Changes to the Law on Companies enter into force on 1 May

2023 05 01

Changes to the Law on Companies will improve the business environment and make it easier for start-ups to attract investment. Furthermore, a greater number of startups and future unicorns will stay in Lithuania. Meanwhile, foreign investors should have fewer arguments to demand startups to incorporate outside Lithuania before attracting investment from global venture capitalists.

Andrius Ivanauskas, partner at WALLESS, recalls some of the key points:

• Law on Companies passed at the end of last year

• provisions liberalizing corporate capital (preferred shares and convertible bonds) come into force on 1 May

• rights granted by preferred shares can be agreed by the shareholders defined by the Articles of Association

• both voting and financial rights attached to the shares can be elaborated

• more flexible rules on the use of convertible bonds, the possibility of postponing valuation of a startup for a later date

• law designed for venture capital investments, but can be used to structure other corporate transactions

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