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LITHUANIAN GOVERNMENT PLANS TO EASE THE PROCEDURES OF LIQUIDATION OF INACTIVE LEGAL ENTITIES

  • 2011-11-24
  • By Arturas Gutauskas, Associate Lawyer

ECOVIS Miškinis, Kvainauskas ir partneriai advokatų kontora

Lithuania’s government plans to amend numerous legal acts and to ease the procedure of liquidation of inactive legal entities.
Notwithstanding the threatening fines of up to 10,000 litas, according to the statistics there are more than 26,000 legal entities which have not provided annual financial reports for more than two years, and more than 56,000 legal entities have not renewed their registration data for more than 5 years. The majority of these legal entities are impossible to find at their registered office addresses. These inactive legal entities aggravate work of the Register of Legal Entities, influence incorrect statistics, and increase expenses of tax administration.

New regulations should provide the right for the Register of Legal Entities to initiate liquidation procedures even without applying to the courts. The basis to start liquidation procedures would be a failure of a legal entity to provide annual financial reports for more than two years, or failure to renew registration data for more than 5 years. Formal objection will not be enough to stop the liquidation procedure – a legal entity will have to provide comprehensive documents proving its activity. The goal of the government is to eliminate all inactive legal entities.

Owners of a legal entity can start a liquidation procedure themselves, though – they should make the decision, ensure funding of financial obligations and appoint a liquidator. Attorneys at law (or their assistants) provide services as professional liquidators.