Official translation
COMPANY LAW
5 July 1994 No. I-528
(As amended by 23 December 1996)
Vilnius
Chapter 1
GENERAL PROVISIONS
The Law shall regulate the establishment, reorganisation and liquidation of public and private companies, their management and activities, as well as the rights and obligations of their shareholders. When the text of the Law applies both to public and private companies, they shall be referred to by the term "Companies."
Article 2. Public Companies and Private Companies
1. A Company is an enterprise whose authorised capital is divided into shares. It may be formed for any business not prohibited by the laws of the Republic of Lithuania. A Company is a legal person.
2. A Company is a limited liability formation. It shall be liable for its obligations only to the extent of its assets. The shareholders shall be liable only for the amounts which they must pay for their shares.
3. The amount of the authorised capital of a public Company may not be less than 100 000 litas. Its shares may be circulated and traded in publicly.
4. The amount of the authorised capital of a private Company may not be less than 10 000 litas. A private Company must limit the number of its shareholders to 50. The shares of a private Company may not be circulated or traded in publicly, unless the laws regulating the sale of state-owned property (shares) provide otherwise.
6. A Company may be established for a period of limited or unlimited duration. If the Articles of Association of a Company do not specify the period for which it is established, it shall be deemed to have perpetual existence. The duration of a Company may be extended, accordingly amending its Articles of Association. (Amended 20 December 1995)
Article 3. Incorporators
1. The incorporators of a Company shall be natural or legal persons who have executed the Company incorporation agreement (act) in accordance with the procedure established by this Law. Natural and legal persons of the Republic of Lithuania and other states may be incorporators. The number of incorporators shall not be limited. Each incorporator of a Company must be its shareholder. If at least one of the incorporators (investors) of a Company is a foreign person, the laws of the Republic of Lithuania which regulate foreign investment shall also apply to the Company.
2. If a Company is formed by one person, an incorporation act shall be drawn up instead of the Company incorporation agreement and the requirements of the incorporation agreement shall apply to it.
3.The incorporators shall conclude an agreement on the incorporation of the Company. The following must be specified in the incorporation agreement :
4) the rights and obligations of the incorporators in the formation of the Company and liability for failure to fulfil their obligations;
9) the incorporators who may represent the Company. (Amended 20 December 1995)
The agreement shall be signed by all incorporators or persons authorised by them. If at least one of the incorporators is a natural person, the agreement must be certified by a notary. If all the incorporators are legal persons or enterprises, the signature of their manager or authorised person shall be certified by a seal. The procedure established for natural persons shall apply to a foreign legal person who does not possess a seal.
The agreement on the incorporation of a Company shall be a public document.
4. A Company incorporation agreement or an act on the incorporation of a Company concluded in accordance with the procedure established by this Law shall grant the right to open a settlement account with a bank registered in the Republic of Lithuania.
5. Upon executing a Company incorporation agreement, the incorporators shall draw up the Company's Articles of Association and offer for sale shares. The incorporators of a public Company shall be entitled to offer shares for sale only upon registering the Company's Articles of Association in accordance with the procedure established by the Law on the Register of Enterprises of the Republic of Lithuania as well as upon registering the issue of shares with the Securities Commission.
6. Prior to the statutory general meeting, any incorporator as well as the persons specified in the incorporation agreement shall be entitled to conclude contracts in the name of the Company which is being incorporated. Upon their approval by the statutory general meeting, said contracts shall create obligations for the Company. In the event that the meeting refuses to approve said contracts, the incorporators shall be jointly liable for the obligations thereunder, whereas other persons stated in the incorporation agreement shall be severally liable therefor. Upon the proposal of the incorporator the general meeting may transfer to the Company the obligations under the contracts concluded by the incorporator in his own name.
7. The shareholders shall have the right to request that the incorporators compensate for the losses incurred by the Company prior to the day of its registration by reason of failure to fulfil the obligations, dishonest management of the affairs related to the incorporation, with the exception of cases where the losses have been incurred through normal industrial or business risks. Disputes concerning the compensation of losses shall be settled in court.
8. By drawing up the record of transfer and receipt the incorporators must within 7 days of the day of the statutory general meeting transfer the Company's assets and documents to the Board (if it has not been elected - to the head of the Administration).
Article 4. Shareholders
1. A shareholder shall be a natural or a legal person, the state or municipality who has at least one share in the Company acquired under law. The state or the municipality shall be represented in the Company by a state or municipal institution. (Amended 20 December 1995)
2. Each shareholder shall have such rights in the Company which are incidental to the shares in the Company held by him.
3. If the holder of all shares in a Company is one natural or legal person, the person's written decisions shall be equivalent to the resolutions of the general meeting.
Article 5. Special Purpose Companies
1. The status of special purpose Companies may be assigned to Companies which fulfil functions that are of vital significance for the state or Companies whose activities require a special regime. The sphere of activity in which special purpose Companies may operate shall be approved by the Seimas on the recommendation of the Government of the Republic of Lithuania.
2. The shares held by an institution of state power and government in a special purpose Company must account to at least 70% of votes.
3. The institutions of state power and government possessing controlling interest in a special purpose Company shall be entitled to establish the following:
4. Taking into account the specific character of a Company, the terms and conditions set forth in Par. 3 hereof must be provided for in the Company's Articles of Association.
Chapter 2
INCORPORATION, REORGANISATION AND LIQUIDATION OF A COMPANY
Article 6. Incorporation of a Company
1. A private Company may be founded only in a closed manner, whereas a public Company may be founded either in a closed or in an open manner.
2. A Company shall be founded in a closed manner by forming its authorised capital from contributions received for issued shares acquired only by the incorporators.
3. A Company shall be founded in an open manner by forming its authorised capital from contributions received for issued shares a portion whereof is acquired by the incorporators while the remaining shares are offered for sale to other persons.
4. The business year of a Company shall be a calendar year. Other 12-month periods may also be established in the Articles of Association for the beginning and the end of the Company's business year. If a Company is registered after the commencement of the business year, the day of the end of the Company's business year provided for in the Company's Articles of Association shall be considered the end of the first business year of the Company. If a Company is crossed off the Register prior to the end of the business year, the last business year shall end by the day the Company is crossed off the Register.
5. The incorporators must prepare a statutory report specifying:
3) non-pecuniary (property) contributions, the value of said contributions and valuation methods submitted to the meeting for approval;
6. The statutory report must be audited and conclusions thereon must be submitted to the statutory meeting by an independent auditor who shall have the right to invite property valuation experts. If the incorporators deny the auditor, inspector the required information and explanations, the auditor, inspector shall inform the statutory meeting thereof in writing. Each shareholder shall have the right to familiarise himself with the statutory report and the auditor's findings and to make copies thereof. (Amended 20 December 1995)
7. If, during incorporation, not all shares in a public Company are subscribed for during the time prescribed for the subscription for shares, the amount of the authorised capital may be reduced on the decision of the statutory meeting, but by not more than 50%. The reduced amount of the authorised capital may not be less than the minimum amount under Par. 3 of Article 2 of this Law. If during the time prescribed for the subscription for shares not all shares are subscribed for and the amount of the authorised capital is not reduced, the public Company may not be registered. In this case the contributions of the subscribers must be returned to them without any deductions within 15 days. All the incorporators shall be jointly liable for the return of the contributions.
8. Within 60 days of the end of the subscription period or the last day of the subscription for shares (in the event that all shares are subscribed for prior to the fixed date) the incorporators must call the statutory general meeting. If the general meeting is not called within the above period, all the subscribers shall be relieved of their obligations to the Company and shall have the right to request full return of their contributions for the shares within 15 days.
9. The provisions established by this Law for the general meeting shall apply to the statutory general meeting. The statutory general meeting shall be attended by the incorporators of the Company. If there is no quorum, another meeting shall be called. (Amended 20 December 1995)
10. The statutory general meeting shall approve the statutory report of the Company and the contracts concluded by the incorporators, elect the managing bodies, the inspector or auditor, may amend or supplement the Articles of Association, settle other issues within the competence of the general meeting. (Amended 20 December 1995)
12. Remuneration for the incorporation of a Company or compensation of the incorporation expenses may be paid to the incorporators or to third persons provided that civil contracts have been concluded with them and the incorporation costs are substantiated by documents. Disputes between the incorporators, shareholders and third persons concerning the compensation of incorporation costs and remuneration for the incorporation shall be settled in court.
Article 7. The Company's Articles of Association
1 The Articles of Association of a Company constitute a legal document governing the conduct of the Company's business.
2. The Articles of Association must state:
4) the procedure for transferring registered shares to the ownership of other persons in the cases specified in Par. 7 of Article 34 of this Law;
9) procedure for electing the Supervisory Board, the Board and the auditor, and their respective powers;
10) the powers of the general meeting, the procedure for calling the meetings and their voting rules;
3. If the conduct of business activities provided for in the Company's Articles of Association is regulated by other laws of the Republic of Lithuania, said laws must be complied with when drafting the Company's Articles of Association.
4. The Articles of Association of a Company must be signed by all incorporators and the signatures must be certified: in the case of natural persons - by a notary, in the case of legal persons, when the signature belongs to the head of the enterprise or to the authorised person - by a seal. The procedure established for natural persons shall apply to a legal person who does not posses a seal.
Article 8. Registration of the Articles of Association and the Company
1. Prior to offering their shares to the public for subscription or purchase, companies must register their Articles of Association according to the procedure established in the Law on the Register of Enterprises.
2. In the event that the general meeting amends or supplements the Company's Articles of Association, said amendments must be registered. Amendments to the Articles of Association shall be valid only upon their registration.
3. A Company must be registered in the Register of Enterprises of the Republic of Lithuania within 6 months of the day of conclusion of the incorporation agreement. If the Company is not registered within the prescribed time period, it shall be deemed not to have been incorporated and the contributions of persons to the Company's authorised capital must be returned within 15 days of the day of expiry of the period prescribed for the registration.
In the event of failure to register the Company through reasons not related to the activities of the Company's incorporators or shareholders, the incorporators may appeal the actions of the Registrar in court.
4. The Company shall be registered according to the procedure established by the Law on the Register of Enterprises after the shares have been subscribed for, initial installments have been collected and the statutory general meeting has been held. The sum of the collected initial installments must be no less than the amount of the minimum authorised capital as established in Article 2 of this Law, of which sum pecuniary contributions must constitute no less than 1/4.
5. The Company shall acquire the rights of legal person as of the day of its registration.
Article 9. Affiliate of a Company
1. A Company shall have the right to establish affiliates. Affiliates shall be established on the decision of the Company's Board. The number of affiliates of a Company shall not be limited.
2. An affiliate shall be a division of a Company possessing a separate registered office. An affiliate shall not be a legal person and shall use the name of the Company as a legal person. It shall operate in compliance with the Articles of Association of the Company and within the powers which are granted by the Board and which must be specified in the Company's Articles of Association.
3. The assets of the Company's affiliate shall be accounted in the Company's balance sheet and in a separate balance sheet of the affiliate.
4. Affiliates of a Company shall be registered in accordance with the procedure established in the Law on the Register of Enterprises.
Article 10. Reorganisation of a Company
1. Reorganisation is transformation of a Company as a legal person without the liquidation procedure. The successors to all the rights and liabilities of reorganised Companies shall be the Companies newly incorporated in the process of reorganisation and Companies continuing to operate after reorganisation as going concerns.
2. Companies may be reorganised in the following ways:
3. Reorganisation by merger or consolidation of companies shall be carried out by:
1) joining the companies (one or several) which cease their existence as separate legal entities to the Company which continues its business; or
4. Reorganisation of companies by way of Company division shall be carried out by:
1) parcelling out the Company which terminates its activities to other companies which continue their business;
5. When the type of a Company is being changed, it may be reorganised:
1) from a private Company into a public Company by registering its shares with the Securities Commission; or
6. Reorganisation by changing the status of the Company means cancelling the special purpose status of a Company by amending its Articles of Association.
7. The Companies under reorganisation must prepare a plan of reorganisation, which must state:
4) the criteria and rules for dividing the shareholders and shares of the Companies which are connected with the reorganisation among the Companies which will continue as going concerns after the reorganisation. If the shares are distributed for the Companies which will continue as going concerns after the reorganisation not in proportion to their authorised capital, the procedure providing each shareholder with the possibility to choose Companies in which they desire to hold shares must be established in the plan ; (Amended 20 December 1995)
5) the rate at which the shares held by shareholders shall be exchanged for new shares taking into account the difference in price; the number of new shares according to class and their par value;
6) the difference between the price of shares held by the shareholders and shares received by them after the reorganisation which shall be paid out to them in cash. The payment in cash may not exceed 10% of the par value of shares;
8) property and non-property rights of holders of shares and other securities after Company reorganisation and the terms of acquisition thereof;
9) the projected business indices of the Companies which will be going concerns after the reorganisation; and
8. The Board of each Company under reorganisation shall make a comprehensive written evaluation of the plan of reorganisation and shall also assign one or more experts to conduct an examination of the plan. The experts shall be entitled to obtain any related information from the Companies under reorganisation. Prior to the announcement of the general meeting, the experts shall submit to the Board the Examination Act which must contain findings concerning the valuation of property, the terms and conditions of loan extension and changes in the price of shares. During the reorganisation of the Company in the way specified in item 3 of Par. 2 hereof valuation of property in the reorganisaton plan and examination of the plan by experts shall not be required unless demanded by the shareholders by a simple majority vote. (Amended 20 December 1995)
9. Every Company must make a public announcement and notify each creditor in writing of its projected reorganisation no later than 30 days prior to the general meeting which has the consideration of issue of the Company reorganisation on its agenda. During the stated period every shareholder shall have the right to familiarise himself with the Company's plan of reorganisation, its evaluation, business indices of the Companies under reorganisation and the Examination Acts as well as to make copies thereof. (Amended 20 December 1995)
10. The resolution to reorganise a Company may be passed and the plan of reorganisation and the draft Articles of Association may be at the same time approved by shareholders with no less than 2/3 of votes of every class of shares. The approved reoganisation plan and the minutes of the general meeting which approved the plan must be delivered to the registrar of the register of enterprises no later than within 15 days from the day of the meeting which approved the plan. (Amended 20 December 1995)
11. A Company against which bankruptcy proceedings have been instituted or with respect to which out-of-court bankruptcy procedure is applied may be reorganised in accordance with the procedure established by the Law on Enterprise Bankruptcy of the Republic of Lithuania.
12. Public announcement shall be made of the Company's reorganisation no less than three times with an at least a 2-month interval between the announcements, or each shareholder and creditor shall be given a written notice thereof. The Company must provide additional guarantees to every creditor who requests them. (Amended 20 December 1995)
13. The Articles of Association of Companies which are going concerns after the reorganisation shall be registered after the first general meeting. The registration of the reorganised Companies shall be regulated by the Law on the Register of Enterprises of the Republic of Lithuania. For the registration of the Company or its articles of association after reorganisation the minutes of the general meeting which approved the reorganisation plan shall be presented instead of the incorporation agreement (Amended 20 December 1995)
Article 11. Liquidation of a Company
1. A Company may be liquidated on the following grounds:
2) the court or the creditors' meeting has passed a decision to liquidate a bankrupt Company. In this case the Company shall be liquidated in accordance with the procedure established by the Law on Enterprise Bankruptcy;
3) the court has passed a decision to liquidate the Company on the grounds of violations of law established by the laws of the Republic of Lithuania; and
2. The institution which decides to liquidate the Company must appoint its liquidator (administrator of a Company in liquidation). The managing bodies of the Company shall be divested, as of the day of the liquidator's appointment, of the powers to manage the Company. (Amended 20 December 1995)
3. The liquidator shall, in accordance with the procedure established by the Law on the Register of Enterprises, inform the Registrar who registered the Company of the alteration of the Company's status and shall furnish the Registrar with the information concerning the liquidator. After the Company acquires the status of a Company in liquidation, the words "in liquidation" shall precede its name.
4. A Company in liquidation may conclude only contracts which are related to its liquidation as well as those contracts which are provided for in the liquidation resolution.
5. The liquidation of a Company shall be announced publicly no less than three times at no shorter than 2-month intervals or each shareholder or creditor shall be personally notified thereof.
6. The distribution of the Company's assets to the shareholders may be carried out only upon the expiration of two months after the day of the third public announcement of the liquidation of the Company or of the personal notification of each shareholder and creditor.
7. In the event of disputes concerning the payment of the Company's debts, the assets of the Company may be distributed to the shareholders only after the dispute has been settled in court and settlements with the creditors have been effected. Disputes concerning the mortgaged assets of the Company shall be considered in accordance with the procedure established in the Law on Mortgage of the Republic of Lithuania.
8. After the payment of the required taxes into the budget and after the discharge of liabilities to the creditors and the employees, the remaining assets shall be distributed to the shareholders in proportion to the par value of the shares held by them by ownership right. Any contingent assets shall later be distributed in an analogous manner. If the shares of the Company carry different rights, said rights shall be taken into account during the distribution of assets.
Article 12. Powers of the Liquidator
1. The liquidator shall have the rights and obligations of the Company's Board. The liquidator shall represent the Company in liquidation in court, in its relations with the State power and government bodies, and with other natural and legal persons.
2. The liquidator of the Company shall:
1) make a stock-taking of material and financial valuables and draw up the act of receiving same, make up the accounts as of the beginning of the liquidation period (the liquidation balance sheet);
2) complete the discharge of the obligations under contracts concluded previously and draw up new contracts within their powers;
3. If the liquidation of the Company lasts for several years, within 3 months of the end of each business year the liquidator shall make up the annual accounts and the liquidation report. These documents shall be open for review to all the shareholders and the third persons with vested interests.
4. The liquidator shall be liable to the Company and the third persons for the losses incurred through his fault.
RIGHTS AND OBLIGATIONS
OF COMPANIES AND SHAREHOLDERS
Article 13. Company's Rights and Obligations
1. Every Company must have a name which must include the words "Public Company" (in Lithuanian - akcine bendrove or the acronym - AB) or "Private Company" (in Lithuanian - uzdara akcine bendrove or the acronym UAB). The name of an investment Company must include the words "Investment Company" (in Lithuanian - investicine akcine bendrove or the acronym IAB). The name of a Company must be in compliance with the regulations of names of enterprises, institutions and organisations approved by the Government. Disputes over the name of a Company shall be settled in court.
2. A Company may:
1) have accounts in banking institutions registered in the Republic of Lithuania and other states, its own seal which may be altered and used at the Company's discretion;
2) buy or acquire in other ways assets, or sell, lease, or mortgage its assets or dispose thereof in any other way;
3) buy or acquire in any other way and hold by ownership right, as well as issue, transfer, exchange, mortgage, or use in any way investment and credit securities. If the acquisition of shares and the exercise of the rights incidental to them reduces competition among Companies (enterprises) or competition in the appropriate field of business activities, the number of shares of the other Company which is acquired and held may be restricted in accordance with the procedure established by the Law on Competition of the Republic of Lithuania;
5) allocate funds for the purposes of charity, health care, culture, science, education, physical education and sport, as well as for relief in cases of natural calamities or other emergencies;
6) conclude contracts, assume obligations, lend and borrow money only in accordance with the procedure and under the terms and conditions established by Par. 3 of Article 12 of the Law on Enterprises of the Republic of Lithuania and the Law of the Republic of Lithuania on the Lending of Monetary Resources to Natural and Legal Persons; (Amended 20 December 1995)
7) charge prices, rates and tariffs for its products, services or other resources, with the exception of cases provided for in the laws of the Republic of Lithuania;
8) prepare and implement the systems of payment of pension supplements and benefits, as well as systems of incentives and privileges;
10) form associations, concerns or consortiums provided that this is in compliance with the Law on Competition.
Companies may also have other civil rights and obligations which are not established in this Law, provided that said rights and obligations are in compliance with the laws of the Republic of Lithuania.
3. If the Company acquires controlling interest in another Company, the latter shall become a controlled Company. Controlling interest shall consist of shares which give their holder more than 50% of votes at the general meeting. The controlled Company shall be a subsidiary, and the controlling Company shall be the holding Company. A subsidiary may not acquire shares in the holding Company.
4. A Company which fails to settle accounts with creditors within the prescribed time period and if its debt exceeds 5% of the Company’s authorised capital shall be prohibited from investing its property into another enterprise without a written consent of said creditors. (Amended 20 December 1995)
Article 14. Rights and Obligations of Shareholders
1. The property and non-property rights as well as the obligations of the shareholders shall be established by this Law and other laws of the Republic of Lithuania and by the Company's Articles of Association.
2. The shareholders shall have no other liabilities to the Company but the obligation to pay, in the established manner, the issue price of all the shares subscribed for. The resolution of the general meeting obliging all or some of the shareholders to make additional contributions shall be invalid if at least one of them does not agree with the resolution.
3. If a Company is being liquidated and lacks funds to discharge its liabilities, shareholders whose shares have not been fully paid up may be requested to pay up for their shares in the manner established by the Articles of Association or by the subscription agreement.
4. A share shall not be divisible into smaller parts. If a shares is held by several persons, all its holders shall be considered to be a single shareholder. The rights carried by the share shall be exercised by one of the holders by a general agreement certified by a notary. All the holders of a share shall be jointly liable for the shareholders' obligations.
Article 15. Property Rights of Shareholders
1. A shareholder shall have the following property rights:
3) to receive shares without payment if the authorised capital is increased with the funds of the Company;
4) to have a priority in acquiring newly issued shares unless the Company's Articles of Association provide otherwise;
6) to sell or transfer in any other way all or part of shares to the ownership of other persons; and
2. Shareholders shall have the right to request of the Company the repayment of their contributions in the cases provided for in Pars. 7 and 8 of Article 6, Par. 3 of Article 8, Par. 3 of Article 40 and Par. 4 of Article 42 of this Law.
Article 16. Non-property Rights of the Shareholders
1. Shareholders shall have the following non-property rights:
1) to attend the meetings of shareholders as voting members, unless this Law or the Articles of Association provide otherwise;
2. If all the voting shares of the Company are of the same par value, each share shall carry one vote at the meetings of shareholders.
3. The Articles of Association of the Company may provide for a rule according to which some types of shares do not carry the right to vote. The institutions of state power and government shall be prohibited from acquiring non-voting Company shares. (Amended 22 February 1995)
4. A shareholder shall have no right to take part in the voting at the general meeting on issues specified in Par. 7 of Article 3 or in item 9 of Par. 3 of Article 18, in the settlement whereof the shareholder is directly interested.
5. If the voting shares are of different par value, one share of the smallest par value shall give its holder one vote. The number of votes given by other shares shall be equal to their par value divided by the smallest par value. The Articles of Association of the Company may prescribe for other rules on the establishment of the number of votes, but the number of votes given by a share must be proportionate to its par value.(Amended 20 December 1995)
6. Shares shall give their holders, according to the procedure set in Par. 3 of Article 41 of this Law, voting rights at the general meeting held prior to the expiry of the term set for the payment of the first issue of shares as specified in the subscription agreement; thereafter voting rights shall be carried only by fully paid up shares. (Amended 20 December 1995)
7. At the request of a shareholder the Company must present to him for inspection or copying the annual and intermediate accounts, the reports of the Board on the activities of the Company, the minutes of the meetings, and the share register. Other documents of the Company must be presented for the shareholder's inspection if they do not contain official secrets, the divulgence whereof would cause the Company material losses. Denial of information for any other reason shall be prohibited. At the shareholder's request, the refusal to present the requested papers for inspection must be presented in writing. Disputes over the shareholder's right to information shall be settled in court.
8. Shareholders the total par value of whose holdings amounts no less than 1/10 of the authorised capital shall have the right to appoint an expert (a group of experts) to inspect the Company's activities and accounting papers. The inspection expenses shall be covered by the shareholders who appointed the experts. If the expert (the group of experts) proves that the facts stated in the shareholders' application are true, the Company must refund the inspection expenses.
Article 17. Proxies
1. A shareholder shall have the right to authorise another person to vote for him as his proxy at the general meeting or perform other legal acts. The authorisation of the shareholder-natural person must be certified by a notary, whereas the authorisation of the shareholder-legal person or of an enterprise must be certified by the manager's signature and a seal. The auditor of the Company the shares whereof are held by the person who is appointing a proxy may not act as proxy.
2. The proxy to represent a shareholder at the meeting must be presented to the person who is responsible for the registration of the participants in the meeting; the person shall record in the list of registration the name of the person who certified the proxy and the date when it was certified as well as its number and term of validity.
MANAGEMENT OF THE COMPANY
Article 18. Managing Bodies
1. The managing bodies of a Company shall include the general meeting, the Supervisory Board, the Board, and the Administration.
2. On the resolution of the general meeting a public Company shall not form either the Supervisory Board or the Board. In the event that only the Board is formed, it shall be formed pursuant to the procedure established for the formation of the Supervisory Board in Par.s 2, 3, and 5 of Article 24 of this Law. (Amended 20 December 1995)
3. On the resolution of the general meeting, a private Company may refrain from forming either the Supervisory Board or the Board. In the event that either one or both of these managing bodies are not formed, its (their) functions, rights and responsibility shall be delegated to other managing bodies. If the Supervisory Board and the Board are not formed, the head of the Administration of a private Company shall be elected by the general meeting. If only the Board is formed, it shall be formed in accordance with the Supervisory Board formation procedure set forth in Par.s 2, 3, and 5 of Article 24. (Amended 20 December 1995)
4. If any of the Company's managing bodies is not formed, the division of functions, rights and responsibility among the other managing bodies must be specified in the Company's Articles of Association.(Amended 20 December 1995)
Article 19. General Meeting
1. The supreme managing body of a Company shall be the general meeting. All the shareholders of the Company irrespective of the number and class of shares they hold shall have the right to attend the Company's general meeting. Members of the Board and the Supervisory Board as well as the head of the Administration, even if they are not shareholders, may also attend the general meeting without the right to vote.
2. The shareholders of a public Company whose securities accounts are operated by stockbroking firms may attend the general meetings presenting abstracts of their securities accounts concerning shares held by them.
3. Only the general meeting shall have the right to:
2) elect the auditor, inspector, members of the Supervisory Board, in the event that the Supervisory Board is not formed - members of the Board, and if neither the Supervisory Board nor the Board is formed - elect the head of the Administration; (Amended 20 December 1995)
3) remove from office members of the Supervisory Board and the Board, the inspector (auditor), and the head of the Administration who have been elected by the general meeting; (Amended 20 December 1995)
4) fix the salary of the inspector and the conditions of payment of auditor’s fees, the annual payments from the net profit to the members of the Board and the Supervisory Board taking into account the provisions of Par. 4 of Article 47 and Article 48 of this Law; (Amended 20 December 1995)
8) appoint an expert (a group of experts) for the inspection of the incorporation of the Company and management of its affairs;
4. The shareholders (or their proxies) attending the general meeting shall be registered by signing in the registration list. The registration list must indicate the number of votes possessed by each shareholder. The list shall be signed by the chairman and secretary of the meeting.
5. The minutes of the general meeting shall be signed by the chairman, secretary and at least one shareholder authorised to do so by the meeting. The list of the participants in the general meeting and ballot-papers of shareholders who voted in advance in writing shall be appended to the minutes.
Article 20. Quorum of the General Meeting and Adoption of Resolutions
1. The general meeting may adopt resolutions if the attending shareholders have more than 1/2 of the total number of votes. If the meeting does not have a quorum, a repeat meeting must be called within 15 days which meeting shall have the right to adopt resolutions on all the items of the agenda irrespective of the number of shareholders present. If the consent of shareholders holding shares of a certain class is necessary for the adoption of a resolution, the decision on the consent may be adopted by the meeting of the shareholders of the respective class, provided that the meeting is attended by shareholders who hold more than a half of the shares of said class. The procedure for calling a general meeting shall be valid for convening the repeat meeting.
2. Upon familiarising themselves with the agenda and the draft resolution, shareholders who are entitled to vote at the general meeting may inform the meeting in writing of their vote "for" or "against" in respect of each individual resolution. Such communications shall be included in the quorum of the meeting and added to the voting results only provided that the issue has been put to the written vote. (Amended 20 December 1995)
3. Voting at the general meeting shall be open. Secret voting shall be mandatory on the issues on which at least one shareholder requests a secret vote to be taken, provided that he is supported by at least 2 shareholders.
4. The resolutions of the meeting shall be adopted by a simple majority vote of the shareholders present, with the exception of cases where resolutions require an at least 2/3 vote of those present: resolutions on issues specified in Par. 10 of Article 10, items 1, 5, 6, 7, 9 of Par. 3 of Article 19, Par. 7 of Article 27, Par. 3 of Article 31, and item 6 of Par. 1 of Article 48 of this Law. (Amended 24 September 1996)
Article 21. Calling a General Meeting
1. A general meeting shall be organised by the Board. The right of initiative to call a meeting shall be vested in the Supervisory Board, the Board, and the shareholders the par value of whose shares is no less than 1/10 of the authorised capital, unless the Articles of Association provide for a smaller portion of the authorised capital.
2. The Board must call a regular annual general meeting within 3 months of the end of the business year.
3. An extraordinary meeting must be called if:
1) the amounts payable by the Company and its liabilities are in excess of 1/2 of its ownership capital; (Amended 20 December 1995)
3) the Company is announced or announces itself to be not in the position to satisfy its financial liabilities; or
4. The persons who are demanding that a general meeting be called shall submit an application to the Board indicating the reasons and objectives for calling a meeting, a draft agenda, and proposals as to the time and place of the meeting. If the Board fails to come to an agreement with the persons initiating the meeting on settling otherwise the issues proposed on the agenda, it must announce about the calling of the general meeting within 10 days of the submission of the application
5. A general meeting may be called on a court decision if:
1) a meeting has not been called within 3 months of the end of the business year and a shareholder has brought the matter to court;
2) the persons who initiated the meeting refer the matter to court after failing to get a favourable decision from the Board in accordance with the procedure established by Par. 4 hereof; and
6. The Board must notify about the general meeting according to the procedure established by the Articles of Association no later than 30 prior to the day of the meeting. If a repeat meeting is called, the shareholders must be informed thereof no later than 10 days before the meeting. A general meeting may be called without observing the above requirements provided that all the shareholders entitled to vote or their proxies give their consent thereto.
7. The notice about the general meeting must state:
8. The shareholders must have a possibility for reviewing the documents related to the agenda of the meeting no later than 7 days before the meeting .
Article 22. Agenda of the General Meeting
1. The draft agenda of the general meeting may be revised. In the event that the agenda of the meeting referred to in the notice on the calling of the meeting is revised, the shareholders must be informed of the changes in the agenda in the same manner in which notice of the general meeting is given and no later than 10 days prior to the meeting.
2. The meeting shall have no right to adopt resolutions on issues which are not on the agenda if not all shareholders who have the voting right attend the meeting.
3 Shareholders the par value of whose shares is no less than 1/20 of the authorised capital, shall be entitled to request the inclusion of additional items of business in the agenda. This group of shareholders shall also have the right to nominate candidates for the Supervisory Board or the Board, and a candidate for the auditor's post. The Articles of Association may provide for a smaller par value of the shares which gives the shareholders this right.
4. Only the agenda of a meeting which failed to take place shall be valid at the repeat meeting.
Article 23. Invalidity of the Resolutions of a General Meeting
1. On the declaration of the shareholders, the members of the Board, the Supervisory Board, and the head of the Administration, the resolutions of a general meeting may be declared invalid by court if:
1) the issue on which the resolution is adopted has not been included in the agenda of the meeting in accordance with the procedure established by law;
2) the registration documents and data changed by the resolution adopted by the meeting have not been registered in the Register of Enterprises of the Republic of Lithuania in the cases and within the period prescribed by laws; (Amended 20 December 1995)
3) the procedure of calling a meeting or adopting the agenda, prescribed by Articles 21 and 22 of this Law, has been violated; and
2. A resolution of the general meeting may be appealed in court no later than within 30 days of the day when the person learned or should have learned about its adoption.
Article 24. Formation of the Supervisory Board
1. The number of members of the Supervisory Board shall be prescribed by the Articles of Association of a Company; the number must be no less than 3 and no more than 15.
2. The Supervisory Board shall be elected by the general meeting. During the election of the Supervisory Board each shareholder shall have the number of votes which is equal to the number of votes carried by the shares held by him as established pursuant to Article 16 of this Law multiplied by the number of members of the Supervisory Board. The shareholder shall distribute the votes at his discretion, giving them for one or several candidates. Candidates who receive the greatest number of votes shall be elected.
3. The Supervisory Board shall be elected for the term not exceeding 4 years. A member of the Supervisory Board may be released from his duties or re-elected for another term of office. The term of office of the Supervisory Board shall commence with the closing of the meeting at which it was elected. The Chairman of the Supervisory Board shall be elected by the members of the Supervisory Board. (Amended 20 December 1995)
4. Only legally capable natural persons may serve as members of the Supervisory Board. Each candidate for the Supervisory Board must inform the shareholders where he is employed and what post he holds. A person who is a member of the Board, head of the Administration of the Company, or a person who, pursuant to the laws of the Republic of Lithuania, has no right to perform these duties may not be a member of the Supervisory Board.
5. The general meeting shall have the right to remove from office the entire Supervisory Board in corpore or its individual members. If, during the removal from office, at least one shareholder votes against the removal of individual members, the entire Supervisory Board must be re-elected upon the removal of a member. (Amended 20 December 1995)
6. The Supervisory Board shall have the right to appoint its own member to serve on the Board for a term not exceeding 6 months. If the same member of the Supervisory Board is appointed to temporarily serve on the Board, the overall duration of his service on the Board may not exceed 12 months in 4 successive years. While serving on the Board, a member of the Supervisory Board may not perform the duties of a member of the Supervisory Board.
7. The Supervisory Board shall have no right to delegate or transfer its functions to other persons or the managing bodies of the Company.
8. A member of the Supervisory Board may resign from his office prior to the expiry of his term upon giving a written notice thereof to the Supervisory Board at least 14 calendar days in advance.
9. The general meeting may remunerate (make quarterly payments to) members of the Supervisory Board for their work only out of the net profit, taking into account the provisions of Par. 4 of Article 47 and Article 48 of this Law. (Amended 20 December 1995)
Article 25. Powers of the Supervisory Board
1. The Supervisory Board shall:
2) at the request of the Board decide on the issue concerning the termination of the employment contract with a member of the Supervisory Board employed in the Company;
3) analyse the work of the Board, the utilisation of financial resources, the organisation of production and management, the profitability of capital, remuneration for work, the correctness of depreciation deductions, the prospects of financial position;
5) make proposals and comments to the general meeting on the annual accounts of the Company, the draft of the profit distribution, and the report of the Board to the general meeting;
6) represent the Company in court proceedings when disputes between the Company and its Board, or a member of the Board, or the head of the Administration or the Company agent are examined;
7) submit proposals to the Board to revoke the resolutions adopted by it if they are not in compliance with the laws of the Republic of Lithuania or the Articles of Association of the Company; and
2. The Supervisory Board shall have the right to appoint an expert (or group of experts) or ask a government financial institution to check and assess the Company's accounting. The Articles of Association of the Company may specify a sum of money which may be paid to experts in remuneration for their work.
3. At the request of the Supervisory Board the Administration of the Company and the Board must present documents concerning the activities of the Company and create conditions for inspecting the Company's assets. Members of the Supervisory Board must preserve the confidentiality of the Company's secrets divulged to them in the course of their duties.
4. Members of the Supervisory Board shall have equal rights. During voting each member shall have one vote. In the event of a tie vote the chairman's vote shall be decisive.
5. If a member of the Supervisory Board is unable to attend a meeting, he may take a written vote "for" or "against" the resolution which is being voted on provided that he has familiarised himself with the draft resolution.
6. If the meeting of the Supervisory Board is attended by more than half of its members, the meeting may adopt resolutions by a simple majority vote of those present, with the exception of resolutions on removing from office members of the Board. In this case resolutions shall be adopted by a 2/3 vote of those present.
7. The Supervisory Board must meet at least once quarterly. Its regular meetings shall be called following the schedule by the chairman of the Supervisory Board or, in his absence, by the vice chairman. They shall call extraordinary meetings at the request of no less than 1/3 of the members of the Supervisory Board. The procedure for calling meetings shall be established in the work regulations of the Supervisory Board.
8. Members of the Supervisory Board shall be liable in the manner established by law for concealing violations of the Company's business activities, inadequate control of business activities, if that provided conditions for the Board or the Administration to evade laws of the Republic of Lithuania or the Articles of Association of the Company.
Article 26. Formation of the Board
1. The number of the Board members, which may not be less than 3, shall be established by the Articles of Association of the Company. The Board shall be a collegiate body whose activities are directed by its chairman.
2. Only legally capable natural persons may be appointed or elected as members of the Board. Each candidate for the Board members must notify the Supervisory Board of his place of employment and duties. The following persons may not be appointed or elected as members of the Board:
1) members of the Supervisory Board of the same Company or its holding Company registered in the Republic of Lithuania, with the exception of the case provided for in Par. 6 of Article 24 of this Law; (Amended 20 December 1995) and
3. The Board and its chairman shall be appointed by the Supervisory Board for a term not exceeding 4 years; in its absence, the Board members shall be elected by the general meeting. There is no limitation on the number of terms of office a member of the Board may serve. (Amended 20 December 1995)
4. By notifying the Board in writing at least 14 calendar days in advance, a member of the Board may resign from his post before the expiry of his term of office.
5. The general meeting may remunerate (pay quarterly payments to) members of the Board for their work on the Board only out of the net profit, taking into account the provisions of Par. 4 of Article 47 and Article 48 of this Law. The members of the Board shall receive a salary if they have entered into an employment contract with the Company. (Amended 20 December 1995)
Article 27. Powers and Liabilities of the Board
1. The procedure of work of the Board shall be established in the work regulations adopted by the Board. The Board may represent the Company in court, arbitration bodies and other institutions. The powers of the Board and its members shall be established by the Articles of Association of the Company.
2. The Board shall consider and approve:
2) posts in which persons are employed only by holding competitions as well as candidates for said posts;
3) the candidates for the post of the head of Administration, his deputies (directors) and their respective salaries; and
3. The Board shall analyse and approve the material submitted by the Administration and the inspector (auditor) on:
1) the strategy of production, technical, research, design and experimental work as well as other business activities;
5) quarterly and annual results of business activities, the Company's draft accounts, income and expenditure estimates, draft of the distribution of profit, stock-taking data and other records of valuables; and
4. The Board must timely hold general meetings, draw up their agenda, present to the shareholders the Company's annual accounts, the draft of the distribution of profit, report on the activities of the Company and other required information for considering the items on the agenda.
5. The Board must invite the head of the Company's Administration to every meeting and to provide him with possibilities to familiarise himself with the information concerning the items on the agenda.
6. The Board shall be prohibited from restricting the auditor's powers or from interfering with his work in any other way.
7. A resolution of the general meeting adopted by an at least 2/3 vote of those present shall be required for the decisions of the Board concerning the sale, transfer, lease or mortgage of or pledge or guarantee of the fulfillment of other entities’ liabilities by a portion of the Company's long-term assets amounting to more than 1/20 of value of the Company's authorised capital. The total value per business year of such transactions concluded without the consent of the general meeting may not exceed 1/20 of the company's authorised capital value (Amended 24 September 1996)
8. The chairman and members of the Board must be jointly compensate for the losses incurred by the Company by reason of the resolutions of the Board adopted in violation of the Company's Articles of Association, this Law and other laws of the Republic of Lithuania. Exempted from the obligation to compensate for the losses shall be persons who voted against the resolution or did not attend the meeting at which the resolution was adopted, provided that they present a written protest to the presiding officer within 7 days after they learnt or ought to have learnt about the resolution. The resignation of a member of the Board or his removal from office shall not exempt him from the obligation to compensate for the losses incurred through his fault. A member of the Board may be exempted from the obligation to compensate for the losses inflicted by him through the performance of his duties provided that he acted on the basis of the Company documents and other information the accuracy whereof gave no grounds for doubt, or if he acted within the extent of normal production or business risks. Disputes concerning the compensation of losses shall be settled in court.
9. If the rights of the shareholders provided for in this Law and in the Company's Articles of Association were enforced by instituting legal proceedings, the members of the Board shall jointly refund the legal expenses and compensate for the damages incurred by the shareholders because of the disregard of their rights.
10. The right of initiative to call a meeting of the Board shall be vested in the chairman of the Board as well as in other members provided that more than half of the Board members approve thereof. A meeting of the Board shall be valid if attended by more than half of the members and the adopted decisions shall be valid if voted in favour of by at least half of the Board members. The members of the Board shall have equal voting rights. In the event of a tie vote, the chairman of the Board shall have the casting vote. A member of the Board shall have no right to vote when the Board meeting is deciding the issues relative to his material responsibility or his personal work in the Company. (Amended 20 December 1995)
12. The Board shall perform its functions until the expiry of the term established by the Articles of Association or until a new Board is appointed or elected and commences its work.
Article 28. The Company Inspector and Auditor
1. The Company’s accounting and financial statements must be inspected and audited upon the expiry of the business year and prior to the general meeting. The inspection or audit shall be performed by the inspector or the auditor. The inspector’s or auditor's post may be held by a legally capable natural person, possessing a qualifications certificate, or an enterprise which provides accounting or auditing services. The inspector (auditor) shall be elected by the general meeting for a term specified in the Articles of Association but not exceeding 4 years. An employee of the Company, or a member of the Supervisory Board or the Board, or a shareholder who holds more than 10% of shares in the Company may not be elected inspector (auditor). (Amended 20 December 1995)
2. The inspector shall control the Company's financial activities. The inspector’s procedure of work shall be established by his work regulations approved by the general meeting.
3. The inspector must:
1) inspect the annual financial statements of the Company and other books and records of the Company;
2) perform any inspections of the Company on the instruction of the general meeting or the Supervisory Board or the Board; and
5. The Administration and the Board of the Company must present the inspector (auditor) with the books and records requested by him. (Amended 20 December 1995)
6. For his work the Company shall pay the inspector (auditor) a salary. The amount of the salary and the conditions of payment thereof shall be determined by the general meeting. (Amended 20 December 1995)
7. The inspector must keep the Company's secrets learnt by him in the course of inspection confidential.
8. The inspector of the Company shall be liable under law for unsatisfactory control of the Company's activities and concealment of deficiencies in its activities.
9. The audit shall be performed in accordance with the legal acts regulating the audit and the work of auditors as well as the terms of contract between the Company and the auditor. (Amended 20 December 1995)
Article 29. Administration
1. Business activities of the Company shall be organised and executed by the administration. The regulations of the Administration's work shall be approved by the Board.
2. Administration shall work in compliance with the laws of the Republic of Lithuania, Articles of Association, work regulations, regulations of the divisions and the staff, resolutions of the Board and decisions of the head of the Administration.
3. The Company must have head of Administration and chief financier (accountant). Head of the Administration may not concurrently occupy the post of the chief financier (accountant).
4. The activities of the Administration shall be managed by head of the Administration (President, General Director, Director).
5. Head of the Administration shall be appointed by the Board of the Company. The Board may organise a competition for the selection of head of the Administration.
6. Remuneration of head of the Administration shall be established by the Board in the employment contract. Remuneration of head of the Administration, who is a member of the Board shall be established by the Supervisory Board. Remuneration shall consist of two parts -- fixed salary and bonus paid for operation results of the Company.
7. A person who becomes prohibited by the laws of the Republic of Lithuania from being head of Administration may not be appointed to such post. Head of the Administration may not be the manager or auditor of another enterprise. In the event he holds such a post, he must resign from it within one month after the appointment.
8. The Board of the Company may terminate the employment contract with the head of Administration according to the procedure established by the Law on Employment Contract of the Republic of Lithuania and prior to the termination of the contract, it may limit his/her powers.
9. Chief financier (accountant) shall be appointed, his/ her remuneration shall be fixed and employment contract shall be concluded by the Board of the Company. Other officers of the Administration shall be employed and employment contract shall be concluded by head of the Administration.
10. Head of the Administration shall have the right to enter into transactions of the Company in accordance with the Articles of Association, resolutions of the Board and work regulations. Articles of Association and work regulations may establish spheres of activities wherein deputy head of the Administration or other authorised persons shall have the right to act independently and to enter into Company's transactions. Head of the Administration shall participate in the meetings of the Company without the right to vote.
11. Transactions concluded by head of the Administration or his/her deputies may be declared null and void according to the procedure established by the Civil Code of the Republic of Lithuania.
CAPITAL OF THE COMPANY
Article 30. Capital Structure
1. A Company's capital shall consist of its ownership capital and borrowed capital. The ownership capital shall be formed out the share issue price and the profit of the Company. Borrowed capital shall be formed by offering issued debentures, taking loans and by borrowing funds in any other way. (Amended 20 December 1995)
2. The Company's ownership capital shall consist of:
3. The Company's net assets may not be less than the authorised capital. The authorised capital registered according to the procedure established by laws shall be considered as the amount of the authorised capital. If the Company's net assets become less than the authorised capital, the Board must rectify the situation by taking measures within its powers or call an extraordinary general meeting to consider the decrease of the authorised capital.
Article 31. Reserves and their Composition
1. Revaluation reserve - the amount of increase in the value of long-term material and financial assets obtained upon the asset revaluation. The revaluation reserve shall be reduced when revalued assets are sold or written off. Losses may not be reduced by means of revaluation reserve. Revaluation reserve may be applied to increase the authorised capital in accordance with the procedure established by Article 42.
2. Compulsory reserve shall be formed out of deductions from net profit in accordance with the procedure established by Par. 5 of Article 48 and shall be used to cover the losses. In case of reduction of the authorised capital the compulsory reserve may be reduced retaining the ratio specified in Par. 5 of Article 48 of this Law. The difference in the amount of the compulsory reserve during the decrease of the authorised capital shall be attributed to the profit or loss of the current year to be appropriated.
3. Other reserves shall consist of the reserves not available for distribution and reserves available for distribution. Reserves not available for distribution shall be formed in accordance with the procedure established by law and the Company’s Articles of Association for specific purposes by transferring a share of net profit of the accounting period. Reserves not available for distribution shall be formed, reduced and abolished by resolution of the general meeting by at least 2/3 majority vote. Reducing or abolishing reserves not available for distribution the authorised capital shall be increased by the amount and the par value of shares shall be increased in proportion to the par value of shares held by the shareholders or new shares shall be issued.
Reserves available for distribution shall be formed and used only in accordance with the procedure established by the Company’s Articles of Association. The authorised capital may be increased out of these reserves, at the same time increasing proportionately the par value of shares held by the shareholders or issuing new shares.
4. The reserves provided for by Par. 3 hereof shall be formed only upon forming the compulsory reserve established by Par. 2 hereof. (Amended 20 December 1995)
Article 32. Shares
1.Shares are the financial securities of investments evidencing the participation of their holders in the Company's capital and entitling them to property and non-proprietary rights. Shares may be represented by certificates (documents printed in compliance with the requirements established for securities) or uncertificated ( represented by records in securities accounts). A private company may use certificates.
2. The par value of a share must be quoted in litas (without indicating centas). The issue price of a share may not be less than its par value.
3. Shares are classified into the following classes:
4. The shares of a private company may be only registered and they may be transferred according to the procedure established by the Articles of Association. These shares shall not be registered with the Securities Commission. The issue of shares of public companies must be registered with the Securities Commission.
5. Uncertificated shares shall be represented by records in securities accounts which are either operated by the issuer or stock broking firm in the name of shareholders. Each shareholder of a public company shall have the right to choose where to keep securities account -- in the public company the shares of which he/she holds or in the stock broking firm. The provisions of Par. 2, 5 and 6 of Article 39 shall not apply to uncertificated shares.
6. Records in securities accounts shall evidence the ownership of uncertificated shares. Transfer of uncertificated shares shall be debited to the securities account of the transferor and credited to the securities account of the transferee. Upon entering into contract concerning the transfer of shares, parties to the contract must present said contract to their agents who operate their securities accounts, which must state information specified in items 2-5 of Par. 8 hereof.
7. The Company or a stock broking firm in which securities account of a shareholder is opened, must issue upon the request of a shareholder statement of account indicating the number of shares and other information relative to the shares recorded in the account.
8. A share represented by a certificate must specify:
8) signature of the chairman of the Board and the chairman of the Supervisory Board or the facsimiles of their signatures.
Information that must be provided in securities accounts relative to uncertificated shares shall be established by standard acts regulating the securities and their circulation accounting. The certificate may be issued for any number of shares, indicating the share numbers. (Amended 20 December 1995)
9. Shares of one class are classified according to the rights that they carry. The rights carried by different classes of shares must be specified in the Articles of Association of a Company. The par value of all shares of one class must be identical. (Amended 20 December 1995)
10. Shares may be issued after the registration of the Company or after the increase of its authorised capital, and after they have been fully paid for at an issue price.
11. A Company shall be prohibited from issuing shares which may be exchanged for debentures. Convertible debentures (which may be exchanged for shares) may be issued only in the case specified in Par. 3 of Article 43 hereof. It shall be prohibited to issue shares of the type other than prescribed by this Law. (Amended 20 December 1995)
12.The circulation of the shares of a Company in liquidation shall be allowed up to the expiration of the term fixed for the settling of accounts with the shareholders.
Article 33. Partly Paid Shares
1. A person who has subscribed for shares shall have no right to transfer his shares to other persons prior to the registration of the Company or prior to the increase of its authorised capital and until the shares have been fully paid for.
2. Upon the registration of a Company or the increase of its authorised capital, persons who have subscribed for shares and have paid the initial installments shall be issued provisional certificates of a shareholder, except in cases specified in Par. 3 hereof. Provisional certificate of a shareholder is a term investment security with all the requisites of registered shares and may not be offered to the public. This certificate shall specify the sum of money paid for the subscribed shares and the date of the expiration of its validity. The Board shall have the right to extend the term of validity of provisional shareholders' certificates. Upon payment of the full issue price, the provisional shareholders certificates must be replaced by certificated shares or adequate records must be made in securities accounts. (Amended 20 December 1995)
3. Records in the securities accounts of shareholders, representing partly paid uncertificated shares shall state the amount paid thereon, the amount to be paid therefor and the expiration of the due date of payment. These statements shall also be indicated in the statement of securities account of a shareholder issued to him.
1.The owner (shareholder) of a certificate representing registered share shall be a natural or legal person whose name shall be indicated on the share and in the share register of the Company. The share register must state the following information about the shareholder: full name of a person or company, address ( registered office) the number of shares held and the par value thereof. (Amended 20 December 1995)
2. Registered certificated shares shall be transferred to other persons by making a relevant record - endorsement on the share (certificate). As to the form of endorsement and the identification of the owner of registered shares, provisions set forth in Articles 12, 13 and 16 of the Law on the Bills of Exchange of the Republic of Lithuania shall apply.
3. The owner of an uncertificated registered share is a natural or legal person in whose name the securities account has been opened. Registered shares of a shareholder shall be recorded in this account.
4. Public companies shall have the right, according to the procedure established by standard acts regulating the securities and their circulation, to get information from stock broking firms about registered shares of that company, recorded in the securities accounts operated by them, share register and other information relative thereto.
5. The owner of a bearer share is a natural or legal person in whose name securities account has been opened. In this account, bearer shares of a shareholder are recorded. Public companies shall have no right to demand from stock broking firms to disclose the owners of bearer shares and other information relative thereto.
6. Registered shares of a public company may be exchanged for bearer shares or vice versa, if the general meeting so decides by at least 2/3 of votes and if it has amended the Articles of Association accordingly.
7. The Articles of Association of a private company may provide that the holder of its shares may sell or otherwise transfer his/her shares to the ownership of another person only with the consent of the Board. Transfer may be rejected only if the transfer of a portion of shares would increase the number of shareholders by more than it is established by Par. 4 of Article 2 hereof. The shareholder must be notified about the consent or rejection within 15 days from the receipt of his application. Public companies shall be prohibited from restricting the right of shareholders to sell or otherwise transfer their shares into the ownership of another person provided it is done according to the procedure established by this Law.
Article 35. Ordinary and Preference Shares
1.Ordinary shares constitute the main portion of a Company's shares. The par value of the preference shares may not exceed 1/3 of the authorised capital.
2. The holders of ordinary shares shall be entitled to dividend and a portion of assets of a Company in the event of a Company's liquidation only after the claims of the holders of preference shares have been satisfied. The holders of ordinary shares shall have the right to acquire new shares which are issued when the authorised capital is increased out of the retained profit. If the authorised capital is increased out of the share premium, the holders of both preference and ordinary shares shall have equal rights to acquire new shares.(Amended 20 December 1995)
3.It shall be prohibited to fix in the Articles of Association of the Company or in the subscription agreement the rate of dividend to which the holders of ordinary shares are entitled.
4.The property and non-propriatory rights incident to preference shares, as well as the procedure for changing the rights must be established prior to their sale and must be set forth in the Articles of Association of a Company. The amount of dividend shall be established as a percentage of the par value of the share. (Amended 20 December 1995)
5. If the profit is not sufficient for the payment of dividends specified on the preference shares, all the preference shares with different dividend rates shall receive dividends of a proportionately smaller amount.
6.Dividends on preference shares may be cumulative or non-cumulative. This must be established in the Articles of Association prior to the sale of shares.
7.The holder of cumulative preference shares shall be guaranteed the right to the rate of dividend specified on the shares. If the profit is not sufficient for the payment of all dividend, the unpaid sum must be transferred to the following business year.
8. The unpaid dividend or part of unpaid dividend on non-cumulative preference shares may not be transferred to the following business year.
9.Before exchanging (converting) cumulative preference shares for ordinary shares, the Company must settle accounts with the holders of preference shares or oblige itself to pay the debt in the following business year.
10. The Articles of Association may establish that the preference shareholders have no voting rights. If in two consecutive business years the Company fails to pay the full amount of dividend to the holders of cumulative preference shares without voting rights, such shareholders shall acquire the right to vote. The shareholders shall retain this right until the end of the business year in which the full amount of their dividend has been paid to them.
Article 36. Employee Shares
1. The employee shares shall be registered shares sold on preferential terms or otherwise transferred to the employees of the Company. Such shares may be issued only after all shares subscribed for at the moment of incorporation have been fully paid for.
2. The sphere of circulation of employee shares may be restricted by the Articles of Association of the Company, but the restriction may not cover a period longer than three years after the day of the issue of shares. It must also be established that the holder of an employee share has no right to transfer in any way the shares to another person who has no right to acquire such shares. Upon the expiration of the term of this restriction, the share shall lose the status of an employee share.
3. The issue price of an employee share may be below its par value, if the difference is covered out of the deductions made from the employee's wages, which at his request are accumulated in a special fund. It shall be prohibited to compel an employee to buy the Company's shares and to make deductions from his wages for the payment for shares for which he has not subscribed.
Article 37. Shares of Agricultural Producers
1. Shares of agricultural producers shall be the shares sold on preferential terms in accordance with the procedure established by the Government of the Republic of Lithuania which have been acquired by agricultural producers (suppliers of raw materials or users of services), as well as their cooperative societies (cooperatives). These shares shall be ordinary registered shares.
2. The shares purchased in accordance with the above procedure shall acquire the status of agricultural producers’ shares as from the day of their purchase, except in cases when such shares were by 21 July 1994 sold or otherwise transferred to persons who are not agricultural producers.
3. The sphere of circulation of agricultural producers' shares shall be restricted. The holders of the above shares shall have the right to sell or otherwise transfer them only to agricultural producers and their cooperative societies (cooperatives) in accordance with the procedure established by the Government of the Republic of Lithuania The status of agricultural producers' shares may not be changed. (Amended 20 December 1995)
Article 38. Debentures
1. A debenture of a public company is a term credit security giving its holder the right to receive annual interest as well as other rights specified on the debenture or in the resolution to issue debentures. On maturity, debenture shall give its holder the right to receive the sum of money from a public company equal to the par value of a debenture. Annual interest shall not be paid to the holder of a debenture provided that this is stated on the debenture (in the resolution to issue debentures). Debentures may be uncertificated, in which case they shall be represented by records in the securities accounts of their holders. Accounting of debentures and their circulation shall be carried out according to the provisions set forth in Par.5-8 of Article 32 and Par.2 and 4 of Article 34 hereof. (Amended 20 December 1995)
2. Public companies the authorised capital of which is not fully paid up shall be prohibited from issuing debentures, except in the case when they are offered exclusively to the employees and shareholders of these companies. The par value of debentures issued by a public company may not exceed fully paid up authorised capital and when there are guarantees of the third party -- may not exceed the sum of the fully paid up authorised capital and the amount of the guarantees.
3.The resolution to issue debentures may be adopted by a general meeting by a simple majority vote, or by the Board if this is provided by the Articles of Association.
4. A public company must redeem its debentures by the date specified in the Articles of Association. Debenture holders shall have equal rights with the other creditors of a public company.
5. Private companies shall be prohibited from issuing debentures.
Article 39. Invalidity of Securities Issued by a Company
1. Shares and provisional shareholders' certificates shall be invalid if:
2) they were issued prior to the registration of the Company or the increase of its authorised capital;
3) they were issued by public companies without the registration of issue of shares with the Securities Commission or their registration has been revoked; and
2. If a Company has changed its name, exchanged one type of shares for the other type of shares, reduced the par value of its shares or the rights of preference shareholders, it must, within 4 months, exchange the shares held by the shareholders and the provisional shareholders' certificates or make adequate notes on them. If within 3 months after public announcement or written notice the shareholders fail to present their shares or provisional shareholders' certificates to the Board of the Company, provisional shareholders' certificates shall become invalid and the shares shall be deposited.
4. The invalidity of shares shall not cause the reduction of the authorised capital of the Company, unless a general meeting decides otherwise.
5.If the security issued by a Company is damaged and not suitable for circulation but is identifiable, at the holder's request the Company must replace it. Expenses incurred thereby must be covered by the holders of such securities.
6. Lost or destroyed securities shall be replaced by the Company according to the procedure established by the laws of the Republic of Lithuania.
Article 40. Subscription for Shares
1.Subscription for shares is an agreement between the Company and a natural or legal person by which one party binds itself to allot a certain number of new shares and the other party binds itself to pay the full issue price of the shares subscribed for. The share subscription agreement and the incorporation agreement of a private company may be one document.(Amended 20 December 1995)
2. The subscription agreement of a Company must state:
2) the amount of authorised capital of the newly-incorporated Company or the increase of the authorised capital;
3) the date of the general meeting during which the resolution to increase the authorised capital has been passed;
4) the date and registration number of the share issue and of the Company's Articles of Association;
5) the par value and the issue price of the shares, the number of shares of each class issued and the rights they carry;
9) the full name of a subscriber (the name of a legal person) and his/her address ( registered office) ; and
10) the number of shares subscribed for according to their classes.
The incorporator and upon the registration of a Company, the Board, shall be responsible for the drawing up of the draft subscription agreement, announcement and the correctness of the information. If the subscriber has indicated fraudulent or incomplete information specified in Par. 8 and 9 hereof, the public company may unilaterally terminate the subscription agreement and return the contributions.
3. Upon the request of the subscriber, the Company
(when the Company is being incorporated -- its incorporators) must, within 15 days from the written request, return his contributions without any deductions if:
4. The subscriber may not relinquish his liabilities to the Company and the Company may not declare a person's subscription invalid after the Company has been registered or its authorised capital has been increased.
5. The shareholder's priority right to acquire the Company's newly-issued shares shall give him a possibility to subscribe for shares the par value of which is proportionate to the total par value of the shares held by him. The period of time for exercising this right may not be less than 30 days.
Article 41. Payment for Shares
1. Payment for shares means the payment of their issue price in money or in non-pecuniary (property) contributions by the shareholders. Only the assets which are objects of proprietary rights and which may be rated economically may be used as non-pecuniary (property) contributions. Works and services may not be used as contributions.
2. The shares issued by a Company must be fully paid up within the period specified in the subscription agreement, but not later than within 1 year after the signing of the agreement. The subscription agreement must indicate the dates for the payment for shares, including the date for the payment of the first installment.
3.The initial installments paid in money may not be less than 1/4 of the issue price of shares. They shall be paid to the the Company's account the funds of which may be used only after the registration of the Company, at the date established in the subscription agreement. Non-pecuniary (property) contributions for the subscribed for shares shall be paid on the dates prescribed by the share subscription agreement. If the balance of the issue price is paid in non-pecuniary (property) contributions and these contributions are paid by installments, the issue price shall be considered as fully paid up only after the last installment is valued and approved according to the established procedure. (Amended 20 December 1995)
If the initial installments for shares of other issues (except the first issue) are not paid in money, the total issue price must be covered by property installments during the time established for the payment of initial installments. (Amended 20 December 1995)
4. The non-pecuniary (property) contributions shall be valued by the auditor of the Company or by an independent external auditor or commission thereof, appointed by the Board (the incorporators). The shares shall be deemed as fully paid up only after the general meeting approves the valuation of the non-pecuniary (property) contributions.
5. If a shareholder fails to pay the installments for the subscribed shares when due, the Company shall have the right :
1) within 30 days after the expiration of the deadline for the payment for shares, to sell the shares subscribed for by the debtor by auction or to sell them at a fair price (rate). If the shares are sold for a lower price than the subscriber's debt to the Company, the Company shall have the right to demand that he pay the balance. If the shares are sold at a higher price, the difference must be returned to the subscriber;
2) to demand from the defaulting shareholder to pay interest on the amount due at the rate established in the subscription agreement, and recover the sums due through court. The interest may not be less than 25% per year while calculating it on the amount due.
Article 42. Increase of the Authorised Capital
1. The authorised capital of a Company shall be increased provided that a general meeting by at least 2/3 vote resolves to issue new shares or to increase the par value of the issued shares and to amend the Articles of Association accordingly. The Company may issue new shares or increase their par value only after its authorised capital is fully paid (at the last issue price).
2. Amendments to the Articles of Association relative to the increase of the authorised capital shall be registered according to the procedure established by the Law on the Register of Enterprises after all the shares have been subscribed for and the first installments have been collected. If not all shares are subscribed for during the subscription period, the Articles of Association shall be amended and the amount of the authorised capital shall be changed by the resolution of the general meeting. In this case the increase of the authorised capital may not exceed the par value of the subscribed for shares. (Amended 20 December 1995)
3. The authorised capital shall be considered as increased only upon registration of the amendments of the Articles of Association in the Register of Enterprises of the Republic of Lithuania.
4. If within 6 months from the date of the general meeting which has passed the resolution to increase the authorised capital, amendments to the Articles of Association relative to the increase of the authorised capital have not been registered in the Register of Enterprises of the Republic of Lithuania, the increase of authorised capital shall not be recognised. In this case all the contributions must be returned.
5. The resolution to issue preference shares of a new class may be passed, if it is supported by a 2/3 vote of the attending preference shareholders, including non-voting preference shareholders.
Article 43. Increase of the Authorized Capital by Additional Contributions
1. A Company may increase its authorised capital by additional contributions of its shareholders and of other persons only by issuing new shares.
2. An insolvent public company shall be prohibited from increasing its authorised capital by additional contributions by public offering. It may offer these shares only to its shareholders and employees.
3. If a public company has issued convertible debentures, its authorised capital may be increased by issuing new shares ( of a par value specified in the resolution concerning the issue of convertible debentures), for which convertible debenture holders could exchange their debentures. When convertible debentures are being issued, the shareholders must be granted priority rights to acquire these debentures in proportion to the number of shares held by them in the public company, if its Articles of Association do not provide otherwise.
4. In the event that the authorised capital of a company wherein the state (local government) holds over 50% of all shares is being increased by additional contributions, the portion of voting shares held by the state after the increase of the authorised capital in any case:
1) may not be less than 70%, if prior to the increase of the authorised capital the state (local government) held over 70% of all shares;
1. The authorised capital of the Company may be increased by the resolution of a general meeting out of the unappropriated profit, share premium or reserves by issuing new shares which shall be transferred to the shareholders without payment, or by increasing the par value of the previously issued shares.(Amended 20 December 1995)
2. The general meeting shall pass the resolution to increase the authorised capital on the basis of accounts drawn up not earlier than 30 days prior the meeting.
3. It shall be prohibited to increase the authorised capital of the Company out of the unappropriated profit, share premium or reserves the capital reserve and profit reserve funds until losses accounted in the balance sheet are covered. The shares shall be allotted according to the Company shareholders’ list as of the day of the meeting and the par value of their shares on that day. (Amended 20 December 1995)
4. Upon increasing the authorised capital out of the Company's funds, the amendments to the Articles of Association shall be registered according to the procedure established by the Law on the Register of Enterprises. Alongside with other documents, the balance sheet of the Company shall be filed with the registrar.
5. When the Company is increasing its authorised capital out of the capital reserve and profit reserve funds, shareholders shall have the right to receive new shares without payment, the number of which must be proportionate to the total par value of shares held by them, with the exception of cases specified in Par.2 of Article 35 of this Law.
6. Upon the registration of the increased authorised capital, the Board shall, according to the procedure established by the Articles of Association, notify the shareholders of the procedure for the acquisition of the new shares. If the shareholders do not communicate their wish to acquire new shares within 6 months from the receipt of such notice, the Company may dispose of them according to the procedure established by the general meeting. If the shares are uncertificated, the new shares shall be credited to the securities accounts.
7. The new shares shall give their holders equal rights with the holders of other shares of the same class to receive dividends for the business year in which the new shares were issued.
Article 45. Reduction of the Authorized Capital
1. The authorised capital may be reduced by a resolution of the general meeting adopted by a 2/3 vote. When the Company has issued shares of different classes, the general meeting may reduce the authorised capital if this resolution is supported by holders of different classes of shares by 2/3 vote of shareholders that class attending the meeting.
2. The authorised capital may be reduced in order to:
2) eliminate the difference between the Company's net assets and the amount of the authorised capital, caused by losses or Company reorganisation. (Amended 20 December 1995)
3) transfer the property for debts to the state or municipal budgets. (Provisional supplement of 28 December 1995)
4) transfer, in accordance with the procedure established by the Government and following the approved list of enterprises, the property (objects of production and engineering infrastructure, structures, facilities, equipment, social objects) into the ownership of the state or municipalities for the performance of their functions. (Provisional supplement of 22 August 1996)
3. The authorised capital may be reduced only in the following ways:
2) by canceling shares.
While reducing its authorised capital, the Company must first cancel its own shares held by it. The par value of all shares shall be reduced proportionately whereas the number of all shares held by shareholders shall be reduced in proportion to their par value. (Amended 20 December 1995)
While transferring the property in accordance with item 4 par. 2 hereof, a resolution shall be passed at the general meeting specifying the shareholders whose shares shall be annulled and the number of their shares to be annulled, provided the shareholders give their consent thereto. (Provisional supplement of 22 August 1996)
4. The resolution to reduce the authorised capital must be announced publicly 3 times at intervals not shorter than 30 days, or by notifying each shareholder and creditor of the Company. The rules shall not apply when the resolutions are passed in accordance with item 4 of Par. 2 hereof, provided that the written agreement of each creditor is received. (Provisional supplement of 22 August 1996)
5. While reducing its authorised capital, the Company must give additional guarantees for its liabilities to each creditor who demands them.
6. Amendments to the Articles of Association of the Company relative to the reduction of its authorised capital shall be registered according to the procedure established by the Law on the Register of Enterprises: not earlier than 6 months after the first and 30 days after the third public announcement or not earlier than 3 months after the notification of shareholders and creditors and after additional guarantees have been given to those creditors who so requested. This rule shall not apply if the authorised capital is reduced by cancelling the Company's shares acquired by purchasing said shares out of the net profit or the retained profit, or by acquiring them without payment. The authorised capital shall be considered to be reduced only upon registration of the amendments to the Article of Association in the Register of Enterprises of the Republic of Lithuania. (Amended 20 December 1995)
7. If the shareholders fail to timely deliver their shares to the Board for withdrawal from circulation and cancellation, the Board shall publicly declare said shares invalid.
8. Upon the reduction of its authorised capital, the Company may return to the shareholders their contributions fully or in part, or relieve the shareholders from paying the unpaid contributions (a portion of the unpaid contributions) for the subscribed shares (increase the value of their paid-in contributions). Upon the reduction of the authorised capital, the shareholders may be paid only in cash, unless the Articles of Association of the Company or the subscription agreement provide otherwise, with the exception of cases where the resolutions are passed in accordance with item 4 of Par. 2 hereof. (Provisional supplement of 22 August 1996)
Article 46. The Right of a Company to Buy up its own Shares
1. A public company shall be prohibited from buying up its own shares except when:
2) the Company's authorised capital has been reduced in accordance with the procedure established by this Law; and
2. The Company shall buy up its own shares by the resolution of the general meeting. The par value of the shares of a public company purchased for the purpose specified in item 1 of Par.1 hereof, and the par value of its other shares held by the Company may not exceed 1/10 of the authorised capital.
3. A Company may acquire its own shares out of the authorised capital only in the event of the reduction of its authorised capital. (Amended 20 December 1995)
4. If the shares of a public company have been acquired not in compliance with the provisions of this Article, they shall be cancelled and authorised capital shall be reduced by the resolution of the government institution that has registered them.
5. A public company which has bought up its own shares shall not be entitled to the non-propriatory rights incident to these shares.
FINANCES AND DISTRIBUTION OF PROFIT
Article 47. Financial Resources of a Company
1. The financial resources of a Company shall be formed from the internal and external sources. Internal sources may include depreciation charges and profit, external sources may include contributions for shares, proceeds from debentures, borrowed funds and other comparable resources.
2. The Company's Board shall determine the method for calculating the depreciation charges and their rates for the recovery of depreciation of its fixed assets as well as for covering maintenance expenses. These rates shall be established taking into account the changes in the efficiency of the Company's assets and may not exceed maximum economic rates established by the Government of the Republic of Lithuania. The part of the fixed assets which has been written off prematurely (before it has been fully depreciated) shall be attributable to the losses of the Company.
3. By the resolution of the general meeting or the Board, passed at the instruction of the general meeting, the total amount or a portion of the revenue received due to share and debenture premium may be attributed to profit. If the general meeting or the Board have not passed such resolution, said revenue shall be attributed to the capital reserve fund and will be exempt from taxation. (Repealed 20 December 1995)
4. A Company shall have no right to use its profit for other purposes until it pays all the taxes established by laws.
Article 48. Distribution of Profit
1. The profit of a Company received upon deducting all taxes must be distributed no later than within 3 months after the end of the business year when the annual financial statement is being approved at the general meeting. The resolution concerning the distribution of net profit must state:
5) shareholders’ contributions in respect of losses (if the shareholders decide to cover all or part of losses to be appropriated);
9) other cases of profit appropriation: annual payments to the Board and Supervisory Board members, use of profit to pay bonuses to the employees and for other purposes; and
2. In distributing profit (loss) to be appropriated, the general meeting shall have the right to include therein retained profit (loss) at the beginning of the business year, net profit or loss of the business year, transfers from reserves, taking into account provisions of other Articles of this Law, shareholders’ contributions in respect of losses. (Amended 20 December 1995)
3. The sum allocated for the payment of annual share of profit to the members of the Board and the Supervisory Board, bonuses to employees and for other purposes (item 9 of Par.1 hereof) may not exceed 1/5 of net profit. (Amended 20 December 1995)
4. Bonuses to employees paid from the profit may be paid in advance every quarter, if the current results of business activities allow to anticipate sufficient profit. It shall be prohibited to pay in advance share of profit to the Supervisory Board and members of the Board.
5. If the aggregate sum of the compulsory reserve and share premium is less than 1/10 of the authorised capital, deductions to the compulsory reserve shall be mandatory and may not be less than 1/20 of net profit. (Amended 20 December 1995)
6. It shall be prohibited to pay dividends, annual share of profit to members of the Board and Supervisory Board, bonuses to the employees or to distribute profit in any other way until the accounts are settled with the agriculturural producers for the produce sold.
Article 49. Dividends
1. A dividend is the part of the profit a shareholder receives, which is proportionate to the par value of the shares held by him. If a share is not fully paid, the shareholder's dividend shall be reduced in proportion to the unpaid amount of the price of the share. The Articles of Association may provide that the dividend on fully paid share must be reduced if the last installment of their price was paid in the business year for which the dividend is paid.
2. Dividends declared by the general meeting shall become the Company's liability to its shareholders. The shareholders shall have the right to demand the payment of his dividend as a creditor of the Company. The Company shall have the right to recover the dividend paid out to a shareholder if the shareholder knew or should have known that the declared dividend was unlawful.
3. The general meeting shall be prohibited from declaring or paying dividends if the Company is insolvent or if after the payment of dividends it would become insolvent. If the balance sheet of the Company shows losses, the general meeting shall have no right either to declare or pay dividends until the losses are covered or until the authorised capital is reduced due to losses.
4. The Company must pay dividends not later than within 3 months from the date of the general meeting which has declared them. It shall be prohibited to pay dividends in advance.
5. The Company shall pay dividends in money. If the shareholder does not object, dividends may be paid in the Company's shares or other securities.
| FINAL PROVISIONS |
Article 50
1. Public and private companies shall have to amend their Articles of Association according to this Law and have them registered according to the procedure established by the Law on the Register of Enterprises within 12 months as of the date of the enactment of this Law. In the Companies in which judicial or out-of-court bankruptcy procedure is applied the time period specified above shall be calculated from the day of dismissal of the bankruptcy case or termination of out-of-court bankruptcy procedure. (Amended 4 May 1995; Amended 20 December 1995)
2. Public and private companies, including companies reorganised from other types of enterprises in the manner prescribed by Par. 3 hereof, the the authorised capital of which is less than the minimum amount established by this Law, shall have, within 2 years from the promulgation of this Law, to increase their authorised capital correspondingly. Companies which fail to meet this requirement must be reorganised or liquidated according to the procedure established by the laws of the Republic of Lithuania. (Amended 20 December 1995)
3. State and state stock enterprises, with the exception of those state enterprises which are not planned by the Government of the Republic of Lithuania either to be reorganised into companies or to be privatise by 2000, as well as private (personal) enterpises with the rights of legal person, must be reorganised into companies according to the procedure established by the Government of the Republic of Lithuania, and within 12 months from the enactment of this Law, must be registered in the Register of Enterprises of the Republic of Lithuania. For enterprises which are being privatised according to the Law on the Initial Privatisation of State Property, the specified time shall be calculated from the completion of their privatisation, whereas for enterprises to which judicial or out-of-court bankruptcy procedure is applied - from the dismissal of the bankruptcy case or termination of the out-of-court bankruptcy procedure. The Government of the Republic of Lithuania must prepare and submit by 1 November 1994 the list of such enterprises (indicating their authorised capital) to the Seimas for approval, as well as prepare a draft law on state and local government enterprises. (Amended 4 May 1995; Amended 20 December 1995)
4. The total value of shares of a commercial (joint stock) bank, registered in the Republic of Lithuania, in other companies, with the exception of commercial (joint stock) banks and companies directly servicing banks, may not exceed 10% of the bank's fixed capital registered with the Bank of Lithuania.
6. Law on State Enterprises of the Republic of Lithuania shall be binding only upon state enterprises that are specified in Par.3 hereof. (Repealed 21 December 1994)
6. The Government of the Republic of Lithuania must prepare and submit to the Seimas by 1 June 1995 drafts of laws which would provide for the liability for the violation of the time limits set in Pars. 1 and 3 hereof for the registration of the amendment of the enterprises' Articles of Associations and for the reorganisation of enterprises. (Amended 4 May 1995)