Company Law Reform 2026 in Lithuania: key changes

On 30 June 2025, the Lithuanian Parliament adopted a major package of amendments to the Law on Companies (Akcinių bendrovių įstatymas, ABĮ). The amendments have been in force since 1 July 2026.

The company law reform 2026 is intended to reduce administrative burdens, expand corporate financing options and modernise decision-making. For foreign investors assessing the Law on Companies in Lithuania, the reform creates new tools for structuring equity investments, shareholder exits, acquisition financing and corporate governance.

The Lithuanian statute is officially titled the Law on Companies, although foreign investors may also encounter it in searches under the phrase “Companies Act Lithuania”.

What is changing in the Lithuanian Law on Companies in 2026?

The reform introduces redeemable shares, permits financial assistance for the acquisition of a company’s own shares, allows certain decisions on share capital increases and interim dividends to be delegated to management, liberalises preferred share class and shareholder loans, and extends the deadline for annual financial statements and the annual general meeting.

The full changes are set out in the adopted amendment act.

Redeemable shares: a new instrument for investors

One of the most significant elements of the company law reform is the introduction of redeemable shares. A Lithuanian company may issue them only if its articles of association expressly permit this and specify the redemption conditions and procedure.

Both ordinary and preferred shares class may be redeemable. The shares may generally be redeemed at the request of the company or the shareholder, unless the articles establish a different mechanism. Before redemption, the company must form a dedicated reserve at least equal to the aggregate nominal value of the shares being redeemed. An exception applies where the redemption is financed through a new share issue.

Following redemption, the company must cancel the redeemed shares and decrease its authorised share capital. The redemption price must generally be paid within 12 months, unless the articles of association provide for a shorter period.

For investors accustomed to common-law structures, redeemable shares provide a more familiar way to build an exit mechanism directly into the equity instrument. They may be used for temporary capital injections, employee participation arrangements or investments where the parties want a defined route for returning capital. The commercial terms must nevertheless be reflected carefully in the articles, investment documents and relevant shareholder arrangements.

Financial assistance for acquiring company shares

The reform permits a company to provide direct or indirect financial assistance to individuals or legal entities acquiring the company’s shares. Financial assistance may take the form of a loan or security for the buyer’s obligations.

The transaction requires approval by the general meeting of shareholders with a qualified majority of at least two-thirds of the votes represented at the meeting. The company must also create a special reserve at least equal to the proposed financial assistance. Management must prepare a written report explaining the commercial rationale, transaction terms, acquisition price and potential effect on the company’s liquidity and solvency. The transaction must be completed on market terms.

Additional conflict-of-interest safeguards may apply where the beneficiary is a shareholder, a management body member or a related party, including voting restrictions and, in certain cases, an independent expert opinion.

This change may provide greater flexibility in leveraged buyouts, management buyouts and other acquisition structures. The reform does not make every leveraged acquisition structure automatically permissible: corporate interest, solvency, conflicts of interest and market terms must still be assessed. Transaction-specific advice on corporate law in Lithuania is therefore particularly important.

Greater authority for boards and management

Previously, a share capital increase generally required a separate resolution of the general meeting of shareholders. Under the new rules, the general meeting may authorise the board, or the company’s chief executive officer, acting as its statutory manager where no board is formed, to increase the share capital for a period of up to five years.

The authorising resolution must establish the maximum amount of the increase and address whether management may disapply shareholders’ pre-emption rights or accept non-cash contributions. This can help companies complete investment rounds and other financing transactions more quickly without convening a new shareholder meeting for each issue.

The articles may also allow the board or chief executive officer to decide on interim dividends, up to a limit specified in the articles of association. Investors should therefore review whether existing reserved matters, board authorities and consent thresholds remain appropriate. Related protections should also be aligned in the shareholders’ agreement.

These changes provide additional flexibility but also increase the importance of clearly allocated responsibilities. Foreign managers should ensure that delegated authority is exercised consistently with their statutory duties and internal approval procedures. More information is available in our guide to directors’ responsibilities in Lithuania.

Preferrred shares class and shareholder loans liberalised

The reform gives companies greater flexibility to define the economic rights attached to preferred shares class. The articles of association no longer need to grant such shares priority in dividend distributions and may instead provide for different ranking and distribution rights.

This is particularly relevant to venture capital, private equity and founder financing, where different share classes often reflect distinct risk, return and control profiles. The changes allow greater freedom when structuring share capital in Lithuania, although the rights attached to each class must still be defined precisely in the articles of association.

The reform also liberalises the rules governing shareholder loans. The statutory interest-rate cap has been removed, allowing Lithuanian companies to agree more flexible financing terms with their shareholders. However, market-pricing and transfer-pricing requirements, as well as directors’ duties, continue to apply. A company may also not pledge its assets to secure a loan received from its own shareholder.

Dividends and financial statements: more flexibility

The decision to pay interim dividends may now be delegated to the board or chief executive officer if the articles of association permits it. Interim financial statements must still be prepared, but they no longer need to be approved by the general meeting or audited solely because interim dividends are proposed. The interim statements must be filed with the Register of Legal Entities within 30 days after adoption of the dividend decision.

The reform also allows dividends to be paid from accumulated distributable profits even where the current reporting period produced a loss, provided the company satisfies the applicable capital-maintenance, liquidity and other statutory conditions.

The deadlines for holding the annual general meeting and filing the annual financial statements have been extended from four to five months after the financial year-end. The new timing applies to companies whose financial year ends on or after 1 July 2026. For companies following the calendar year, the first practical application will generally concern their 2026 financial statements, to be approved and filed by the end of May 2027.

Where electronic participation is available to all shareholders, a two-thirds majority may approve a 14-day notice period for an extraordinary general meeting. The general rule remains a 21-day notice period.

What should businesses and investors do now?

As the reform has been in force since 1 July 2026, companies and investors should:

1. Review the articles of association. Redeemable shares and delegated decisions on capital increases or interim dividends require appropriate provisions.
2. Update shareholders’ agreements. Reserved matters, consent rights and exit provisions should correspond with the revised statutory framework.
3. Plan the required reserves. Redeemable shares and financial assistance may require dedicated reserves formed from distributable profits.
4. Reassess financing and exit structures. Existing investment, employee incentive and acquisition structures may benefit from the new instruments.
5. Align governance documents. Board rules, delegations of authority and internal approval procedures should reflect the expanded powers of management bodies.

Why Motieka & Audzevičius?

Motieka & Audzevičius advises international investors, founders, companies and financial sponsors on Lithuanian M&A, venture capital, private equity and corporate matters. Our team assists with transaction structuring, articles of association, shareholders’ agreements, corporate approvals and implementation of the new instruments introduced by the reform.

For cross-border matters, clients benefit from a Baltic one-stop-shop model supported by Skrastiņš & Dzenis in Latvia and TARK in Estonia.

FAQ

When did the Lithuanian company law reform take effect?

The amendments were adopted on 30 June 2025 and have applied since 1 July 2026. The five-month annual reporting deadline applies where a company’s financial year ends on or after 1 July 2026.

What are redeemable shares under Lithuanian law?

They are ordinary or preferred shares classes issued under terms that allow or require redemption in accordance with the company’s articles of assocation. The articles of association must authorise the instrument and establish the redemption procedure. A dedicated reserve is generally required.

Can a Lithuanian company finance the acquisition of its own shares?

Yes. The company may provide a loan or security, subject to shareholders approval, a dedicated reserve, management reporting, market terms and capital-protection requirements.

Can dividends be paid more than once a year in Lithuania?

Yes. A company may pay interim dividends. Further and if its articles of association allow it, the decision may be delegated to the board or, where no board exists, the company’s chief executive officer.

What is a UAB in Lithuania?

A UAB is a private limited liability company and the most commonly used corporate form for privately owned and foreign-invested businesses. Further information is available in our guide to starting a business in Lithuania.

Do shareholder loans have interest-rate caps in Lithuania?

The previous statutory cap has been abolished. The agreed interest rate must nevertheless be commercially justifiable and comply with the arm’s-length principle and applicable tax rules.