Home Plan Plan Business Steps To Starting A Business
Updated: 2015-03-13 15:18

Steps To Starting A Business

  1. Choose your business form
  2. Check the requirements (permits) for your activity
  3. Get permits using the Message Box
  4. Evaluate perspectives and results of your planned business

CHOOSING YOUR BUSINESS FORM

There are two ways of conducting business in Lithuania:

  1. Establishment of a company
  2. Implementation of individual activities.

The decision on the form of activities can be made based on the following criteria:

  1. Nature of business. The decision depends on planned business activities, i.e. on the complexity of activities and on other circumstances related to the planned specific activities.
  2. The amount of the available capital. When establishing legal entities of certain types, the founder of a legal entity must obtain an established amount of the authorised capital.
  3. Taxes. The amount of taxes directly depends on the form of activities a person has chosen.
  4. Degree of personal liability. If a person intends to limit his liability for business failures with his personal or family property, he should choose legal entity of limited civil liability.
  5. The number of founders. If there are several or more interested persons wishing to jointly conduct business activities, they should establish a legal entity for these business activities.
  6. The degree of complexity of business activities. Conducting individual activities is easier, i.e. no management structure for a legal entity is required, and there is no need to perform other formalities necessary for legal entities.

 

Comparison of individual activities with business activities of a legal entity

 

Individual activity

Activities performed by a legal entity

1. Incorporation procedures

Documents for submission: fewer documents are required for submission; these documents are simple and require no special knowledge to produce them.
 

Costs: minimum.

 

Time resources: 4 to 10 working days.

Documents for submission: the list of required documents is considerably bigger. The majority of incorporation documents must be certified by a notary.
 

Costs: notary fees, duties paid to the Centre of Registers, etc.

 

Time resources: 2-3 weeks.

2. Requirements and preconditions for the launch of activities.

The authorised capital: this requirement is not relevant, since the legal acts do not specify any requirements related to solvency (the available assets).

Staff employment: a person may act on his own (however, legal acts provide for a possibility for employing other employees).

The authorised capital: legal acts specify the required amount of the authorised capital.

 

Staff employment: more employees, are usually required, therefore, it is necessary to conclude job agreements with them.

3. Business activity termination options

Usually it is not difficult to terminate business activities irrespective of the person’s liabilities.

Activities conducted by legal entities are terminated through reorganisation or liquidation. The procedure of termination of business activities lasts longer, because the legal entity must meet all its commitments.

4. Requirements for the implementation of business activities

Activities: limited choice of activities.
 

Safety at work: no legal regulation is applied.

Activities: any legal activities may be conducted. Certain activities may require certain authorisations.

Safety at work: legal acts provide for conformity with the requirements for safety and health at work.

5. Accounting procedures

Simplified accounting procedure.

More sophisticated and thoroughly regulated accounting procedure.

6. Taxes

Key payable taxes: personal income tax, compulsory health insurance contribution, SODRA contributions.

Apart from the key taxes (personal income tax, compulsory health insurance contributions, SODRA contributions), income tax, contributions to the guarantee fund, and other payment are imposed.

7. Scope of business activities

For micro-business purposes.

Possibilities for a large-scale business exist. More suitable seeking to attract additional investments or capital from outside.