REPUBLIC OF LITHUANIA
LAW ON PUBLIC ESTABLISHMENTS
3 July 1996 No I-1428
Vilnius
(As last amended on 21 April 2022 – No XIV-1039)
Article 1. Purpose of the Law
1. This Law shall govern the founding, management, activities, reorganisation, restructuring and liquidation of public establishments.
2. The provisions of this Law shall apply to state higher education and research institutions which take the legal form of a public establishment as well as to vocational training establishments which take the legal form of a public establishment to the extent that the Law of the Republic of Lithuania on Higher Education and Research or the Law of the Republic of Lithuania on Vocational Training does not provide otherwise.
3. The provisions of this Law on the preparation, submission and publication of a set of annual financial statements and an activity report shall apply to public establishments which are classified as public sector entities pursuant to the Law of the Republic of Lithuania on Public Sector Accountability to the extent that the Law on Public Sector Accountability does not provide otherwise.
Article 2. Concept of a public establishment
1. A public establishment shall be a non-profit public legal person of limited civil liability founded according to this Law and other laws, the goal of which is to satisfy public interests by carrying out educational, training and scientific, cultural, health care, environmental protection, sports development, social or legal aid activities as well as other public-benefit activities.
2. A public establishment must have at least one account with a credit or electronic money institution.
3. The registered office of a public establishment must be in the Republic of Lithuania.
4. A public establishment shall, in its activities, be based on its articles of association, the Civil Code, this Law and other laws as well as other legal acts.
Article 3. Rights and duties of a public establishment
1. A public establishment may have and acquire only the civil rights and duties which are in conformity with laws, the articles of association and operational goals of the public establishment.
2. A public establishment shall not be allowed the following:
1) to allocate earned surplus/profit for other operational goals specified in its articles of association;
2) to transfer, free of charge, its assets into the ownership or under a trust or loan for use contract to a stakeholder in the public establishment or to a person related thereto, with the exception of a case provided for in Article 17(10) of this Law;
3) to borrow funds at interest from its stakeholder or from a person related thereto;
4) to provide security for the discharge of the obligations of other persons.
3. A person related to a stakeholder and referred to in points 2 and 3 of paragraph 2 of this Article shall be:
1) a close relative, spouse, close relative of a spouse of the stakeholder being a natural person, cohabiting partner of the stakeholder, where partnership has been registered in accordance with the procedure laid down by law;
2) a legal person holding more than a half of votes at the meeting of participants of the stakeholder being a legal person;
3) a legal person more than a half of the votes at the meeting of participants of which are held by the public establishment’s stakeholder, the persons referred to in points 1 and 2 of this paragraph either individually or jointly.
4. A public establishment shall have the right to pursue economic and commercial activities which are not prohibited by law and which are inseparably connected with the operational goals thereof.
5. A public establishment shall have the right to set up branches and representative offices in the Republic of Lithuania and in foreign states. The number of the branches and representative offices of the public establishment shall not be limited.
Article 4. Founding of a public establishment
1. The founders of a public establishment may be the State, municipalities and other persons not benefiting from the activities of this establishment. The number of the founders shall not be limited.
2. The legal ground for founding a public establishment shall be a transaction for the founding of the public establishment as concluded by the founders in accordance with the procedure laid down by this Law, namely, a memorandum of association or a founding deed of the public establishment.
3. A public establishment’s memorandum of association shall be signed by all the founders or persons authorised by them. If the founder is a sole person, he or a person authorised by him shall sign a founding deed of the public establishment.
4. If the founder is the State or a municipality, a memorandum of association or a founding deed of a public establishment shall be drawn up in accordance with a resolution of the Government of the Republic of Lithuania (hereinafter: the ‘Government’) or a decision of the municipal council on the founding of a public establishment and the investment of assets owned by the State or a municipality in accordance with the procedure laid down in the Law on the Management, Use and Disposal of State and Municipal Assets. The resolution of the Government or the decision of the municipal council must also indicate a state or municipal institution charged with representation of the founder as well as a state or municipal institution charged with exercise of the rights and duties of the State or the municipality as the owner of or stakeholder in the public establishment.
5. The persons who have the right to represent a public establishment being founded may conclude transactions on behalf of and for the benefit of the public establishment being founded. Obligations under these transactions shall arise for the public establishment following their approval by the head of the public establishment or by other body specified in the articles of association thereof upon the founding of the public establishment. Where the body of the public establishment does not approve these transactions, the obligations based on these transactions shall be jointly and severally guaranteed by the persons who have concluded them.
6. A statutory meeting shall be convened prior to the registration of a public establishment. It must appoint the head of the public establishment as well as form collegial bodies, where the articles of association of the public establishment provide therefor. At the statutory meeting, all founders of the public establishment shall have the right to vote. One founder shall have one vote at the statutory meeting, unless the memorandum of association of the public establishment provides otherwise. Where a public establishment is founded by a sole founder, his written decisions shall be held equal to the decisions taken at the statutory meeting.
7. It shall be possible not to convene a statutory meeting of a public establishment if the memorandum of association or the founding deed of the public establishment specifies the head of that public establishment as well as its collegial bodies and their members or the articles of association of the public establishment stipulates that collegial bodies are set up.
Article 5. Memorandum of association of a public establishment
1. A memorandum of association of a public establishment must specify the following:
1) the founders (forenames, surnames, personal numbers and home addresses of natural persons; names, registered offices, registration numbers of legal persons, forenames and surnames of their representatives). Where the founder is the State or a municipality, a state or municipal institution charged with representation of the founder must be indicated;
2) the name and registered office of the public establishment;
3) the area(s) of activity and operational goals of the public establishment;
4) property and non-property obligations of the founders, the procedure and time limits of discharge of such obligations;
5) the procedure for compensating for the founding costs;
6) the procedure for settling disputes between the founders;
7) the persons who have the right to represent the public establishment being founded, their rights and powers;
8) the procedure for convening a statutory meeting and taking decisions at this meeting, if the statutory meeting is convened;
9) the date of the conclusion of the memorandum of association.
2. A memorandum of association of a public establishment may also contain other provisions, provided they are not in contradiction to this Law and other laws.
3. A founding deed of a public establishment shall be subject to the requirements set out for a memorandum of association, with the exception of the requirements referred to in points 6 and 8 of paragraph 1 of this Article.
4. Model forms of a founding deed and a memorandum of association of a public establishment shall be approved by the Government or an institution authorised by it.
Article 6. Articles of association of a public establishment
1. Articles of association shall be a founding document whereto a public establishment adheres in its activities.
2. The articles of association of a public establishment must specify the following:
1) the name of the public establishment;
2) the legal form, namely, a public establishment;
3) the period of the activities thereof, if it is limited;
4) the operational goals (they must be defined in a clear and comprehensive manner by specifying the fields and types of the activities);
5) the procedure for becoming a new stakeholder;
6) the procedure for selling a stakeholder’s rights to other persons;
7) the procedure for transferring stakeholders’ contributions to the public establishment;
8) the powers of the general meeting of stakeholders, procedure for convening it and taking of decisions;
9) the remit of collegial bodies, where such bodies are formed, the procedure for electing and recalling members of these collegial bodies;
10) the procedure for appointing and recalling the head of the public establishment, his remit;
11) the procedure for amending the articles of association;
12) the procedure for setting up branches and representative offices and for terminating activities thereof;
13) the procedure for submitting documents and other information about activities of the public establishment to stakeholders;
14) the source in which public notices of the public establishment are published;
15) the procedure for communicating to the public information about activities of the public establishment.
3. The source, as indicated in point 14 of paragraph 2 of this Article, in which public notices of a public establishment are published must be a gazette and/or an electronic publication for public notices published by the data processor of the Register of Legal Entities in accordance with the procedure laid down by the Government.
4. The remit of the general meeting of stakeholders in a public establishment, the procedure for appointing and recalling the head of the public establishment as well as his remit, the procedure for amending the articles of association need not be indicated, unless they differ from those laid down by this Law and the articles of association of that public establishment expressly state so. The articles of association may also contain other provisions which are in conformity with this Law and other laws. If it transpires that the articles of association contain provisions which are not in conformity with this Law and other laws, the articles of association must be amended.
5. The articles of association of a public establishment must be signed by all founders or persons authorised by them. If a statutory meeting is convened during the founding of the public establishment, the articles of association must be signed before the statutory meeting. The amended articles of association of the public establishment shall be signed by a person authorised by the general meeting of stakeholders which has taken a decision to amend these articles of association.
6. The articles of association of a public establishment being founded shall become invalid if they have not been submitted to the Register of Legal Entities within six months from the signing thereof.
7. The signatures of the natural persons who have signed the articles of association of a public establishment shall not be authenticated by a notary.
8. The model articles of association of a public establishment shall be approved by the Government or an institution authorised by it.
Article 7. Stakeholders in a public establishment
1. A stakeholder in a public establishment shall be a natural or legal person who has, in accordance with the procedure laid down by this Law or by the articles of association of the public establishment, transferred to the public establishment a contribution and has a stakeholder’s rights as specified by this Law, other laws and the articles of association as well as a person whereto a stakeholder’s rights have been transferred in accordance with the procedure laid down by the articles of associations or by law.
2. The founders of a public establishment who have, in accordance with the procedure laid down by this Law and the articles of association, transferred to the public establishment a contribution shall become stakeholders therein.
3. If a public establishment has a sole stakeholder, he shall be referred to as the owner of the public establishment. The provisions of this Law which are applied to stakeholders shall also be applicable to the owner.
4. A stakeholder in a public establishment shall have the right to receive a part of the assets of the public establishment in liquidation in accordance with the procedure laid down by Article 17(10) of this Law.
5. A stakeholder in a public establishment shall have the following non-property rights:
1) to participate and to vote at the general meetings of stakeholders in the public establishment;
2) to be given access to documents of the public establishment and to obtain the information held by the public establishment about its activities;
3) to bring an action before the court for the annulment of the decisions taken by the general meeting of the stakeholders in the public establishment and by other bodies of the public establishment as well as for voidability of the transactions concluded by management bodies if they are not in conformity with imperative norms of laws, the articles of association of the public establishment or the principles of reasonableness and good faith;
4) to bring an action before the court seeking an injunction to prevent the management bodies of the public establishment from concluding in the future the transactions which are not in conformity with the operational goals of the public establishment or violate the remit of a management body of the public establishment;
5) other non-property rights specified by law and the articles of association.
6. A stakeholder in a public establishment shall have the right to sell or otherwise transfer a stakeholder’s rights. A stakeholder’s rights in a public establishment shall be sold in accordance with the procedure laid down in the articles of association, except for a stakeholder’s rights in a state or municipal public establishment. A stakeholder’s rights in a state or municipal public establishment may be sold or transferred to other persons in the cases and ways established by this Law and the laws governing the management, use and disposal of state and municipal assets.
7. A stakeholder in a public establishment who has acquired a stakeholder’s rights from another stakeholder in the public establishment, as well as any other person who has acquired a stakeholder’s rights shall notify the public establishment in writing thereof. The notice must indicate the stakeholder who has sold or otherwise transferred a stakeholder’s rights in the public establishment (forename, surname, personal number of the natural person; name of the legal person) and the stakeholder who has acquired the transferred stakeholder’s rights (forename, surname, personal number of the natural person; name of the legal person), or another person who has acquired a stakeholder’s rights (forename, surname, personal number, home address or address for correspondence of the natural person; name, registered office, registration number of the legal person, forename and surname of a representative of the legal person) and the date of acquisition of a stakeholder’s rights. The notice shall be accompanied by a document evidencing the acquisition of a stakeholder’s rights or an extract thereof. If the extract of the document is provided, it must indicate the parties to the transaction for the acquisition of a stakeholder's rights, the object of the transaction, the date of the transaction and the value of the contributions of the stakeholder who has transferred a stakeholder's rights to the stakeholders' capital, provided that this is stated in the document evidencing the acquisition of a stakeholder's rights.
Article 8. Registration of a public establishment and the data of the Register of Legal Entities
1. A public establishment must be registered in the Register of Legal Entities.
2. In order to register a public establishment, the memorandum of association, the articles of association and other documents required for the registration of the public establishment as specified by law must be submitted to the Register of Legal Entities.
3. When registering a public establishment, the articles of association thereof shall be registered too.
4. A public establishment shall be considered to be founded upon registration thereof in the Register of Legal Entities.
5. In addition to the data listed in Article 2.66 of the Civil Code, the Register of Legal Entities shall also specify the period of activities of a public establishment, if it is limited.
Article 81. Information system data of participants in legal persons
1. The data processor of the information system of participants in legal persons set up in accordance with the Law of the Republic of Lithuania on Management of State Information Resources shall be provided with the following data on stakeholders in a public establishment:
1) data on each stakeholder (forename, surname, personal number and home address or correspondence address of the natural person; name, legal form, registration number and registered office of the legal person). When submitting the data on a stakeholder being a natural person of a foreign state, the date of birth of that person (if the legal acts of the foreign state do not provide for a personal number, only the date of birth) and the name of the state which issued the identity documents shall be additionally indicated, and when submitting the data on a stakeholder being a legal person of a foreign state, the state in which the legal person is registered, the register in which the legal person is registered and the date of its registration in that register shall be additionally indicated;
2) the date of the acquisition of a stakeholder's rights;
3) the date of the transfer of a stakeholder's rights;
4) value of a stakeholder’s contributions.
Note from the Register of Legal Acts. Public establishments founded before 31 October 2017 whose stakeholders or data thereon did not change from 31 October 2017 until 1 May 2018 must submit the data on their stakeholders as referred to in Article 81(1) to the data processor of the Information System of Legal Entities Participants by 1 July 2018.
2. If a stakeholder being a natural person has indicated his home address and address for correspondence to a public establishment, only the address for correspondence shall be provided to the data processor of the Information System of Legal Entities Participants.
3. If a stakeholder is the State or a municipality, when submitting the data on this stakeholder to the data processor of the Information System of Legal Entities Participants, the fact that the stakeholder is the State or municipality (together with the code of the State or municipality) shall be indicated and the name, legal form, registration number, registered office of the institution implementing the rights and duties of the stakeholder.
4. Data on stakeholders in a public establishment shall be submitted to the data processor of the Information System of Legal Entities Participants in accordance with the procedure laid down in the Regulations of this Information System.
5. Upon the registration of a public establishment in the Register of Legal Entities, the data on the stakeholders in this public establishment shall be submitted to the data processor of the Information System of Legal Entities Participants no later than within five days after the contribution was transferred by the founder to the public establishment in discharge of the property obligations referred to in the founding transaction and became a stakeholder and, in the event of a change of the stakeholders in the public establishment or in the number thereof, as well as in the data referred to in paragraphs 1 and 3 of this Article, no later than within five days from the date of these changes.
6. The head of a public establishment shall be responsible for the submission of data on the stakeholders in this public establishment to the data processor of the Information System of Legal Entities Participants.
7. The information prepared on the basis of the data accumulated in the Information System of Legal Entities Participants shall be provided against consideration to natural and legal persons entitled to receive it, except for the cases when it is:
1) provided to stakeholders in a public establishment, where the Information System of Legal Entities Participants processes the data thereon, once per calendar year;
2) forwarded to related registers and state information systems;
3) provided to state and municipal institutions and agencies as requested and/or under agreements, for the purpose of exercising the functions laid down in legal acts;
4) provided to journalists under the conditions set out in the Law of the Republic of Lithuania on the Provision of Information to the Public.
8. The amount of consideration for the provision of information prepared on the basis of the data accumulated in the Information System of Legal Entities Participants may not exceed the administration costs of the Information System of Legal Entities Participants, including reasonable return on investment.
Article 9. Bodies of a public establishment
1. A public establishment shall acquire civil rights, assume civil duties and discharge them via its management bodies.
2. A public establishment may not acquire civil rights and duties via its stakeholders.
3. A public establishment must have a body, namely, the general meeting of stakeholders, and a single-person management body, namely, the head of the public establishment.
4. The head of a public establishment shall organise activities of the public establishment and act on behalf of the public establishment in relations with other persons, conclude and terminate employment contracts with employees of the public establishment. The head of the public establishment shall take up his duties from the date of his appointment, unless otherwise provided by a decision of the general meeting of stakeholders who appointed him, or, where a public establishment is founded, from the date of registration of the public establishment.
5. The head of a public establishment shall be responsible for the following:
1) organisation of financial accounting in accordance with the Law of the Republic of Lithuania on Financial Accounting;
2) selection and/or appointment of a person who prepares financial statements;
3) timely submission of correct, accurate and complete information on transactions as well as other information necessary for preparing financial statements to the person who prepares financial statements or an annual report;
4) preparation and submission of a set of annual financial statements and an activity report, together with the auditor's report (in the case of carrying-out of audit of the financial statements), or the preparation and submission of an annual report to the Register of Legal Entities and to the general meeting of stakeholders;
5) submission of the data referred to in Article 2.66 of the Civil Code to the Register of Legal Entities;
6) publication of the set of annual financial statements, the activity report and the auditor's report (in the case of carrying-out of audit of the financial statements) or the annual report on the public establishment's website, if the public establishment has one;
7) provision of access at the public establishment's registered office for third parties to the set of annual financial statements, the activity report and the auditor's report (in the case of carrying-out of audit of the financial statements) or the annual report;
8) convening of the general meeting of stakeholders;
9) notifying of the stakeholders of events that may have an impact on the continuity, nature and scope of the public establishment’s activities;
10) record-keeping of the stakeholders in the public establishment;
11) communication to the public of information about activities of the public establishment publicly available and publication of public notices;
12) performance of other duties of the head provided for in this Law and the articles of association of the public establishment.
6. A person authorised by the general meeting of stakeholders in a public establishment shall, on behalf of that establishment, conclude an employment contract with the head of the public establishment and terminate it. Where the general meeting of stakeholders decides to recall of the head of the public establishment, the employment contract concluded with the head of the public establishment shall be terminated. A volunteering contract may be concluded with the head of the public establishment which is not classified as a public sector entity and which is registered as a non-governmental organisation in the Register of Legal Entities. The employment disputes arising between the head of the public establishment and that public establishment shall be dealt with in court.
7. The articles of association of a public establishment may also provide for a collegial management body of the public establishment as well as other collegial bodies. The number, remit of members of the collegial bodies of the public establishment, the procedure for electing and recalling the members of these bodies shall be laid down by the articles of association of the public establishment. The general meeting of stakeholders shall not have the right to delegate to the collegial bodies of the public establishment any matters falling within the remit of the general meeting of stakeholders under this Law and the articles of association of the public establishment. The collegial bodies of the public establishment shall act in accordance with approved rules of procedures. Members of the collegial bodies of the public establishment shall not be remunerated for activities therein, unless the articles of association of the public establishment provide otherwise.
8. The articles of association of a public establishment may establish quantitative representation. In such a case and in compliance with the provisions of the Civil Code regulating quantitative representation, the articles of association must set out specific rules for such a representation, however, in all cases the head of the public establishment, too, must act on behalf of that public establishment.
Article 10. General meeting of stakeholders in a public establishment
1. The general meeting of stakeholders in a public establishment shall:
1) amend the articles of association of the public establishment;
2) take a decision on changing the registered office of the public establishment;
3) set the prices and tariffs of services, works and products or the rules for setting thereof;
4) appoint and recall the head of the public establishment and set out the terms and conditions of his employment contract;
5) elect and recall members of the collegial bodies if the articles of association of the public establishment provide for collegial bodies;
6) approve a set of annual financial statements or an annual report within four months from the end of the financial year, unless the public establishment is liquidated in the cases referred to in points 2, 3, 4 and 7 of Article 2.106 of the Civil Code;
7) determine the information which is communicated to the public about activities of the public establishment;
8) take a decision on the transfer, lease, transfer under a loan for use contract or pledge of the fixed assets belonging to the public establishment by the right of ownership;
9) take a decision on the reorganisation of the public establishment and on the approval of terms of reorganisation;
10) take a decision to restructure the public establishment;
11) take a decision to liquidate the public establishment or to cancel liquidation thereof;
12) appoint and recall the liquidator, where, in the cases specified by this Law, a decision to liquidate the public establishment is taken by the general meeting of the stakeholders;
13) lay down the procedure for internal control of the public establishment;
14) take a decision on the audit of a set of annual financial statements of the public establishment in cases other than those referred to in Article 11(7) of this Law and select an auditor or an audit firm;
15) take a decision on the centralised performance of the functions specified in Article 111 of this Law;
16) decide other issues assigned to the remit of the general meeting of stakeholders by this Law and the articles of association of the public establishment.
2. Decisions of the general meeting of stakeholders shall be taken by a simple majority of votes of all the stakeholders participating in the meeting, with the exception of the decisions referred to in points 9, 10 and 11 of paragraph 1 of this Article, which are taken by a qualified majority vote. It shall be established by the articles of association of a public establishment, and it may not be less than two-thirds of the votes of all stakeholders participating in the meeting.
3. At the general meeting of stakeholders, the right of decisive vote shall be granted to all stakeholders in a public establishment. One stakeholder shall have one vote at the general meeting of stakeholders, unless the articles of association of the public establishment provide otherwise. The head of the public establishment and members of other bodies, unless they are stakeholders, may participate in the general meeting of stakeholders without the voting right. Other persons may also participate in the general meeting of stakeholders subject to consent by the stakeholders.
4. The general meeting of stakeholders shall be convened in accordance with the procedure laid down by the articles of association of a public establishment.
5. The regular general meeting of stakeholders must be convened every year within four months from the end of the financial year of a public establishment.
6. The general meeting of the stakeholders in a public establishment may be convened by order of the court if it has not been convened in accordance with the procedure laid down by this Law and by the articles of association of the public establishment, and a stakeholder in or member of a body of the public establishment has brought the matter to the court.
7. Minutes must be taken of all general meetings of stakeholders.
8. Written decisions of the owner of a public establishment shall be equal to the decisions taken by the general meeting of stakeholders.
Article 11. Set of annual financial statements, audit thereof and an activity report. An annual report
1. The head of a public establishment must prepare and submit to the regular general meeting of stakeholders after the end of the financial year the following documents:
1) a set of annual financial statements;
2) an activity report.
2. A set of annual financial statements shall consist of the following financial statements:
1) a statement of financial position disclosing the public establishment's total assets, equity, financing amounts and liabilities on the last day of the reporting period;
2) a performance report showing the total income, expenses and results of operations of the public establishment for the reporting period, either surplus/profit or deficit/loss;
3) an explanatory note to the financial statements detailing and explaining the amounts indicated in the statement of financial position of the public establishment and in the performance report, the person who prepared the financial statements and the period covered by the financial statements prepared by him, as well as additional material information not included in the financial statements and other information specified in this Law.
3. If a public establishment has received support during the reporting financial year, the explanatory note to the financial statements must also include information on the financial and non-financial support received (where the non-financial support includes the assets received for the use by the lending right) and its use, as well as on other funds received during the financial year, their sources and their use. Information on providers of support being legal persons must separately identify each legal person that has provided support, the subject and the value of the provided support. If the value of the support provided by the provider of support during the reporting financial year does not exceed two average monthly salaries and does not constitute more than ten per cent of the total support and/or total funding received by the public establishment during the reporting financial year, the legal person that provided support may be omitted.
4. An activity report of a public establishment must include the following:
1) the public establishment's operational goals, objectives and achievements in pursuit of its objectives of activities as well as the operational goals, objectives and planned achievements for the coming financial year;
2) the stakeholders in the public establishment and the value of contributions of each of them at the end of the financial year and at the end of the preceding financial year.
5. An activity report may also include other information decided by the public establishment's head or general meeting of stakeholders.
6. The management body specified in the articles of association of an public establishment which, pursuant to the Law on Financial Accounting, has opted for simplified financial accounting may, instead of the reports referred to in paragraph 1 of this Article, prepare and submit to the general meeting of stakeholders an annual report containing the information referred to in points 1 and 2 of paragraph 2 and paragraphs 3, 4 and 5 of this Article.
7. The audit of annual financial statements of a public establishment must be carried out when at least two of the following conditions are met:
1) the public establishments is classified as a public sector entity in accordance with the Law on Public Sector Accountability and its activities are financed for at least 50 per cent from the state and/or municipal budget(s);
2) the value of the assets in the statement of financial position exceeds EUR 1 800 000 on the last day of the financial year;
3) revenue during the reporting financial year exceeds EUR 3 500 000.
8. The audit of annual financial statements of a group of public sector entities whose controlling entity is a public establishment must be carried out if the indicators of such group of public sector entities meet at least two of the conditions referred to in paragraph 7 of this Article.
9. The procedure for preparing annual financial statements comprising a set of annual financial statements and an annual report shall be laid down in the Financial Reporting Standard of Lithuania.
Article 111. Centralised performance of the general functions of public establishments whose owner or a stakeholder is the State or a municipality
1. Part of the general functions of public establishments whose owner or stakeholder is the State or a municipality (financial accounting, document management, personnel management and other ancillary functions) which contribute to the achievement of the statutory objectives of a public establishment (hereinafter: ‘general functions’) may be performed on a centralised basis.
2. A decision regarding a body(ies) which would perform the general functions referred to in paragraph 1 of this Article on a centralised basis shall be taken by:
1) the Government in respect of a public establishment whose owner or stakeholder is the State which holds more than half of the votes at the general meeting of stakeholders;
2) the municipal council in respect of a public establishment whose owner or stakeholder is a municipality which holds more than half of the votes at the general meeting of stakeholders;
3) the general meeting of stakeholders in respect of public establishment other than those referred to in points 1 and 2 of this paragraph whose stakeholder is the State or a municipality.
3. The procedure of centralised performance of the general functions of public establishments shall be laid down by the Government.
4. When the general functions of a public establishment are performed on a centralised basis, the functions, duties and responsibilities of the head of this public establishment and the head of an establishment performing its general functions on a centralised basis shall be allocated in accordance with the procedure laid down by the Government, taking into consideration the scope of the functions performed.
Article 12. Signing, publication and submission of a set of annual financial statements, an activity report and an annual report, monitoring of the quality of financial statements
1. A set of annual financial statements, an activity report and an annual report must be signed by the head of a public establishment. These documents must state the position, forename and surname of the signatory.
2. A set of annual financial statements, an activity report together with the auditor's report (in the case of carrying out of audit of the financial statements) and an annual report shall be public documents. These documents for at least the last three financial years, except for personal data of natural persons that are not made public according to the laws governing the protection of personal data of natural persons, must be published on the public establishment's website, if the public establishment has one. In addition, third parties must be given access to these documents at the registered office of the public establishment.
3. An activity report of a public establishment must be submitted to the data processor of the Register of Legal Entities together with a set of annual financial statements, and in the case of carrying out of audit of the financial statements, the auditor's report must be submitted together with the audited set of the annual financial statements. The set of annual financial statements of a public establishment classified as a public sector entity and, in the case of the audit of the financial statements, the audited set of the annual financial statements, together with the auditor’s report, shall be submitted to the data processor of the Register of Legal Entities in accordance with the procedure laid down by the Government or an institution authorised by it. A public establishment which is entitled to prepare an annual report in the case referred to in Article 11(6) of this Law must submit the annual report to the data processor of the Register of Legal Entities. The documents submitted to the data processor of the Registry of Legal Entities shall be published free of charge on the website of the data processor of the Register of Legal Entities no later than within 30 days from their receipt.
4. The Government of the Republic of Lithuania or an institution authorised by it shall lay down the procedure for monitoring the quality of financial statements published in the Register of Legal Entities and designate an institution to fulfil this monitoring.
Article 13. Equity of and the funds not subject to repayment received by a public establishment
1. The equity of a public establishment shall consist of:
1) the stakeholders’ capital;
2) surplus/profit or deficit/loss;
3) a reserve in the change in the value of assets, where such a reserve may arise under applicable financial reporting standards;
4) reserves from earned surplus/profit.
2. The capital of stakeholders in a public establishment shall be equal to the value of stakeholders’ contributions.
3. Stakeholders’ contributions may be made in money as well as the tangible and intangible assets valued in accordance with the Law on the Bases of Property and Business Valuation. The value of each contribution shall be equal to the amount of money contributed or correspond to the value of the assets indicated in the assets valuation report drawn up no later than six months prior to the transfer of the stakeholder’s contribution to the public establishment.
4. If a person who has acquired a stakeholder's rights from a stakeholder in a public establishment becomes a stakeholder, the value of the contributions of the person who has acquired a stakeholder's rights shall correspond to the value of the contributions of the stakeholder who has transferred a stakeholder's rights. If a stakeholder acquires a stakeholder’s rights from another stakeholder of the public establishment, the value of the stakeholder’s contributions shall increase by the value of the contributions of the stakeholder who has transferred a stakeholder's rights.
5. A stakeholder shall be issued a document confirming the value of his/its contributions. If a stakeholder additionally transfers a contribution to a public establishment or acquires a stakeholder's rights from another stakeholder, this document must be replaced.
6. The stakeholders’ capital may be increased only by stakeholders’ contributions.
7. A public establishment may build up reserves from the surplus/profit earned from the economic and commercial activities relating to the operational goals specified in the articles of association of the establishment.
8. Reserves from the surplus/profit shall be formed, changed, used and liquidated by a decision of the general meeting of stakeholders.
9. No longer effective from 1 January 2019.
10. A public establishment shall use the support received (funds, any other assets, services provided to it) as well as other non-repayable funds for the goals indicated by a person who has provided the support or transferred the funds (if the person transferring the funds, other assets or providing the services has given such instructions). The public establishment may not accept funds, any other assets and services if a person providing the support or transferring the funds instructs to use the funds, assets or services for the goals other than those laid down in the articles of association of the public establishment.
Article 14. Use of the surplus/profit of a public establishment
1. The surplus/profit earned by a public establishment may be used only to attain the operational goals of the public establishment as specified in its articles of association.
2. The surplus/profit of a public establishment may not be allocated to stakeholders, members of the bodies of the public establishment and for the payment of bonuses to the employees.
Article 15. Reorganisation of a public establishment
1. Public establishments may be reorganised by merger and division as established by the Civil Code.
2. The heads of all public establishments involved in reorganisation or other management bodies must prepare the terms of reorganisation of a public establishment indicating the following:
1) the legal form, business name, registered office, registration number of each public establishment involved in the reorganisation, the register wherein data on these public establishments are accumulated and stored;
2) the mode of reorganisation, the public establishments ceasing to exist, the public establishments continuing their activities after the reorganisation, the newly formed public establishments;
3) the procedure, terms and time limits for a stakeholder in the public establishment ceasing to exist to become a stakeholder in a public establishment continuing after the reorganisation;
4) the moment from which the rights and duties of the public establishment ceasing to exist are transferred to a public establishment continuing after the reorganisation;
5) the persons who are entitled to act on behalf of newly founded public establishments. Only the actions related to the registration of a public establishment may be carried out on behalf of the newly founded public establishments;
6) the persons who must sign the articles of association of the public establishments continuing after the reorganisation;
7) additional rights granted to the head of the public establishment and other management bodies during the reorganisation.
3. The prepared terms of reorganisation must be published in the sources of specified in the articles of association of all public establishments involved in the reorganisation three times with at least 30-day intervals or once at least 30 days prior to the general meeting of stakeholders the agenda of which provides for the adoption of a decision on the reorganisation and all creditors of the public establishment must be notified in writing about this. The notice must specify the following:
1) the information referred to in points 1, 2 and 4 of paragraph 2 of this Article;
2) the venue where and the time when the access is granted to the terms of reorganisation, draft articles of association of the public establishments continuing after the reorganisation and sets of annual financial statements or annual reports for the past three financial years of the public establishments involved in the reorganisation.
4. The terms of reorganisation must be submitted to the Register of Legal Entities no later than on the first day of their publication.
5. No later than 30 days prior to the general meeting of stakeholders the agenda of which provides for the adoption of a decision on reorganisation, the stakeholders in the public establishments involved in the reorganisation shall be granted access to the terms of reorganisation, draft articles of association of the public establishments continuing after the reorganisation as well as to sets of annual financial statements and annual reports for the past three financial years of all public establishments involved in the reorganisation. Each stakeholder in a public establishment shall have the right to obtain copies of all documents specified in this paragraph.
6. A creditor of a public establishment being reorganised shall have the right to request to terminate an obligation or to discharge it prior to the expiry of the time limit as well as to compensate losses if this has been provided for under a transaction or there are grounds for believing that the reorganisation will hamper the discharge of the obligation and if at the request of the creditor the public establishment has not provided an additional security for the discharge of its obligations. The creditor of the public establishment being reorganised may file his claims within two months of the first day of public announcement of the preparation of the public establishment’s terms of reorganisation. Creditors of a public establishment being reorganised shall be granted access to the documents specified in paragraph 5 of this Article and have the right to obtain copies thereof.
7. The general meeting of stakeholders in each public establishment involved in reorganisation shall, by a qualified majority vote, take a decision on the reorganisation of the public establishment, approve the terms of reorganisation and adopt the articles of association of the public establishments continuing after the reorganisation. The articles of association must be signed by the persons specified in the terms of reorganisation. The signatures of these persons shall not be authenticated by a notary.
8. A document confirming the taking of a decision of the reorganisation of a public establishment must be submitted to the Register of Legal Entities. The data processor of the Register of Legal Entities must publish the decision on the reorganisation of the public establishment in accordance with the procedure laid down by legal acts.
9. If a decision has been taken on the reorganisation of a public establishment, it must prepare a set of financial statements or an annual report, both on the basis of the data of the date of adoption of this decision and on the basis of the data of the date of completion of the reorganisation of the public establishment.
10. Reorganisation shall be considered completed upon the registration in the Register of Legal Entities of the new public establishments founded after the reorganisation and of the articles of association thereof or upon the registration of the amended articles of association of the public establishments continuing their activities.
Article 16. Restructuring of a public establishment
1. A public establishment may be restructured into a budgetary institution as well as into a charity and sponsorship fund in accordance with the procedure laid down by the Civil Code, this Law and other legal acts. A public establishment whose stakeholder or owner is the State or a municipality may not be restructured into a charity and sponsorship fund. All rights and duties of a public establishment being restructured shall be transferred to a public legal person continuing after the restructuring.
2. A public establishment may be restructured into a budgetary institution where the owner of the public establishment is the State or a municipality, provided the budgetary institution of the State or municipality continuing after the restructuring may implement the goals indicated in the articles of association of the restructured public establishment and acquire the civil rights and duties meeting requirements of the Law on Budgetary Institutions.
3. A decision to restructure a public establishment into a budgetary institution financed from the state budget of Lithuania must be coordinated with the Ministry of Finance.
4. A decision to restructure a public establishment shall be taken and the founding documents of a legal person continuing after the restructuring shall be adopted by the general meeting of stakeholders by a qualified majority vote.
5. A decision to restructure a public establishment must be published in accordance with the procedure laid down by legal acts and the articles of association in a source specified in the articles of association three times with at least 30-day intervals or it must be published once and all creditors must be notified in writing about this. The notice must specify the following:
1) the legal form and name of the public establishment;
2) the registered office of the public establishment;
3) the registration number of the public establishment;
4) the register accumulating and storing data on the public establishment being restructured;
5) the legal form of a legal person into which the public establishment is being restructured;
6) the procedure, terms and time limits for a stakeholder in the public establishment being restructured to become a stakeholder in a legal person continuing activities after its restructuring;
7) the venue where and the time when a person may be granted access to the founding documents of the legal persons continuing after the restructuring.
6. A document confirming a decision to restructure a public establishment must be submitted to the Register of Legal Entities. The data processor of the Register of Legal Entities must publish the decision to restructure the public establishment in accordance with the procedure laid down by legal acts.
7. Restructuring shall be considered completed upon the registration of the founding documents of a legal person continuing after the restructuring in the Register of Legal Entities.
8. Founding documents shall cease to be valid if they have not been submitted to the Register of Legal Entities within six months of the taking of a decision on the restructuring of a public establishment.
9. A public establishment may not be reorganised and restructured concurrently.
Article 17. Liquidation of a public establishment
1. A public establishment may be liquidated on the grounds laid down by the Civil Code for the liquidation of legal persons.
2. The general meeting of stakeholders or a court, having taken a decision to liquidate a public establishment, must appoint a liquidator.
3. If a public establishment is liquidated on the basis of the expiry of the duration of the public establishment, the general meeting of stakeholders must, at least three months prior to the expiry of the duration, appoint a liquidator or take a decision to extend the period of activities and to amend the articles of association of the public establishment. In this case, if the decision on the liquidation is taken, the public establishment shall acquire the status of a public establishment in liquidation, and the liquidator shall acquire the rights and duties of the management bodies no later than on the first day following the expiry of the duration laid down in the articles of association. If the general meeting of stakeholders does not take a decision to extend the duration of the public establishment and does not appoint the liquidator, any stakeholder in the public establishment as well as the data processor of the Register of Legal Entities shall have the right to apply to the court for the appointment of the liquidator.
4. If a public establishment is liquidated on the basis of a decision of the court or of the creditors to liquidate the bankrupt public establishment, it shall be liquidated in accordance with the procedure laid down by the Law of the Republic of Lithuania on Insolvency of Legal Persons.
5. If a public establishment is liquidated on the basis of a decision of the data processor of the Register of Legal Entities, the public establishment shall be liquidated in compliance with the provisions of the Civil Code governing the liquidation of a legal person at the initiative of the data processor of the Register of Legal Entities.
6. From the day of the appointment of the liquidator, the management bodies of a public establishment shall lose their powers. The general meeting of stakeholders may be convened in accordance with the procedure laid down in the articles of association.
7. The general meeting of stakeholders in a public establishment may replace the liquidator or cancel the liquidation of the public establishment where the public establishment is liquidated by a decision of the general meeting of stakeholders or upon the expiry of its duration.
8. A notice of the liquidation of a public establishment must be published in accordance with the procedure laid down by legal acts and the articles of association in a source specified in the articles of association three times with at least 30-day intervals or it must be published once and all creditors of the public establishment must be notified in writing about this. The notice must specify the following:
1) the legal form and name of the public establishment;
2) the registered office of the public establishment;
3) the registration number of the public establishment;
4) the register accumulating and storing data on the public establishment in liquidation;
5) the date of the taking of a decision to liquidate the public establishment.
9. The liquidator must submit a document confirming a decision to liquidate a public establishment and the particulars of the liquidator to the Register of Legal Entities. The data processor of the Register of Legal Entities must publish this decision in accordance with the procedure laid down by legal acts.
10. Claims of the creditors of a public establishment in liquidation shall be satisfied in accordance with the procedure laid down by law. Upon the satisfaction of all claims of the creditors, the assets the total value whereof may not exceed the stakeholders’ capital shall be returned to the stakeholders from the remaining assets of the public establishment. The assets returned to the stakeholders shall be distributed in proportion to the value of their contributions. Where a portion of the assets remains undistributed, it shall be transferred to other public legal persons registered in the Register of Legal Entities and indicated by the general meeting of stakeholders or by the court upon the taking of a decision to liquidate the public establishment. Where a stakeholder in the public establishment is the State and/or a municipality, the remaining undistributed portion of the assets which is in proportion to the value of the contribution of the State and/or the municipality shall be transferred to the State and/or the municipality upon the liquidation of the public establishment.
11. A decision taken on the liquidation of a public establishment may not be revoked if at least one stakeholder received a portion of the assets of the public establishment in liquidation.
12. A public establishment in liquidation shall not prepare an activity report. In the cases referred to in points 2, 3, 4 and 7 of Article 2.106 of the Civil Code, unapproved sets of financial statements or annual reports by public establishments in liquidation shall be submitted to the data processor of the Register of Legal Entities within five months from the end of the financial year.
Article 18. Remit of a liquidator
1. A liquidator shall have the rights and duties of the head of a public establishment and another management body if such has been formed. The liquidator shall be subject to the same requirements as those applicable to the head of a public establishment.
2. In addition to other duties laid down by this Law and by the Civil Code, the following duties shall be assigned to a liquidator of a public establishment:
1) to notify the Register of Legal Entities of a decision to liquidate the public establishment and to furnish the particulars of the liquidator;
2) to publish the information referred to in Article 17(8) of this Law;
3) to prepare a set of financial statements or an annual report on the basis of the data of the date of adoption of the decision on the liquidation, and to prepare a liquidation report on the basis of the data of the date of completion of the liquidation, where the contents of such report are specified in the Financial Reporting Standard of Lithuania;
4) to complete the discharge of the obligations of the public establishment and to settle with the creditors of the public establishment;
5) to file claims to the debtors of the public establishment;
6) to transfer the remaining assets of the public establishment in accordance with the procedure laid down by this Law;
7) to draw up a liquidation statement of the public establishment;
8) to remove the website if the public establishment has one and to transfer the documents for preservation in accordance with the procedure laid down in the Law on Documents and Archives;
9) to submit to the Register of Legal Entities the liquidation statement of the public establishment as well as other documents required for de-registration of the liquidated public establishment.
I promulgate this Law passed by the Seimas of the Republic of Lithuania.
PRESIDENT OF THE REPUBLIC ALGIRDAS BRAZAUSKAS