An akcine bendrove (AB) is one of the most common forms of business entities in Lithuania, especially for medium to large-scale enterprises. It operates under a joint-stock company model, where ownership is divided into shares that can be publicly or privately traded.
If you’re considering establishing an akcine bendrove AB, merging with one, or simply learning about its legal and financial structure, this guide will provide a detailed, original, and comprehensive breakdown—without relying on copied web sources.
What Is an Akcinė Bendrovė (AB)?
An akcinė bendrovė (AB) is a capital-based company where:
- Ownership is represented by shares (stocks).
- Shareholders have limited liability (they are not personally responsible for company debts).
- The company can be public (shares traded on a stock exchange) or private (shares held by a select group).
Key Characteristics of an AB
- Legal Entity: Operates independently from its shareholders.
- Minimum Share Capital: Higher than other business forms (e.g., UAB).
- Governance Structure: Managed by a board of directors and supervised by a shareholders’ meeting.
- Transferable Shares: Shares can be sold or inherited (unless restricted).
How Is an AB Different from Other Business Forms?
Lithuania has several business structures, but the most comparable is the UAB (private limited company). Here’s how they differ:
| Feature | Akcinė Bendrovė (AB) | Uždaroji Akcinė Bendrovė (UAB) |
| Minimum Capital | €25,000 (fully paid before registration) | €2,500 (can be paid gradually) |
| Share Trading | Can be public (listed on Nasdaq Vilnius) | Private (shares sold only with approval) |
| Shareholders | Minimum 1 (individual or company) | Minimum 1, maximum 250 |
| Disclosure Requirements | Higher (annual reports, audits) | Lower (simpler reporting) |
| Best For | Large businesses, investors, public offerings | Small to medium businesses, startups |
The Process of Establishing an Akcinė Bendrovė AB
Starting an AB requires careful planning and adherence to legal procedures. Here’s a step-by-step breakdown:
Step 1: Choose a Company Name
- Must be unique (check the Registrų Centras database).
- Must include “Akcinė Bendrovė” or the abbreviation “AB”.
Step 2: Prepare the Founding Documents
- Articles of Association (statutas) – defines company rules, share structure, governance.
- Founding Agreement (if multiple founders).
Step 3: Deposit the Minimum Capital (€25,000)
- Must be deposited in a Lithuanian bank before registration.
- Can be in cash or assets (property, intellectual rights).
Step 4: Register the Company
- Submit documents to the Registrų Centras (Enterprise Register).
- Register for taxes (VAT, payroll if applicable).
Step 5: Set Up Governance
- Appoint a board of directors (at least 1 member).
- Hold the first shareholders’ meeting to approve bylaws.
Legal and Financial Responsibilities of an AB
Once registered, an AB must comply with ongoing obligations:
A. Financial Reporting
- Annual Financial Statements (must follow IFRS or Lithuanian accounting standards).
- Audit Requirements (mandatory if exceeding certain revenue/employee thresholds).
B. Shareholder Rights & Meetings
- Annual General Meeting (AGM) – mandatory for key decisions (dividends, board elections).
- Voting Rights – proportional to share ownership.
C. Tax Obligations
- Corporate Tax: 15% on profits (Lithuania’s standard rate).
- Dividend Tax: 15% for shareholders (unless reduced by tax treaties).
- VAT Registration: Required if turnover exceeds €45,000/year.
Advantages and Disadvantages of an AB
✔️ Advantages
- Limited Liability – shareholders risk only their investment.
- Investment Opportunities – can issue shares to raise capital.
- Prestige & Credibility – seen as more stable than UABs.
❌ Disadvantages
- Higher Setup Costs (€25,000 minimum capital).
- Stricter Regulations (more reporting, potential audits).
- Less Privacy (public ABs disclose financial data).
When Should You Choose an AB?
An AB is ideal if:
✅ You plan to attract investors or go public.
✅ Your business requires large-scale funding.
✅ You need enhanced credibility (e.g., for international contracts).
However, if you’re a small business or startup, a UAB may be more cost-effective.
Conclusion: Is an AB Right for You?
An akcinė bendrovė (AB) is a powerful business structure for companies seeking growth, investment, and a strong market presence. However, it comes with higher costs and stricter regulations than a UAB.
Before deciding:
🔹 Consult a business lawyer for compliance advice.
🔹 Compare with UAB if you’re a smaller enterprise.
🔹 Plan your capital (€25,000 must be secured upfront).
If you’re ready for large-scale operations, an AB could be the perfect choice for your business ambitions in Lithuania.