Share Capital Restructuring Lithuania
Understanding the Legal Basis of Share Capital Restructuring in Lithuania
In Lithuania, share capital restructuring is governed primarily by the Law on Companies of the Republic of Lithuania. This law sets out strict procedures for increasing, decreasing, or otherwise modifying a company’s share capital. Every action must be registered with the Centre of Registers and, in most cases, approved by the shareholders’ meeting. Legal compliance is not optional—it’s the foundation of a valid restructuring.
When Is Share Capital Restructuring Necessary?
Restructuring isn’t just for companies in trouble. It is essential during:
- Startup scale-ups preparing for investor funding
- Business acquisitions that require equity adjustments
- Financial cleanup following unexpected losses
- Exits or partial withdrawals of investors
- Group reorganization or holding consolidation
Each scenario requires a different legal route, and AM Law ensures the process matches your situation.
Share Capital Increase: Growing Your Equity Base
A capital increase allows a company to boost its registered equity. This can be done through:
- New monetary contributions from shareholders
- In-kind contributions (like real estate or IP)
- Conversion of loans or reserves into capital
- Mergers or acquisitions that involve share swaps
Increasing share capital boosts the company’s creditworthiness, investor confidence, and may even be a legal requirement when onboarding new shareholders.
Share Capital Decrease: Streamlining Your Balance Sheet
On the other side, a share capital decrease can help:
- Offset accumulated losses
- Return unused capital to shareholders
- Remove inactive or outdated shareholding
- Restructure prior to company liquidation
Lithuanian law requires proper creditor notifications, shareholder approval, and transparent financial reporting for this process. AM Law ensures compliance every step of the way.
Nominal Value vs. Number of Shares: What’s Changing?
Not all restructuring means issuing or canceling shares. You may also:
- Reduce the nominal value of existing shares (e.g., from €100 to €10 per share)
- Change the number of shares while keeping the overall capital the same
These techniques are often used in investment rounds or cap table optimization, allowing companies to clean their structure without affecting total equity.
Converting Loans to Equity: Debt-for-Equity Swaps
Especially useful for startups or foreign-funded businesses, this restructuring tool:
- Turns founder or investor loans into official capital
- Reduces liability on the balance sheet
- Boosts capital adequacy for lenders or tender qualifications
AM Law drafts the required resolutions, loan-to-equity agreements, and ensures the conversion complies with both Lithuanian accounting rules and foreign investor reporting standards.
Changing Share Classes or Rights
Companies may wish to:
- Merge preferred and ordinary shares
- Adjust voting or dividend rights
- Add new classes for founders or investors
This often happens in investment rounds or during succession planning. We prepare updated Articles of Association, guide shareholder discussions, and register changes officially.
Cross-Border Share Restructuring: Special Considerations
For foreign-owned Lithuanian companies, restructuring must align with:
- Parent company tax rules
- Group financing policies
- International audit compliance
- Currency exchange reporting
- Anti-money laundering regulations (AML)
AM Law handles cross-border legal coordination, works with your overseas counsel, and prepares all multilingual documentation (LT, EN, RU, PL, etc.).
Share Capital Restructuring in M&A Transactions
Whether you’re buying, merging, or absorbing a Lithuanian company, capital restructuring may be required:
- Before the acquisition (to clean up liabilities)
- During the transaction (to align shareholding)
- After the merger (to simplify governance)
We provide M&A-specific restructuring strategies, coordinate due diligence, and ensure every equity change is correctly reflected in legal and registry records.
Shareholder Protection During Restructuring
Restructuring affects ownership. To protect shareholders, Lithuanian law requires:
- Detailed shareholder meeting minutes
- Transparent notice periods
- Equal treatment in voting and distributions
- Proper issuance or cancellation of shares
AM Law ensures minority shareholder rights are respected, helping avoid disputes or post-restructure claims.
The Tax Implications of Share Capital Restructuring
Every share capital change has tax implications. These may include:
- Personal income tax on capital returned
- Corporate tax on revalued assets
- VAT on in-kind contributions
- Reporting obligations in shareholder countries
We work with local and international tax partners to ensure full compliance and tax efficiency. Our role includes document preparation for tax offices (like VMI) and explanation of consequences to stakeholders.
How Restructuring Affects Your Company’s Public Records
All share capital changes are recorded in the Centre of Registers, visible to:
- Creditors
- Banks
- Investors
- Government bodies
- Auditors
Keeping these records accurate is not just a legal obligation—it’s critical for reputation. AM Law files every detail properly to maintain your company’s good standing.
Post-Restructuring Compliance
After your share capital is restructured, don’t forget the follow-up:
- Update internal shareholder registers
- Issue new share certificates
- Inform tax offices and banks
- Adjust corporate governance policies
- Amend investor agreements or bylaws
AM Law provides complete post-change support, making sure your company is fully aligned with its new structure.
Why Clients Choose AM Law for Share Capital Restructuring
We combine legal precision with business insight. Our clients trust us because:
- We explain legal concepts in business terms
- We act quickly and keep the process transparent
- We ensure no detail is overlooked
- We support international coordination
- We tailor everything to your specific goals
Whether you’re restructuring to grow, scale back, or prepare for new ownership—AM Law is your partner at every stage.
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