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The Law Firm Eversheds Saladžius
On 15 May and 5 June 2008 the Parliament has adopted two laws amending the Law on Companies.
The amendments were adopted in order to implement Directive 2006/68/EC of the European Parliament and of the Council of 6 September 2006 amending Council Directive 77/91/EEC as regards the incorporation of public limited liability companies as well as maintenance and alteration of their capital, and to harmonize the provisions of the law with the Law on Securities.
The amendments provide the possibility for companies to exempt from evaluating the contribution other than in cash when the shares are intended to be paid by this contribution in the increase of the company’s authorized capital or when a public liability company acquires assets from the incorporator. Increasing the authorised capital, the contribution other than in cash can be exempt from evaluation when the shares are being paid by the transferable securities or money market instruments which are traded in one or several regulated markets of the Republic of Lithuania, the European Union or European Economic Area member state (the value of such transferable securities or money market instruments is considered to be their weighted average market price within 6 months till the day of payment by such contribution other than in cash) or when the value of the above mentioned contribution other than in cash, except the case mentioned above, has been evaluated by an independent property valuer at least 6 months before the day of payment by such contribution other than in cash. In case of nonperformance of the evaluation of the contribution other than in cash, the report containing information established by the Law must be drafted within 10 days from the day a contribution other than in cash is made.
Moreover, it is established by the Law that in case a company does not perform the evaluation of the contribution other than in cash and circumstances which would significantly change the value of the contribution other than in cash appeared, the shareholders holding at least 5 percent of the shares are entitled to require that the evaluation of the contribution other than in cash would be done by an independent property valuer.
By the Law it is also established that when transforming a public limited liability company into any other legal form of legal entity, an official offer should be submitted only in companies, which are considered as issuers according to the Law on Securities and are supervised by the Securities Commission.
In order to ensure transparency of the securities market and to prevent possible price manipulations, it is clearly stated in the Law that the following property rights of the shareholders:
(1) to receive a part of the company's profit (dividend);
(2) to receive the company’s funds when the authorised capital of the company is being reduced in order to pay out the company’s funds to the shareholders;
(3) to receive shares without payment if the authorised capital is increased out of the company’s funds, except in cases specified in the Law of Companies;
(4) to have the pre-emption right in acquiring shares or convertible debentures issued by the company, except in cases when the general meeting decides to withdraw the pre-emption right in acquiring the company’s newly issued shares or convertible debentures for all the shareholders, shall be granted to the persons who by the end of the tenth workday after the general meeting, which adopted the decision to ensure the above-mentioned property rights, were shareholders of the company.
Other amendments were adopted in order to solve the problems of the practical application of the law and to harmonize the provisions of the law.
The Law Firm Eversheds Saladžius is proud to inform you that it has just completed the overview of the legal environment for Product Liability in Lithuania. The research was ordered and published by London based publishing house the Global Legal Group Limited, issuer of the International Comparative Legal Guide Series, providing international comparative territorial legal surveys covering the key legal practice areas. The Comparative Legal Guide to Product Liability 2008 Lithuania focuses on legal systems on product liability in Lithuania, schemes of compensation, sanctions and procedures in Lithuania. Should you wish to read the Product Liability 2008 Lithuania Guide, please visit homepage of Legal Group Limited www.iclg.co.uk or the website of Eversheds Saladžius at www.evershedssaladzius.lt.
The Law Firm Eversheds Saladžius is proud to inform you that it has just completed the overview of the legal environment for Pharmaceutical Advertising in Lithuania. The research was ordered and published by London based publishing house the Global Legal Group Limited, issuer of the International Comparative Legal Guide Series, providing international comparative territorial legal surveys covering the key legal practice areas. The Comparative Legal Guide to Pharmaceutical Advertising 2008 Lithuania focuses on laws and codes governing the advertising of medicinal products in Lithuania.
The above information appeared in the 2008 edition of The International Comparative Legal Guide to: Pharmaceutical Advertising 2008; published and reproduced with the kind permission of Global Legal Group Ltd, London. Should you wish to read the Pharmaceutical Advertising 2008 Lithuania Guide, please visit the homepage of Legal Group Limited www.iclg.co.uk or of Eversheds Saladžius www.evershedssaladzius.lt.
On 22 May 2008 the Parliament of the Republic of Lithuania has adopted the law amending and supplementing the Enterprise Bankruptcy Law. Most of the amendments and supplements have come into force as from 1 July 2008, however, some of the provisions will come into force as from 1 January 2009, and others – as from 1 March 2009.
In pursuance of acceleration of the bankruptcy procedures of an enterprise and protection of the creditor’s interests, the provisions of the Law, regulating the preparation for the bankruptcy case court hearing, institution of bankruptcy proceedings in court, rights and obligations of the enterprise administrator, simplified bankruptcy proceedings, fraudulent bankruptcy, rights and obligations of the creditors in the bankruptcy case, convention of the creditors‘ meeting, rights of creditors‘ meeting, liquidation of a bankrupt enterprise, the procedure of sale and transfer of enterprise‘s assets, sequence and procedure of satisfying the creditors‘ claims, administration expenses, etc.
In order to protect the proprietary interests of a creditor it has been established that the creditor may apply to the court for initiation of bankruptcy proceedings for the indebted enterprise without waiting the term of three months for performance of obligations is matured as it has been provided until now.
According to the practical implementation of the provisions of the Law, in pursuance of prevention of abuse of rights granted by the Law, the procedural terms for submission of documents to court have been specified.
Quite severe fines – up to ten thousand Lithuanian Litas – have also been established by the amendments for persons who delay bankruptcy proceedings by their actions, including the bailiff. In order to protect the assets of an enterprise which is under bankruptcy proceedings, the Law has been supplemented with the provision that the administrator shall have the right to call a police officer, if he is prohibited from entering the administrated enterprise.
Moreover, the obligation for the bankruptcy administrator to insure his professional civil liability with compulsory insurance has been established, which has not been established until now. The provisions related to the liability insurance of a bankruptcy administrator shall come into force as from 1 January 2009.
The amendments also provide that as from 1 March 2009 bankruptcy administrators will have to follow the provisions of the Code of Behaviour for Bankruptcy Administrators, which will have to be approved by the Government or other authorised institution. Until now no provisions in relation to the Code of Behaviour for Bankruptcy Administrators have been provided in the Enterprise Bankruptcy Law.
The amendments also establish the obligation for the Government of the Republic of Lithuania or other authorised institution to approve the rules on offering the candidacy of the bankruptcy administrator for court and the rules on coordination of candidacy of bankruptcy administrator appointed by court. The Government has also been assigned to regulate the issues regarding the payment of administration expenses when enterprises under or after bankruptcy proceedings have no or not enough recourses to pay these expenses.
By adopting the above-mentioned amendments and supplements to the Enterprise Bankruptcy Law, the Law has been harmonised with the Council Regulation (EC) No 1346/2000 on Insolvency Proceedings and its latest amendments, made on 27 April by the Council Regulation (EC) No 694/2006.
On 11 June 2008 the Minister of Finance of the Republic of Lithuania has approved the Description on Order of the Implementation and Supervision of the Procurement of Legal Entities which are not Purchasing Bodies according to the Law on Public Procurement.
The Description establishes the requirements for procurements performed by legal entities which are not purchasing bodies under the Law on Public Procurement but, implementing the Appliance of the European Union Structural Assistance Strategy in 2007-2013 and the action programmes, implements or intends to implement the projects jointly financed from the European Union funds, except the projects implemented according to the measures on finance engineering.
The Description sets the basic goals and principles of the procurement, the instructions on calculating the value of the intended public contract, the procurement procedure, regulates the conclusion of the contracts, also defines the cases when the regulations are not applicable, for example, when the value of the procurement is less than 10 000 Litas, when the services of the Lithuanian Bank are being purchased. The Description also regulates the supervision of the procurement.
On 19 June 2008 the Securities Commission of the Republic of Lithuania has adopted the amendments to the Rules on Issuance and Revocation of Licences for Financial Brokerage Firms.
The list of operations for performance of which a licence of financial brokerage is necessary is specified by the amendments, providing that the licence must be held for: (1) receipt and transmission of orders concerning the financial instruments to the regulated markets or other places; (2) provision of consultations and investment advice; (3) management of portfolios of financial instruments.
The examination procedure of the finance brokers has been tightened providing for that an applicant who has violated the examination order shall not be evaluated, and that a person who has failed the exam shall not be allowed to retake it during the next examination. The applicant who has failed the exam shall be able to obtain the qualification of a finance broker only by taking the posterior exam.
Some technical amendments have also been adopted in order to clarify some provisions of the Rules and to specify their regulation.