Partnership and business formation laws in Lithuania.

Default partnership rules in Lithuania

In a Lithuanian tikroji ūkinė bendrija (TŪB, general partnership), profits are distributed proportionally to each partner's contribution by default (Civil Code Art. 2.67). Partners are jointly and severally liable for partnership debts. The partnership must be registered in the Juridinių Asmenų Registras (Register of Legal Entities). A partnership agreement is required for registration.

In Lithuania, profits are split proportionally to capital contributions by default. This means a partner who invested 80% of the capital would receive 80% of the profits. While this may seem more intuitive than the equal-split default in some countries, it still fails to account for non-cash contributions like time, expertise, and relationships. A written partnership agreement should address all types of contributions.

Uždaroji Akcinė Bendrovė (UAB) in Lithuania

The UAB (Uždaroji Akcinė Bendrovė) is the standard entity for Lithuanian startups. Minimum share capital is €1,000 (reduced from €2,500 in 2023), fully paid at incorporation. Formation costs €200–€500 and takes about one week. No notary is required for online formation. Share transfers require written form. The articles of association (įstatai) govern the company. The MB (Mažoji Bendrija, small partnership) is an alternative with no minimum capital, designed for small businesses with up to 10 members.

Without a shareholders' agreement, the relationship between founders is governed by the country's default rules, which rarely account for the realities of a startup — where contributions change over time and early effort often goes uncompensated. An operating agreement or shareholders' agreement is essential. Use our equity calculator to determine a fair split based on actual contributions.

What happens when a partner leaves in Lithuania

In a TŪB, a partner can withdraw according to the partnership agreement or with six months' notice. For UAB companies, share transfers follow the restrictions in the articles. Existing shareholders have pre-emption rights unless the articles provide otherwise. Minority shareholders can petition for judicial dissolution if their rights are seriously violated.

A written agreement should address departure terms specifically, including how the buyout value is calculated, the payment timeline, vesting schedules, and any non-compete provisions. Understanding the concept of dead equity is important for managing these situations. Learn more about how dead equity affects businesses.

Marriage and business equity in Lithuania

Lithuania uses joint community property (bendro jungtinė nuosavybė) by default. Assets acquired during the marriage are community property. A marriage contract (vedybų sutartis) can establish separate property. The contract must be notarized and registered. Business interests acquired during the marriage are community property. Income from business activities during the marriage is also community property.

Formation and cost details

Frequently asked questions

Related resources

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• Does your small business need an equity agreement?
• Equity for small businesses: the complete guide
• Dead equity calculator: how much is yours costing you?
• Slicing Pie calculator
• What is an operating agreement?
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• US state directory: partnership and LLC default rules