Print page Send link

Stock sale and company sale

The value of acquisitions is often reduced by misleading due diligence, inappropriately allocated risks and poorly drafted transactional documents. We understand that it is critical for a buyer to collect sufficient information about the target, its obligations, and other relevant legal risks. On the other hand, it is also critical for a seller to prepare company for sale properly and so avoid possible claims for undisclosed liabilities. We help our clients to mitigate these risks. In particular we:

Knowledge & Insights

Stock Sale

In most cases, targets are acquired in Lithuania by selling their stock. The stock sale agreement must specify  the name, legal form, incorporation number and registered office of the target, number, class and nominal value of the shares transferred. The seller usually informs the general manager of the target about the consummation of a stock sale agreement by providing him with one original copy of the stock sale agreement. After the closing, the general manager of the target (or the brokerage house, if assigned) must record the transfer of shares on the relevant security accounts and file the list of new shareholders to the Register of Legal Persons.

As of 1 January 2015, the stock sale exceeding 25% of all shares or when the purchase price of the stock on sale exceeds €14,500 must be approved by a public notary. However, this is not applicable when the stock security accounts are managed by professional brokerage houses in accordance with applicable national securities laws. Also, the Lithuanian laws permit the parties to contract out the Lithuanian law, unless this law must be applied by reason of applicable overriding national requirements. 

Company Sale

Under the sale of a company shall be deemed the sale of a bundle of proprietary rights and transfer of relevant obligations to the buyer, except whose rights that may not be assigned to third persons. The owners of the target still control the target and are authorized to received dividends, however, the goodwill of the company is vested in the new owner. The right to a company name, its trademark or other rights possessed by a seller reason of a license agreement shall be transferred to the buyer along with other property. The company sale agreement must be concluded in writing and approved by a public notary. The agreement may be used against third persons only if it was properly disclosed in the public register. The company sale agreement must have certain exhibits:

Šulija Partners Law Firm Vilnius, registered office Jogailos street 4, 3rd floor, Vilnius, LT-01116, Lithuania, fax +370 52051926, e-mail: info@SulijaPartners.com

Contact details | Sitemap | Know your customer | Privacy policy | Feedback | Links | Terms and Conditions | Attorney advertising | Copyright Back to the top