What in the world does the term “Akcinė Bendrovė” mean, you ask yourself after hearing it? You’re not alone, so don’t worry! A joint-stock corporation, a corporate form that permits investment through shareholding, is referred to by this Lithuanian phrase. Knowing this word is crucial whether you intend to grow your company into Lithuania or are just inquisitive.
In the Lithuanian and EU markets, an Akcinė Bendrovė (AB) might be the ideal business model for scalability, credibility, and profitability. Let’s examine the specifics.
Understanding the Concept
Definition of Akcinė Bendrovė (AB)
In Lithuania, An Akcinė Bendrovė, sometimes known as AB, is a joint-stock business. Shareholders can purchase or sell the capital that has been divided into shares by this legitimate business entity. To put it another way, it’s similar to a company that has been divided into manageable chunks for investors.
Difference Between AB and Other Business Entities
Unlike small private companies (UAB), ABs are often larger and more public-facing. While a Uždaroji Akcinė Bendrovė (UAB) is a closed company, an AB can be publicly listed, opening the doors to public investment.
Legal Foundation in Lithuania
ABs are governed by the Lithuanian Civil Code and Law on Companies, which ensure transparency, protect shareholders, and standardize business operations.
Types of Akcinė Bendrovė
Public Akcinė Bendrovė
This type allows shares to be traded on the stock exchange, making it a great choice for large-scale operations.
Private Akcinė Bendrovė (UAB)
Not to be confused with AB, a UAB is a private joint-stock company. It’s ideal for startups or small-to-medium businesses.
Key Features of an Akcinė Bendrovė
Shareholder Structure
ABs can have one or more shareholders, and ownership is proportional to the number of shares held.
Capital Requirements
The minimum share capital to start an AB is €40,000—a sign that it’s built for serious business.
Transparency and Reporting Duties
Annual reports, shareholder meetings, and audit compliance are mandatory, ensuring transparency and investor trust.
Liability and Risk
Shareholders are only liable up to the amount of their investment. So, no worries about losing your house if things go south!
Formation Process
Requirements to Start an AB
To get started, you’ll need:
- A unique company name
- Shareholders
- Minimum capital
- Articles of Association
Registration Process Step-by-Step
- Draft legal documents
- Deposit capital
- Register with the Register of Legal Entities
- Obtain a tax ID
Necessary Documents
- Founding agreement
- Articles of Association
- Shareholder list
- Proof of capital deposit
Governance and Management
Board of Directors
The board handles high-level strategy and governance decisions.
Supervisory Board
Optional but recommended for oversight, especially in public ABs.
CEO Responsibilities
The CEO or Managing Director handles the day-to-day operations and reports to the board.
Shareholding and Rights
Types of Shares
ABs may issue:
- Ordinary shares
- Preferred shares
Shareholder Rights and Duties
These include voting, dividends, and access to company records.
Profit Distribution
Profits are shared proportionally to share ownership, usually as dividends.
Taxation and Financial Aspects
Corporate Taxes in Lithuania
The corporate income tax rate is 15%, but incentives may apply to startups or specific sectors.
Dividends and Taxation
Dividends are typically taxed at 15%, but treaties can lower the rate for foreign investors.
Financial Reporting Obligations
Annual audits are mandatory for large companies, and reports must be filed with the government.
Pros and Cons of Starting an Akcinė Bendrovė
Advantages
- High credibility
- Access to capital markets
- Share transferability
- Limited liability
Disadvantages
- Higher setup cost
- Regulatory requirements
- Public disclosure
Akcinė Bendrovė vs. UAB
Key Differences
| Feature | AB | UAB |
| Public Trading | Yes | No |
| Minimum Capital | €40,000 | €2,500 |
| Number of Shareholders | 1+ | 1–249 |
Choosing the Right Form for Your Business
If you’re aiming big and want external investors, go with an AB. If you’re a small startup, UAB might be more practical.
Compliance and Regulatory Oversight
Role of Lithuanian Institutions
- Register of Legal Entities
- State Tax Inspectorate
- Bank of Lithuania (for listed companies)
Penalties for Non-Compliance
Failure to report or comply may result in fines, suspension, or dissolution.
Real-World Examples
Notable Akcinė Bendrovė Companies in Lithuania
- AB “Ignitis grupė” – energy
- AB “Vilniaus baldai” – furniture manufacturing
- AB “Lietuvos energija” – electricity provider
Their Success Stories
These companies have become regional powerhouses, thanks to their AB structure which allowed them to scale and attract investors.
International Perspective
Comparison with Joint-Stock Companies in Other Countries
- USA: Corporation (Inc.)
- Germany: Aktiengesellschaft (AG)
- France: Société Anonyme (SA)
Foreign Investment Opportunities in Lithuanian ABs
Yes, foreign nationals and companies can own shares in ABs. Lithuania is part of the EU, making it an attractive gateway to European markets.
When to Consider Forming an AB
Best Scenarios for Choosing AB
- When planning an IPO
- If you need large-scale investment
- For long-term credibility and structure
Long-Term Growth and Scalability
An AB is tailor-made for businesses with big ambitions and long-term growth strategies.
Conclusion
An Akcinė Bendrovė (AB) is more than just a company type—it’s a launchpad for ambitious businesses in Lithuania. With its structured governance, access to public capital, and legal protections, it’s perfect for companies ready to go big. Whether you’re local or international, if you’re thinking about serious business in the Baltics, an AB is worth a hard look.
FAQs
What is the minimum capital required for an AB?
The minimum capital is €40,000, and it must be fully paid before registration.
Can foreigners own shares in a Lithuanian AB?
Yes! Lithuania welcomes foreign investment, and AB shares can be fully foreign-owned.
What’s the difference between an AB and a UAB?
ABs can be publicly listed and require higher capital, while UABs are private and more suited for small businesses.
How do I dissolve an Akcinė Bendrovė?
You’ll need shareholder approval, settle debts, and notify the Register of Legal Entities.
Is it necessary to list an AB on the stock exchange?
No, only public ABs need to be listed. Private ABs operate without being on the stock market.