Equal treatment in Lithuanian corporate law

ENFirst of all, it should be noted that the practice of applying the principle of equal treatment of shareholders is not developed in Lithuania. This principle was established in Law on Companies of the Republic of Lithuania (hereinafter – the Law on Companies) as late as in 2000, when the provisions of Lithuanian Law on Companies were harmonized with the European Union Company Law directives within the implementation of the measures of the programme for Lithuania’s accession to the European Union. Thus, following the Article 42 of the 2nd Company Law Directive (the Capital Directive), the current wording of the Article 3(2) of the Law on Companies has been formulated, which declares that “[u]nder identical circumstances, all shareholders of the same class shall have equal rights and duties”. However, until now, the principle of equal treatment of shareholders has not been more widely applied or interpreted in the case law of the Supreme Court of Lithuania – it was discussed merely in two resolutions. In one of the resolutions (the company’s name was UAB Renalvita), the Supreme Court of Lithuania acknowledged a violation of the principle of equal treatment of shareholders, when one of two shareholders owning 50 percent of the company shares, due to his position at the company, had the right to access all information, and the other shareholder did not. In another case (the company’s name was UAB Europa Group), the Supreme Court of Lithuania argued that the company is a legal entity created on the basis of shareholders’ transactions and, unless otherwise agreed by the shareholders, acts on the principle of equal treatment of shareholders. According to the court, this principle is incompatible with the situation in which the new director of the company has not been elected due to the lack of a majority of the shareholders’ votes and the previous director continues the activity.