Understanding Akcinė Bendrovė: A Deep Dive Into Lithuanian Joint-Stock Companies

What Is Akcinė Bendrovė?

“Akcinė Bendrovė” (AB) is the Lithuanian term for a joint-stock company. In simple terms, it’s a business entity where ownership is divided into shares. These shares can be bought, sold, and traded, making it a flexible and powerful structure for business expansion.

In Lithuania, an AB represents one of the highest forms of company structure, often used by large companies aiming to access capital markets or build a highly formalized corporate presence.

Legal Meaning and Structure

Definition According to Lithuanian Law

Lithuanian law defines “Akcinė Bendrovė” as a legal entity with limited liability, whose capital is divided into shares. It’s governed primarily by the Lithuanian Civil Code and the Law on Companies.

AB vs. UAB

There are two main types of joint-stock companies in Lithuania:

• Akcinė Bendrovė (AB) – Public Limited Company
• Uždaroji Akcinė Bendrovė (UAB) – Private Limited Company

The core difference lies in the public tradability of shares. ABs can trade shares publicly; UABs cannot.

Akcinė Bendrovė (AB) Explained

Key Characteristics

• Publicly tradable shares
• Minimum capital requirement: €40,000
• Governed by a board of directors and a general meeting of shareholders

Shareholder Liability

Shareholders are only liable up to the amount of their investment. That means your personal assets are protected.

Uždaroji Akcinė Bendrovė (UAB) Overview

How It Differs from AB

• UABs have a lower minimum capital requirement: €2,500
• Cannot publicly trade shares
• Better suited for small and medium-sized enterprises

Why Choose a UAB?

If you’re a startup or family-run business, a UAB offers flexibility and simplicity, with fewer compliance headaches.

Establishing an Akcinė Bendrovė

Registration Process

1. Choose your company name and structure.
2. Draft the Articles of Association.
3. Deposit capital in a bank account.
4. Register with the Centre of Registers.
5. Obtain a company code and VAT number (if needed).

Documents Required

• Founding act or agreement
• Articles of Association
• Proof of capital deposit
• Identity documents of shareholders

Corporate Governance

Organizational Structure

1. General Meeting of Shareholders – supreme governing body
2. Board of Directors – strategy and oversight
3. CEO – operational leadership

Roles and Responsibilities

Each management body has defined duties by law, ensuring accountability and smooth operation.

Taxation and Financial Requirements

Corporate Tax

• Corporate income tax rate: 15%
• Lower rates may apply to micro-companies under specific conditions

Financial Statements

ABs must submit annual financial statements and may require audits depending on company size.

Shareholding and Investment

Issuing Shares

Shares can be issued upon registration or later, and can be sold publicly.

Dividends

Profits are shared through dividends based on shareholding percentages.

Foreign Investment

Foreign investors are welcome and enjoy equal treatment under Lithuanian law.

Advantages of Forming an AB

• Easier to raise large capital
• Ability to list on stock exchanges
• Enhanced public perception
• Structured governance attracts big investors

Disadvantages and Challenges

• More expensive to set up than a UAB
• Requires thorough record-keeping
• Public scrutiny and stricter regulation

AB vs. Other Legal Forms

Form	Minimum Capital	Share Trading	Best For
AB	€40,000	Public	Large companies
UAB	€2,500	Private only	SMEs
IĮ	No min.	No shares	Sole proprietors
MB	No min.	No shares	Micro-businesses

Real-World Examples

Some major Lithuanian companies, such as Telia Lietuva AB and Ignitis Group AB, use this structure, benefiting from investor trust and broad capital access.

Foreign Ownership and Regulations

Yes, foreigners can fully own an AB. There are no nationality-based restrictions, making Lithuania a welcoming place for international entrepreneurs.

Liquidation and Exit Strategies

• Voluntary: Shareholders vote to dissolve
• Involuntary: Bankruptcy or legal issues
• Process includes deregistration, asset distribution, and final reporting

Future Outlook

Lithuania continues to streamline its business laws. With a pro-EU attitude, expect reforms that make it even easier for companies to operate as an AB.

Conclusion

Akcinė Bendrovė is more than just a corporate structure—it’s a gateway to serious business in Lithuania. Whether you’re an ambitious startup ready to scale or an established firm eyeing the Baltic market, understanding the ins and outs of an AB is essential. From legal setup to capital strategies, it offers both structure and opportunity.

FAQs

1. What is the difference between AB and UAB?
AB is a public joint-stock company with tradable shares, while UAB is private and better for SMEs.

2. Can I form an AB without living in Lithuania?
Yes, foreign individuals and companies can register an AB without residency.

3. How long does it take to register an AB?
Typically, it takes 5–10 business days if all documents are in order.

4. Is it mandatory to list an AB on the stock exchange?
No, it’s optional. ABs can remain privately held or choose to go public.

5. What are the tax benefits of ABs?
Standard corporate tax applies, but certain incentives exist for innovative and green businesses.