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Business Law Group "FORESTA"
On 27 December, 2002, Amendments of the Company Law of the Republic of Lithuania (Zin. 2002, No. 124-5628) came into force and changed the rights of minority shareholders in joint stock companies. Pursuant to the Amendments the following rights of the shareholders can be exercised not with 1/20 of votes but with
- 1/10 of all votes in a company in order to propose extra issues to the agenda of the general meeting of shareholders;
- 1/10 of votes present in the general meeting in order to appoint a representative to sign the minutes of the meeting (the minutes must be signed not within 3 workdays but within 7 calendar days);
- 1/10 of all votes in a company in order to oppose the election of individual board members and demand electing the whole supervisory board after a member of the supervisory board due to resignation, withdrawal or other reasons stops executing his/ her duties.
Shareholders possessing no less than 1/10 of all votes have the right to conclude a contract with an audit company to inspect the companys activities and accounting records.
The company has an obligation to provide a shareholder with a possibility to review the documents or to submit the copies of the documents provided by the law no later than within 7 calendar days (earlier within 5 workdays) after it receives the written request from a shareholder.
From now on the shareholders who possess more than 1/10 shares (earlier more than 1/2 shares) and have given a written promise prescribed by the company not to spread confidential information will have the right of access to all documents of the company.
NOTE: Notwithstanding that the Company Law of the Republic of Lithuania does not stipulate that companies must adjust their articles of association in order to harmonies them with the above mentioned amendments and to register them in the Companies Register, these provisions of the law are mandatory to all companies from the date of coming into effect of the law. In addition, it is noteworthy that the companies which have not adjusted their articles of association according to the Company Law of the Republic of Lithuania of July 13, 2000 and have not registered their articles of association in the Companies Register must do this by July 1, 2003. Paragraph 2 of Article 172 of the Code of Administrative Law Infringements of the Republic of Lithuania provides that a fine from LTL 500 up to 5,000 could be imposed upon the head of administration of the company for failure to adjust and to register the articles of association of the company.
The Parliament of the Republic of Lithuania adopted the Amendments of the Law on Bankruptcy (Zin., 2002, No. 116-5193, and No.124-5657). According to the Amendments the Law is supplemented by Section 4-1 regulating a simplified bankruptcy process, when the procedures of the companys bankruptcy are executed by the court order if the company does not have any assets or they are not sufficient to cover legal and administrative costs. Such process cannot last longer than one year after the decision to implement a simplified bankruptcy process comes into effect. During a simplified bankruptcy process the bankruptcy procedures, i.e. liquidation of the company, should be implemented. Executing a simplified bankruptcy process the issues of selling the assets subject to the competence of the creditors meeting are solved by the court and the creditors meetings are not convoked. Amounts received from realisation of the assets and creditory claims are set to cover legal and administrative costs. If, after commencing a simplified bankruptcy process it appears that from the realisation of assets obtained amounts are twice as large as is sufficient to cover legal and administrative costs, the court orders to discontinue implementing a simplified bankruptcy process and to execute the companys bankruptcy procedures following the common proceedings for bankruptcy cases in the court.
On 1 January, 2003 Amendments of the Law on Restructuring Companies (Zin., 2002, No.116-5194) came into effect following which the resolution of the first meeting of creditors, attached to the petition to the court on commencing a case of restructuring the company apart from the other information must contain the temporary remedies of the creditors as provided by Article 5 of the Code of Civil Procedure of the Republic of Lithuania together with the data of the principal creditors for urgent contacts. Following the new provisions of the Law on Restructuring Companies, the court informs the company and its principal creditors about its decision to commence or refuse to commence a case of restructuring the company not later than 1day after the decision was passed. The court decision to commence or refuse to commence a case of restructuring the company comes into effect 10days after it was ruled, provided it is not appealed during this period.
The Parliament adopted Amendments to the Law on Foreign Currency in the Republic of Lithuania (Zin., 2002, No. 105-4687) (hereinafter ñ the Law). The Amendments allow the use of foreign currency for payments not only to the persons from foreign countries. Paragraph 3 of Article 3 stipulates that foreign currency can be used for non-cash payments if the parties agree to do so and the EU currency euro for cash payments as well. Also those natural and legal persons of the Republic of Lithuania who want to open accounts in foreign currency and keep their deposits abroad following the regulations in the corresponding countries will not have to obtain a permission from Lithuanian Bank.
In reference to the Law Lithuanian Bank accepted that some of the resolutions of the Board of Lithuanian Bank are no longer effective, namely, those regulating the order of issuing permissions to open accounts in the banks abroad, opening and disposing of current accounts and time deposits in foreign currency, executing transactions in foreign currency in banks of Lithuania, standard work rules for exchange bureaus of the credit institutions, buying, selling and exchanging currency.
The Parliament adopted the Law on the Amendment of the Article 26.1 of the Law on Tax Administration of the Republic of Lithuania (Zin., 2002, No. 112-4968). It stipulates that natural persons of Lithuania must notify the central tax administrator about opening or closing accounts abroad following the order and term set forth by the Government or its authorised institution. The Law came into effect on January 1, 2003. Notification order for legal persons has not been changed.
On January 1, 2003 the Design Law of the Republic of Lithuania (hereinafter the Law) came into effect (Zin., 2002, No. 112-4980). It regulates the legal protection, registration and use of industrial design in Lithuania as well as the order of design registration.
The new Law defines the main concepts regarding design, provides the detailed requirements for the product image to be accepted as a design and also the basis for refusal to register the design or the annulment of the design registration. The Law stipulates the procedure for design registration from application to the removal of the design from the Design Register of the Republic Lithuania, details the provisions regulating the object of the design register of the Republic of Lithuania as well as the order for obtaining, compiling and processing registration data, indicating alterations and removal from the register. The Law also stipulates that some of the provisions regarding registration of a design with the State Patent Bureau will be regulated by the rules approved by the director of the State Patent Bureau.
The Law sets forth special provisions regarding assessment of damage and calculating the compensation, also specifies remedies.
It is noteworthy that the design, for registration of which a person had applied before the Law came into effect, will be registered following the provisions of the Law on Industrial Design effective till January 1, 2003 and the rights related to this design will be protected according to the provisions of the Law.
On January 1, 2003 the Order of Issuing Business Certificates to the Residents and the List of Activities to be Undertaken under a Business Certificate approved by the Resolution of the Government (Zin., 2002. No. 112-4992) comes into effect. The issued business certificate to undertake a certain activity grants the right to undertake the activity indicated on a business certificate (without limitation of the territory unless the List of Activities which Can be Undertaken Having Obtained a Business Certificate provides otherwise); to sell outwork goods or to provide services to residents, companies, institutions and organisations.
The issued business certificate grants the right to sell outwork goods to residents, but with certain restrictions: a business certificate for commercial activities does not grant the right to sell cars, sugar or to trade from the temporary stalls in the buildings, etc. A business certificate does not grant the right to undertake activities subject to the licences.
The Resolution No. 1689 (Zin., 2002. No. 104-4646) of the Government of the Republic of Lithuania changed the order of Removing of Restructured and Liquidated Companies from the Companies Register. Following the new regulations from July 1, 2003 removing a liquidated company from the Register it will not be required to submit a settlement certificate from the State Social Insurance Fund Board or its division. Removing a public stock company from the Register the decision of the Securities Commission to cancel registration of the companys shares must be submitted. The requirement to submit the restructuring project of a company which was liquidated after the restructuring to the manager of the Companies Register was cancelled as well. The provision for the company which after restructuring was liquidated as a legal person to be removed from the Register only after registration of the companies which became its assignees of rights and obligations (including due payments to the budget of the State Social Insurance Fund, the sums, fines and default interests from them calculated by the officials of the tax administrator and other state institutions) is no longer effective.
Taking into account the alterations in the documents of the World Intellectual Property Organization and the comments of the European Commission experts, the Parliament of the Republic of Lithuania have adopted the amendments of several articles of the Law on Trademarks of the Republic of Lithuania (Zin., 2002, No. 106-4744) (hereinafter ñ the Law). In order to unify the owners of nationally or internationally registered trademarks rights to apply for an extension of a term, to the owner of a trademark or an international registration, who has submitted a written application and paid a fee, the terms regarding the repeated expert examination, submitting an appeal or other terms as provided by the Law can be extended only once and no longer than for 2 months after the first term expires. In addition, such application must be submitted during 2 months after the first term expires. The amendments will enable the applicant or the owner of a trademark to apply for a later territorial expansion either by applying to the service in the country of origin (the State Patent Bureau) or directly to the International Patent Office. If the owner of the international registration of a trademark does not agree with the decision of the repeated expert examination, s/he can appeal to the Department of Appeals within 3 months after this decision was sent. The owner of the international registration of a trademark which was protested must appoint a representative and submit a rational answer to the protest within 5 months following the date indicated on the refusal to grant the protection (earlier within 5 months after the protest was submitted).