Redeemable Shares, Financial Assistance & Governance Reform: Key Legal Changes for 2026

On 30 June 2025, the Lithuanian Parliament adopted amendments to the Law on Companies which aim to enable more efficient company management, more flexible forms of capital raising, and more modern investment structures. Below, we outline the main amendments that will come into force from 1 July 2026.

1. New Opportunities for Companies – Redeemable Shares Legalized

One of the key innovations is the introduction of redeemable shares. These shares are issued for a limited time, after which the company must redeem them. This model has long been used in other jurisdictions, especially in common law countries, and has frequently been utilised in Lithuania through shareholder agreements on share buybacks.

The regulation includes safeguards:

• Such shares may only be issued if there are also non-redeemable shares issued;
• A redeemable shares reserve must be formed from distributable profits;
• The redemption price must be paid to the holders within a maximum of 12 months.

This will allow companies to plan their capital structure better, and provide investors with a clear exit strategy.

2. Financial Assistance for Share Acquisition – Clear Regulation

The amendments legalise financial assistance for acquiring company shares. A company will now be allowed to grant a loan or secure obligations for such purposes, but only under strict conditions:

• A separate financial assistance reserve must be formed for the duration of the transaction;
• The decision must be made by the general shareholders’ meeting;
• The company’s board or CEO must submit a written report explaining the reasons for the transaction, the company’s interest in it, its impact on the company’s liquidity and solvency, and the share acquisition price;
• The transaction must be conducted on market terms;
• The financial capacity of the counterparty to fulfil the transaction within the agreed time frame must be assessed;
• If assistance is provided to management bodies or the parent shareholder, the decision must be based on a written expert opinion confirming the transaction’s compliance with market terms and the company’s interests.

3. Growing Significance of Management Bodies

Certain decisions, previously within the exclusive competence of the general shareholders’ meeting, may now be delegated to the board or CEO (if no board exists):

• Share capital increase – for up to 5 years, if provided for in the articles of association;
• Interim dividends – if foreseen in the articles of association, and a maximum amount is set.

The following are also being removed:

• The obligation to approve interim financial statements at the general meeting and to perform an audit;
• The ban on borrowing from shareholders at interest rates higher than the average market rate in commercial banks at the company’s business location.
• Before borrowing, the CEO or board must evaluate the justification for the interest rate and its impact on the interests of other shareholders and creditors.

4. Changes in Shareholders’ Meeting Procedures

The law amends requirements related to general shareholders’ meetings:

• The deadline for approving annual financial statements is extended to 5 months (this applies from 2027);
• Capital reduction decisions may be adopted not only at the regular general meeting;
• The notification period for meetings is shortened from 16 to 14 days when participating and voting via electronic means;
• Dividend distribution restrictions are eased – if profits from previous years are retained, dividends may be paid even if there is a loss in the most recent year. Companies may distribute dividends based on accumulated undistributed profits from previous reporting periods, used to cover losses of the current financial year or a shorter period;
• A liquidation report will no longer need to be approved by the general meeting if the company is being liquidated not at the shareholders’ initiative.

5. Changes to Board Election Procedure

The right of a minority shareholder holding at least 10% of votes to demand re-election of the entire board when individual board members resign is abolished. Additionally, a collegial body of the company (supervisory board or board) or its  members may start their duties not only immediately after the meeting/session that elected them, but alsoon a later date specified in the resolution.

These measures will facilitate the growth of startups, support investment transactions, and strengthen companies’ ability to compete in the European capital market. Contact the experienced ECOVIS ProventusLaw team – trusted advisors in corporate governance, structuring, and compliance for strategic guidance and expert support in implementing these corporate law changes.