Many business owners starting their own business in Lithuania are often faced with an important decision - whether to establish a Small Business Partnership (MB) or a Private Limited Company (UAB). These two forms of business have their advantages and disadvantages and the most appropriate choice depends on your specific needs and business plans. Below we look at both options in detail to help you make the difficult decision.
Small Community (MB):
The MB is the perfect choice for those who value simplicity and flexibility. It can be set up with minimal formalities and does not have to have a statute. It is an excellent option for small projects, small farms or other small activities. The MB also has reduced administrative duties and tax liabilities, and shareholders are only liable for liabilities up to the limit of their paid-up share capital.
Private Limited Company (UAB):
UAB are a popular form of business because of their reliability and ability to attract investment. It has a clear authorised capital, share structure and other formal elements to be specified at the time of incorporation. An UAB separates business ownership from personal ownership, providing greater protection against debt. It is an excellent choice if you believe in business growth and plan to distribute shares or are looking for investors.
MB if you are planning a small business where administrative flexibility and lower commitment costs are important.
UAB, if you are looking for more business growth, attract investment and want more legal protection.
The information is general and you should consult a lawyer or business adviser before making a final decision.
Good luck in choosing the right business form for you
