of the Company, the statutory audit must be performed if at least two indicators exceed the following limits on the last day of the financial year:

  • net turnover during the reported financial year exceeds EUR 3,500,000;
  • the value of the assets reported in the balance sheet is above EUR 1,800,000;
  • the average number of employees during the reported financial year exceeds 50 persons.

The audit of the 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.


Profit or loss distribution

When distributing profit or loss it is important to remember that dividends may be allocated and paid provided that all of the following conditions are satisfied:

  • the Company has no outstanding obligations which ought to have been discharged before the adoption of the decision;
  • the aggregate of profit/loss of the reporting financial year available for distribution is positive (profit has been earned);
  • the equity capital of the Company is higher or upon payment of dividends would not become lower than the aggregate amount of the capital of the Company, the legal reserve, the revaluation reserve, and the reserve for acquisition of its own shares;
  • the Company has paid all the taxes prescribed by laws within the established time limits;
  • mandatory deductions to the legal reserve have been made.

If shareholders were paid interim dividends for a period shorter than the financial year, the sum of such interim dividends must be indicated separately in the decision of the Shareholder’s Meeting. Please also be reminded that the Company must pay allocated dividends no later than within one month from the day of the adoption of the decision.   

If during the financial year losses were incurred, following a decision of the shareholders, they may be covered by transfers from reserves, share premiums, or shareholders’ contributions. If the Company's equity capital has decreased to less than 1/2 of the amount of the authorized capital referred to in the Articles of Association, the Board (or, in the absence of the Board, the Managing Director), not later than 3 months from the date on which it became aware of the situation or should have become aware of the situation, is required to call Shareholders' Meeting to take decisions on how to remedy the situation. Also, please note that, if the equity capital is not restored to the amount equal to 1/2 of the share capital indicated in the Articles of Association, the law sets the requirement for the Shareholders’ Meeting to decide on the reduction of the share capital, the restructuring of the Company or the liquidation of the Company. If the Managing Director/the Board or the shareholders fail to comply with these duties and do not take the initiative to remedy the Company's financial situation, such failure to do so may, in the event of the Company's insolvency, create a ground for the personal liability of the shareholders and/or the Managing Director/the Board members.


Participation in the Meeting, voting, and formalization of decisions remotely

Additional requirements for remote attendance at meetings may be provided (or such possibility might be restricted) by the Company's Articles of Association, Shareholders' Agreements, and other documents regulating the activities of shareholders and members of the management bodies. That is why it is necessary to evaluate these documents individually or to consult with a lawyer. However, the Company must provide the possibility for shareholders to participate and vote by means of electronic communications when so requested by shareholders holding shares carrying at least 1/10 of the total number of votes unless the Company’s Articles of Association provide for a lower number of votes.

It should be noted that the requirements and restrictions for the use of electronic means of communication for the organization of meetings and voting remotely may be applied only to the extent that they are necessary for the identification and security of the information transmitted and are proportionate to achieving these objectives. However, the identity of the person attending and voting at the Shareholders’ Meeting remotely must be verified before the meeting and for each matter to be voted on, unless all the shareholders present at the Shareholders’ Meeting vote by means of an electronic communication capable of transmitting a live image of the meeting, or in case the vote is conducted by written ballot or by voting with general voting ballots.

In practice, the most common way to organize remote voting is through filling general voting ballots and signing them by ordinary or electronic signature. General voting ballots signed by a regular signature should be sent to the Company by mail, and the ones signed with electronic signature should be sent to the Company's predetermined email address. The signed general voting ballot must reach the Company no later than the beginning of the meeting (otherwise the decisions of the shareholder indicated in such voting ballot will not be included in the voting results). In any case, the law obliges the Company to indicate the procedure of participation and voting in the Shareholders’ Meeting by electronic means in the notice of convening the Shareholders' Meeting.

If the signing of the minutes of the meeting or the voting ballot is organized using an electronic signature, such signature must be an EU-qualified electronic signature or a third-country qualified electronic signature created using a qualified electronic signature certificate.

Where there is a sole shareholder, the decisions of the General Meeting of Shareholders may also be formalized by a written decision of this sole shareholder.

Note: This summary is compiled for informational purposes only and cannot be treated as binding advice. Should you require more information, please contact:

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