Establishment of a Small partnership

Establishment of small partnerships

The establishment of a limited liability partnership is the process of registering a small partnership, a legal entity with limited civil liability, through the State Enterprise Center of Registers. No authorized capital is required for establishment, documents can be signed using a mobile signature, and the manager of the limited liability partnership works under a civil service contract without entering into an employment relationship.

How does the MB establishment process work?

The process of establishing a private limited company takes place in stages – from the preparation of documents to registration at the State Enterprise Registers Center.

1. Prepare incorporation documents

The establishment of a small partnership begins with the preparation of the legal basis:

• To draw up a deed of incorporation when there is 1 founder.
• To conclude a founding agreement when there are several founders.
• The regulations of the small partnership have been prepared, which determine the management model, the rights and obligations of members, the amounts of contributions, the procedure for distributing profits, and the conditions for accepting and withdrawing members.
• Form management bodies – choose a management model (members’ meeting and (or) MB manager) and describe it in the regulations.

Properly drafted regulations ensure the smooth establishment of a MB and reduce the risk of future disputes.

2. (Optional) Reserve a company name

• Submit an application in the JAR-5 form for the temporary inclusion of the name in the Register of Legal Entities.

3. Submit documents to the Center of Registers

• Submit the prepared documents to the State Enterprise Centre of Registers through the self-service system or in another established manner.
• Pay the fees of the Center of Registers according to the selected registration service.
• Obtain confirmation of registration – MB is considered established from the moment of registration in the Register of Legal Entities.

4. Complete the required steps after registration

• Submit MB members’ data to JADIS within the specified deadline. Submit MB members’ data to the JADIS system within the specified deadline
• Pateikti naudos gavėjų duomenis į JANGIS (kai taikoma) ir patvirtinti juos kvalifikuotu elektroniniu parašu.Pateikti naudos gavėjų duomenis JANGIS ir patvirtinti juos kvalifikuotu elektroniniu parašu.
• Open a company bank account to separate personal and company funds and ensure transparent accounting and billing.

MB taxes: basic principles

Income tax

• The standard corporate tax rate is 17%.
• A preferential rate of 7% applies to small businesses that meet the criteria set out in the law (e.g. annual revenue limits).

VAT (value added tax)

• VAT registration is mandatory when taxable income during the previous calendar year did not exceed the threshold of EUR 45,000. In certain cases, registration is also necessary even if this threshold is not exceeded, for example, when purchasing goods or services from EU countries.

PSD and VSD contributions

• PSD (compulsory health insurance) and VSD (state social insurance) contributions are paid from the funds withdrawn by the MB member for personal needs.
• If the MB member does not withdraw funds for personal needs, the VSD obligation does not arise.
• PSD is paid monthly if the member is not insured on other grounds.