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policy. The Civil Code does not provide for any compulsory
insurance sum thus, it is for the principal to decide
whether amount of the agent’s insurance sufficiently covers
the potential risks.
The main obligation of an agent is to act in good faith
and dutifully in performing the principal’s instructions,
to be loyal and take good care of the principal’s interests.
The agent may undertake not to compete with the
principal; however, such an undertaking will be binding
on the agent only if it is expressly provided in a written
contract.
In protection of the agent’s interests, the Civil Code entitles
the agent to exercise a lien on the merchandise of
the principal in case of failure by the principal to pay the
agent’s commission on time. Besides, the agent is also
entitled to demand the audit of the principal if a dispute
regarding the correctness of calculation of the commission
arises.
The agent is entitled to the commission on the concluded
transactions as well as transactions concluded by the
principal in result of the agent’s activities. The parties
Table of Comparison between Private and Public Companies
Invest in Lithuania
may agree that the agent’s remuneration is due only if
the transaction is performed by the third party or make
the agent’s remuneration dependant on the scope of the
agent’s performance. The agent is also entitled to additional
remuneration (del credere) if it guarantees such
due performance of the transaction by the third party.
Notably, the agent’s commission does not include the reimbursement
of the agent’s expenses incurred in relation
to performance of the assignments; therefore, such expenses
must also be compensated by the principal.
Although the parties may agree on the deadline and procedure
for payment of the commission, however, in any
case, the commission becomes due upon execution by the
third party of its part of the transaction and must be paid
by the end of the third month thereafter at the latest. In
case the payment of the commission is subject to the execution
of the transaction by the third party, the agent is
entitled to claim an advance payment, which cannot be
less than 40% of the commission.
An agency contract concluded for an indefinite period
may be terminated by prior notice of either party. The
Attribute Private company Public company
Minimum authorized (share) capital LTL 10,000 (app. EUR 2,900) LTL 150,000 (app. EUR 43,450)
Maximum number of shareholders (if any) 249 Not established
Minimum number of shareholders (incorporators) 1 1
Liability of shareholders Limited 1 Limited 1
Way of formation of the authorized capital Both monetary and non-cash contributions
are acceptable
System of corporate bodies Obligatory corporate bodies: General Meeting
of Shareholders and Head of the Company
(CEO). Optional corporate bodies: Board and
Supervisory Council
Both monetary and non-cash contributions
are acceptable
Obligatory corporate bodies: General Meeting
of Shareholders and Head of the Company
(CEO). Optional corporate bodies: Board and
Supervisory Council 2
Registration of shares with the Securities Commission Not applicable Compulsory (with certain exceptions)
Public trade in securities Prohibited Allowed
Reporting /disclosure requirements No reporting is required;
basic disclosure to the State authorities
Supervision by the Securities Commission Not applicable Applicable
Reporting on annual basis (by drafting annual
report-prospectus);
public disclosure of all material events;
basic disclosure to the State authorities
Share accounting Performed by the company itself Requirement to outsource a share accounting
company
Audit Obligatory only if special criteria are met Obligatory
1 However, if a company becomes unable to perform its obligations due to unfair actions by its shareholder, the shareholder
may be held subsidiary liable for the obligations with his/her/its personal property.
2 According to the Corporate Governance Code of Lithuania, it is advisable for public companies to have both optional
corporate bodies formed as mentioned above.