Opening a Private Limited Liability Company (UAB)
Establishing a UAB (Private Limited Liability Company) is a great choice for anyone interested in starting a small or medium-sized business. Many are attracted to its form and the level of risk: according to the Law on Companies, a UAB is a legal entity with limited liability. As a result, the shareholders’ personal assets are protected, and the business risks only its own assets. This legal form is an excellent choice for those wishing to collaborate with international clients and suppliers. Shareholders of a UAB can be both individuals and legal entities, which is very convenient when raising investment capital.
How to open a UAB?
A private limited liability company (UAB) in Lithuania can be established in several ways – either online or through a notary.
Establishing a UAB online is the fastest and most cost-effective way to start a business. The process usually takes 2–3 working days. To establish the company, you need to provide a chosen name, details of the director, shareholders, registered address, and contact information. UAB “Visenta” specialists prepare all the necessary formation documents, submit them electronically, and ensure that the process runs smoothly. The founder only needs to sign the prepared documents using a qualified electronic signature. More information at the registry center.
Another option is when the Visenta team carries out all the formation procedures on behalf of the client. In this case, the formation documents are prepared, the share capital (since 2024 the minimum required capital is 1,000 EUR) is formed, a company stamp is produced, and the already established company is handed over to the client with all the necessary documentation. This option is convenient for those who want to start their business quickly or purchase a ready-made company.
Establishing a UAB through a notary usually takes longer and is more expensive due to notarial fees. In this case, it is necessary to choose a company name, provide information about the founders and the director, and form the share capital. The notary certifies the incorporation documents and submits them to the Register Centre. After the company is registered, business activities can begin and a bank account may be opened.
UAB Formation: Pros and Cons
When establishing a UAB, it is important to assess both the advantages and disadvantages and determine whether this legal form suits your business needs. Since 2024, the minimum share capital requirement has been reduced to 1,000 EUR, making company formation more accessible. Compared to a public limited company (AB), which requires a share capital of 25,000 EUR, forming a UAB is simpler and more flexible.
A UAB may have up to 250 shareholders. When establishing a company, a registered address must be provided, incorporation documents must comply with legal requirements, and a temporary bank account must be opened to deposit the share capital. For online incorporation, a qualified electronic signature is required.
Although the process may seem formal, it involves only a few clear procedural steps. When the documentation is properly prepared, the registration process is fast and smooth. One of the main advantages of a UAB is limited shareholder liability and higher privacy – financial information does not need to be publicly disclosed.
Opening a UAB: What You Should Know
If you’re interested in creating a UAB, you should keep in mind the management aspects you may encounter:
- Shareholders can only receive profits through dividends, which can be paid out several times a year.
- If more investment funds are needed, there is the option to increase the number of shares and issue them to new shareholders.
- Shareholders have the right to exit the business by selling or transferring their shares.
- Decisions regarding the management of the company are made by voting. If needed, a supervisory board can also be formed.