Akcinė Bendrovė (AB): Lithuania’s Joint-Stock Companies

Quick answer

An akcinė bendrovė (AB) is a joint-stock company in Lithuania whose capital is divided into shares. It can have unlimited shareholders and may trade its shares publicly. This type of company is ideal for large-scale businesses and offers limited liability to its shareholders.

What Is an Akcinė Bendrovė (AB)? Full Guide for Business Owners

Thinking of starting or investing in a business in Lithuania? Then understanding the akcinė bendrovė (AB)—a joint-stock company—is essential. ABs are foundational to Lithuania’s corporate structure, especially for large enterprises aiming for public share distribution or foreign investment.

In this guide, we’ll explore everything you need to know about akcinė bendrovė companies: how they work, who runs them, their legal protections, and how they compare to Uždaroji Akcinė Bendrovė (UAB), the closed joint-stock company.

Whether you’re an entrepreneur, investor, or legal consultant, this blog post is your roadmap to mastering ABs in Lithuania.

Let’s unpack the essentials.

Key Facts About Akcinė Bendrovė (AB)

What Is an Akcinė Bendrovė (AB)?

An akcinė bendrovė is a type of Lithuanian legal entity where ownership is divided into shares. These shares can be bought and sold freely if the company is listed on a stock exchange. Each shareholder owns part of the company and their liability is limited to the capital they invested.

ABs are considered limited liability companies and are used for profit-seeking purposes. Because they support public share trading, they are often chosen for larger-scale businesses or those seeking outside investment.

Why Choose an AB Over a UAB?

Public Trading Capabilities

ABs can list their shares on stock exchanges, making them attractive to investors. UABs cannot sell shares publicly.

Scalability

ABs support unlimited shareholders, making them ideal for large corporations. In contrast, UABs are often capped and better suited for SMEs.

Capital Raising

Due to public share distribution, ABs can raise significant capital faster than UABs.

Company Formation Requirements

Capital Requirements

• AB: Minimum €25,000
• UAB: Minimum €1,000
  Capital contributions can be both cash and assets.

Founders

• May be individuals or legal entities.
• A single founder can establish the company.

Legal Registration

To register an AB, founders must submit:

• Articles of association
• Proof of capital contribution
• Management structure details
• Founding agreement

Corporate Structure of an AB

General Meeting of Shareholders

This is the highest governing body in an AB. Key powers include:

• Electing board and manager
• Approving annual reports
• Increasing/decreasing capital
• Approving mergers or liquidation

Supervisory Board (optional)

If formed, the supervisory board oversees management decisions, elects board members, and ensures lawful activity.

Board of Directors

Board members act collegially to:

• Approve major decisions
• Monitor the company manager
• Propose strategic initiatives

Company Manager

Appointed by the board, the manager oversees daily operations. Their powers may be limited by internal regulations, especially in financial transactions or charitable donations.

Legal Duties and Restrictions

Liability

Shareholders are not personally liable for the company’s obligations beyond their share contribution.

Asset Use

Managers must operate within the limits of their powers. Misuse, such as unauthorized donations, is restricted.

Contract Law Limits

Contracts aren’t questioned on fairness (e.g., overpaying) unless assets are gifted or wasted.

Compliance & Governance

Annual Audits

All ABs must undergo an external financial audit, ensuring transparency and legal compliance.

Reporting Obligations

ABs must submit:

• Annual financial statements
• Management reports
• Shareholder meeting resolutions

Shareholder Rights

• Receive dividends
• Vote on key issues
• Access certain company documents

Akcinė Bendrovė vs UAB: At a Glance

Choose AB if:

• You plan to go public
• You need significant capital
• You aim to scale rapidly

Choose UAB if:

• You run a small to mid-size business
• You want more private control
• You don’t need public trading

Conclusion

If your business is growth-oriented and you’re looking for funding or transparency, an akcinė bendrovė (AB) is the right structure. It offers strong governance, the ability to trade publicly, and robust shareholder protections.

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