Cessation of activity


Companies stops to perform its activity in Lithuania due to various reasons. Depending on the case a number of administrative steps and formalities shall be taken. 

According to the local law, the performance of the company could be stopped choosing one of the following cases:
  • suspension of the activity;
  • liquidation;
  • bankruptcy.

Suspension of the activity

It is a temporary break in the operation allowing to stop the company’s activity for five years, during which the company have no obligation to file returns to the Tax Authority.

When the company may suspend the activity?

Shareholders of the company should take a decision on the temporary suspension of the economic activity. The following conditions should be satisfied:
  • the company is not involved in any deals and transactions;
  • the company is not involved in the settlement of account with economic entities;
  • the company does not receive any income.

What kind of document the company should provide?

The company which meets all criteria for a temporary suspension of the activity, should provide to the Tax Authorities:
  • the decision of shareholders concerning the temporary suspension of the activity;
  • the request for the exemption from filling tax returns and other documents;
  • other documents.

Will the company be removed from the register of VAT taxpayers?

The VAT payer suspending its activity will be removed from the Register of VAT Payers.

Liquidation

What is liquidation?

Liquidation of a company is the process whereby assets are converted into cash, all bills paid and the remaining money or property allocated to the owners.

Who carries out the liquidation?

A decision on liquidation of a company and appointment of a liquidator shall be adopted by the General Meeting of Shareholders. Only a natural person may be the liquidator and he shall assume the rights and the duties of the company’s manager and the Board.

Is it necessary to come to Lithuania to liquidate the company?

There is no need for a liquidator, foreing resident, to come to Lithuania due to the liquidation of the company in case our expert is appointed as an agent by a Power of Attorney (POA). POA specifies all the powers given to our expert, who prepares all required documents, represents you at fiscal institutions and accomplish all the liquidation process.

Bankruptcy

Bankruptcy procedure is intended to protect the interests of creditors and the company, finding the right balance between the creditors and the company.

Who can initiate bankruptcy proceedings?

The right to apply to the Court for bankruptcy procedure has:
  • employees of the company;
  • creditors;
  • Head of the company;
  • liquidator.

Who is responsible for carrying out the bankruptcy procedure?

Before opening bankruptcy procedure in the Court, the bankruptcy administrator should be appointed, who carries the bankruptcy procedure.

To whom shall I apply for more information?

Please feel free to contact Zita Merkeliene by e-mail: zita.merkeliene@leinonen.lt or phone number: +370 699 32529.

You may also file our contact form and we will get in touch with you. 
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