Shareholder Rights and Obligations Under Lithuanian Law in Lithuania (2025–2026 Guide

Shareholder Rights and Obligations Under Lithuanian Law are a fundamental part of doing business in Lithuania, particularly for foreigners, investors, entrepreneurs, and professionals holding shares in Lithuanian companies in Vilnius, Kaunas, or Klaipėda.

Lithuanian corporate law provides a relatively predictable and investor-friendly framework. However, shareholder rights and duties depend heavily on the company’s legal form, its Articles of Association, and any shareholders’ agreement in place. Understanding these rules helps prevent disputes, protect investments, and ensure proper corporate governance.

Legal Background in Lithuania

Shareholder rights and obligations in Lithuania are primarily regulated by:

• The Law on Companies (Law on Joint Stock Companies)
• The Civil Code of the Republic of Lithuania
• Sector-specific legislation (for regulated industries)
• The company’s Articles of Association
• Shareholders’ agreements (where applicable)

Most Lithuanian companies operate as either:

• UAB (Private Limited Liability Company) – the most common structure for SMEs and foreign-owned businesses
• AB (Public Limited Liability Company) – used by larger companies and listed entities

In both structures, shareholders generally enjoy limited liability, meaning they are not personally responsible for company debts beyond their investment, except in specific cases defined by law.

Step-by-Step Legal Process

Understanding how to exercise shareholder rights and comply with obligations typically involves the following steps:

1. Identify the company type and share class
   Determine whether the company is a UAB or AB and confirm the class of shares held (ordinary, preference, non-voting).

2. Review the Articles of Association
   Check voting rights, dividend rules, quorum requirements, and share transfer restrictions.

3. Examine any shareholders’ agreement
   Pay attention to reserved matters, exit clauses, deadlock mechanisms, and dispute resolution provisions.

4. Confirm shareholder registration
   Ensure your ownership is properly recorded in the company’s shareholder records.

5. Exercise information rights correctly
   Submit written requests for documents such as financial statements, meeting minutes, or management reports.

6. Participate in general meetings
   Attend in person or by proxy, review agendas in advance, and ensure votes are properly recorded.

7. Respond promptly to violations
   If rights are breached, act quickly using formal notices, shareholder resolutions, or legal remedies.

Key Legal Requirements & Documents

Shareholders in Lithuania typically rely on the following documents:

• Articles of Association
• Shareholders’ agreement (if applicable)
• Share subscription agreement
• Share transfer agreement
• Shareholder register and ownership records
• General meeting notices, agendas, and minutes
• Annual financial statements and audit reports (if required)
• Management body resolutions
• Pre-emption notices and waivers
• Share pledge agreements (if shares are used as collateral)
• Beneficial ownership disclosure information

Accurate documentation is especially important for foreign investors during due diligence, financing, or exit transactions.

Common Legal Mistakes to Avoid

Common issues that often lead to disputes include:

• Ignoring the Articles of Association and relying on assumptions
• Failing to follow share transfer and pre-emption procedures
• Mixing shareholder loans with equity contributions without clear documentation
• Assuming dividends are automatic without a formal shareholder decision
• Overlooking minority protection thresholds
• Not planning dispute resolution and exit strategies in advance
• Non-compliance with beneficial ownership disclosure obligations

Avoiding these mistakes significantly reduces legal and financial risk.

Frequently Asked Questions (FAQ)

What rights do shareholders have under Lithuanian law?
Shareholders typically have voting rights, dividend rights (when declared), and information rights, subject to the company’s Articles of Association and share class.

Can foreigners be shareholders in Lithuanian companies?
Yes. In most sectors, foreigners may freely own shares in Lithuanian companies, with limited restrictions in regulated or strategic industries.

Are shareholders liable for company debts?
Generally no. Shareholders are usually liable only up to the amount they invested, except in specific legal circumstances.

How does share pre-emption work in a Lithuanian UAB?
Existing shareholders may have the right to acquire shares before they are transferred to third parties, following strict procedures set by law and internal documents.

What documents should be reviewed before investing?
Key documents include the Articles of Association, shareholders’ agreements, financial statements, meeting minutes, and ownership records.

What can a shareholder do if their rights are violated?
A shareholder may submit formal demands, request shareholder meetings, challenge decisions in court, or seek other legal remedies depending on the situation.

Conclusion

Shareholder Rights and Obligations Under Lithuanian Law play a central role in corporate governance and investment protection. For shareholders in Vilnius, Kaunas, and Klaipėda, a clear understanding of legal rights, internal company rules, and compliance obligations is essential.

Well-structured corporate documents, proper record-keeping, and early legal planning help ensure stability, transparency, and long-term success for both local and foreign shareholders in Lithuania.