Legislation update

The statutory prohibition for limited liability companies to distribute bonds publicly has been repealed  by amendments adopted on 16 June 2016 to Articles 55 and 78 of the Law on Companies. Starting from 1 November 2016, when this Law will enter into force, after complying with certain conditions specified in the Law a private limited liability company will have the right to distribute bonds, save for convertible bonds, publicly.

Also, on 16 June 2016 a new Law on Protection of Interests of Holders of Bonds Issued by Public Limited Liability Companies and Private Limited Liability Companies was passed. This Law is aimed at protecting interests of bond holders, including those holding convertible bonds, while liaising with public limited liability companies and private limited liability companies and assuring that a public limited liability company or a private limited liability company fulfils its obligations to the bond holder set in the decision to issue bonds or in any other document. The Law provides that before public distribution of the bonds takes place a private limited liability company will have to enter into a civil contract with a fiduciary of the bond holders for representation of their interests. Financial brokerage companies, auditors and bankruptcy administrators will have the right to act as such fiduciaries of the bond holders. The law will also enter into force as of 1 November 2016.

If you have more questions, you are welcome to contact Professional Association of Advocates “Šulija Partners Law Firm Vilnius” by e-mail at info@SulijaPartners.com or telephone at +370 52 055 116.

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