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Newsletter 2012 September

  • Lithuania

    01-10-2012

    Company Law

    Amendments to the Law on Companies proposed

    On 7 September 2012, the Ministry of Economy of the Republic of Lithuania submitted a draft law on the amendment of the Law of the Republic of Lithuania on Companies (hereinafter the Draft Law). The main amendments, as proposed by the Draft Law, are in relation to:

    • the management of public limited liability companies;
    • decrease in the administrative burden, related to the submission of documents to the Register of Legal Entities, on private limited liability companies;
    • creating conditions to provide financial assistance both to public and private limited liability companies to purchase shares of a limited liability company.

    It is proposed in the Draft Law to provide that a board of the company could also perform a supervisory function. In such a case, the supervisory council would not be formed, and the articles of association of a company would provide that the board performs supervisory functions. The Draft Law proposes to provide for supervisory functions in the articles of association. Such functions would comprise:

    • supervision of the activities of the head of the company;
    • proposals for cancelling decisions of the company’s head, where such decisions conflict with the laws, other legal acts, the company’s articles of association, decisions of the general meeting of shareholders or of the board.

    The provisions of the Draft Law also aim at avoidance of possible conflict of interest. Subject to adoption of the Draft Law, the possibilities of members of the board to be employed as employees of the company would be limited, as more than half of the members of the board should not employment relationships with the company. Also, where the board is enabled to perform supervisory functions, the head of the company would not be eligible to become member of the board.

    The Draft Law aims at decreasing the administrative burden on private limited liability companies which have only one shareholder. Subject to adoption of the amendments, the single shareholder of the private limited liability company would not be required any longer to submit a shareholders’ list to the Register of Legal Entities.

    Moreover, the Draft Law provides that both public and private limited liability companies would have the right to grant financial aid to natural persons and legal entities in their purchase of the company’s shares. The Draft Law specifies additional conditions for providing financial aid in purchasing the company’s shares. First of all, the transaction should be made under market conditions, in particular what concerns the interest earned by the company. Second, the board of the company should present to the general meeting of shareholders a detailed written report on the conclusion of the transaction for providing financial aid to purchase the company’s shares (by specifying the cause, purpose, terms and conditions, relating circumstances, and price of the transaction, as well as the board’s conclusion regarding the transaction). Third, the decision to conclude the transaction for providing financial aid to purchase the company’s shares should be adopted by the general meeting of shareholders by a qualified majority of votes. It is proposed that the company’s board (or, if the board is not formed, the company’s head) should be liable for the compliance with statutory requirements for the conclusion of the transaction for providing financial aid to purchase the company’s shares.

    As the works of the state enterprise Registru centras (Centre of Registers) to create an information system on the shareholders (partners) of legal entities (where the data on shareholders will be accumulated) are nearing their completion, the Draft Law provides that the list of shareholders of a private limited liability company should be submitted to the information system on the shareholders (partners) of legal entities rather than to the registrar of the Register of Legal Entities.

    According to the currently valid legislation, the registration of a company may take place only after, inter alia, the list of shareholders of a private limited liability company has been drawn up. The Draft Law, however, proposes to abandon such a provision and to provide that the list of shareholders of a private limited liability company should be submitted to the information system on the shareholders (partners) of legal entities not later than within 5 days from the registration of a private limited liability company.

    Employment Law

    Supplements made to the Peculiarities of working time and rest periods in fields of economic activities

    Taking into account that the passenger flows on regular urban transport services are most intense in the morning and in the evening, seeking to adjust the working time and rest periods of mobile workers concerned with the carriage of passengers on regular urban transport services to the established practice of carriage of passengers, on 5 September 2012, the Government of the Republic of Lithuania (hereinafter the Government) adopted supplements to its resolution No. 587, dated 14 May 2003, “Regarding the list of the jobs where the duration of working time of up to 24 hours in each 24 period may be established, and the approval of peculiarities of working time and rest periods in fields of economic activities”. The supplement sets forth that collective bargaining agreements may provide for cases where, in respect of mobile workers, concerned with the carriage of passengers on regular urban transport services, and subject to written consent of such workers:

    • The length of uninterrupted daily rest between working days must be at least 9 consecutive hours if the pattern of uninterrupted work day is applied;
    • The break to rest and eat must be granted after no more than 6 working hours. If the sum of working hours is between 6 and 9 hours, the working time must include a break of at least 30 minutes; if the sum of working hours exceeds 9 hours, the working time must include a break of at least 45 minutes. The breaks may be divided into intervals of at least 15 minutes.

    It should be noted that the above-mentioned provisions shall not apply to mobile workers under 18 years of age.

    The supplement came into force on 9 September 2012.

    Judicial System

    Amendments to the Law on the Establishment of Local District Courts and the Law on the Reorganisation of the Local District Courts adopted

    On 11 September 2012, the Parliament of the Republic of Lithuania (hereinafter the Parliament) adopted amendments to the Law on the Establishment of Local District Courts of the Republic of Lithuania. The amendments provide what local district courts shall be established instead of currently operating local district courts of cities and districts. The amendments will come into force on 1 January 2013.

    On 11 September 2012, the Parliament adopted the Law on the Reorganisation of the Local District Courts, which provides for the reorganisation (by way of merger) of the local district court of the city of Kaunas, the local district court of the district of Kaunas, the local district court of the city of Šiauliai, the local district court of the district of Šiauliai, local district courts No. 1 to 4 of the city of Vilnius, and establishes the terms and conditions of their reorganisation. In order to optimise the workload of the courts and judges of the cities and districts of Lithuania, to effectively save the funds assigned for courts, to ensure more effective planning and use of appropriations of the state budget, and to promote the quality of the operation of courts, effective of 1 January 2013, the courts shall be reorganised as follows:

    • the local district court of the city of Kaunas and the local district court of the district of Kaunas shall be merged into one Kaunas local district court;
    • the local district court of the city of Šiauliai and the local district court of the district of Šiauliai shall be merged into one Šiauliai local district court;
    • local district courts No. 1 to 4 of the city of Vilnius shall be merged into one Vilnius local district court.

    Other News

    Eversheds Saladžius team participated in Vilnius Marathon 2012

    Eversheds Saladžius team raised funds for the United Nations Children’s Fund (UNICEF) by running the Vilnius Marathon on Sunday 9 September. The team raised money to fund 600 vaccinations for children in developing countries.

    Eversheds Saladžius presented Marc Lammers, innovation guru in sports

    Eversheds Saladžius sponsored a conference for business leaders in Lithuania for a fifth year already. The major annual business conference in Lithuania was held in September this year again. The conference, participated by the top business leaders in Lithuania happens to be one of the major business events in the country and summons approximately 300 top management participants from the leading companies in Lithuania.

    This year we sponsored Marc Lammers, the inspiring coach of the Dutch women's national field hockey team, arrival and presentation. Winning coach of the Olympics Gold in Beijing and head of the team which is the most successful in World Cup history, having won the title six times. Mark is well known in the sports world by the employment of the innovative techniques, he has discovered critical ingredients that can unleash the power of a team, as a whole, and each individual that is a part of the team, in unexpected ways.

    Mark delivered his presentation on risk and innovation worthy of gold.

     

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