Amendments to the Enterprise bankruptcy law
Amendments to the Enterprise bankruptcy law (hereinafter – “the Amendments”) which entered into force on 1 January 2016, establish the terms during which, after certain circumstances foreseen in the law had happened, heads of enterprises and other persons specified in the law have to file an application for bankruptcy. Furthermore, the Amendments also establish a partially changed procedure of sale of assets in an auction. The Amendments additionally specify what type of assets must be sold in an auction. Moreover, another subject entitled to file an application for bankruptcy is introduced in the Amendments.
In order to achieve swifter bankruptcy procedures so that the creditors of an enterprise (including employees) would be protected from prolonged payments by enterprise in bankruptcy, the Amendments establish the term during which, after certain circumstances foreseen in the law had happened, heads, owners of enterprises or other persons having the right to make a decision in an enterprise have to file for bankruptcy. This amendment to the law is of importance because the wording of the previous version of the law did not foresee terms within which the said action had to be done. It is established in the Amendments, that after the said circumstances had happened, the specified persons have to file an application for bankruptcy without undue delay but not later than 5 days from the day the enterprise became insolvent and the shareholders in the enterprise within minimal terms established by the laws or incorporation documents to convene general meeting of shareholders but not later than within 40 days have not taken any measures to restore the enterprise’s solvency.
Moreover, in order to ensure effective and transparent sale of enterprise’ assets and to remove preconditions for the abuse of procedure, the provisions regulating the procedure for the sale of assets of enterprises and satisfaction of creditors’ claims in the course of bankruptcy has changed. The Amendments establish that not only pledged assets and immovable property has to be sold in an auction, but also any property of considerable value (property is of considerable value if its value exceeds 250 Basic Social Benefits) (excluding animals, perishable goods, securities and pledged assets if the sale of such assets began before the initiation of bankruptcy case). It is proposed that if the assets had not been sold in two consecutive auctions, it then could be sold according to the procedure established by creditors’ meeting in the same scope as it was during the auctions. The new regulation also establishes, that in the cases when the assets are not sold during auction, they are divided in parts thus separating property of low value (and the price set by creditors’ meeting of such assets is below EUR 2000). Having separated the property of low value creditor’s meeting can decide to sell it without auction and in accordance with the procedure established in said meeting. However for property of low value to be sold in such way it must not be pledged and if it is then the selling of such asset must be agreed upon by pledgee or mortgagee.
Moreover, the Amendments expanded the list of persons eligible to file an application for bankruptcy. As of 1 January 2016 application for bankruptcy can be filed and in some cases must be filed not only by creditors’ or head of an enterprise or other persons who have the competence but also by liquidator of an enterprise.
Draft law on Register of foreigners who have interests in Republic of Lithuania
Draft law on Register of foreigners who have interests in Republic of Lithuania (hereinafter – “Draft law”) was adopted. The main objective of this Draft law is to provide possibilities for all foreigners (both citizens of European Union and citizens of third countries) to use electronic services in Republic of Lithuania. Moreover, together with this Draft law, Regulation No. 910/2014 of the European Parliament and of the Council of 23 July 2014 on electronic identification and trust services for electronic transactions in the internal market enters into force thus repealing Directive 1999/93/EB.
This Draft law proposes to regulate registration of foreigners who have interests in the Republic of Lithuania in the Register of foreigners who have interests in the Republic of Lithuania (hereinafter – “the Register”), also the establishment, management and the status of the Register. The Draft law also regulates the obligations and responsibilities of manager of the Register and the processing of data and information of the Register. This Draft law is being implemented in order to start implementation of the project “E.Resident” and to make available (starting from 2016) for foreigners to use various electronic services in the Republic of Lithuania such as administrative, public, commercial services, irrespective of their place of residence or their legal status. The main idea of authors of the Draft law is to promote and facilitate entrepreneurial opportunities for persons who are not staying in the Republic of Lithuania, but have interests here, just like citizens of the Republic of Lithuania. Previous statutory regulation did not provide such opportunities to use electronic services in the Republic of Lithuania for persons who solely have only economic interests and may not even stay in the Republic of Lithuania.
Amendments to the law on Notariate
As of 1 January 2016 Amendments to the law on Notariate (hereinafter – “the Amendments”) have entered into effect, which have established that notaries may also be mediators in civil disputes, moreover it is now established that notaries will have the right to approve documents with an Apostille.
In order to promote mediation and not to undermine the effectiveness of mediation procedures the Amendments foresee the possibility of notaries to be able to assist the disputing parties to negotiate a mutually satisfactory solution in civil disputes (to be mediator). This amendment is of importance because the Law foresees that mediation can be applied in civil disputes (family and other disputes) which can be resolved by civil procedures in the courts. It is also provided that parties of the dispute can make use of mediation both when the dispute is still not being resolved in the court (non-court mediation) and when it is already being resolved in the court (mediation in court). It is established that mediation procedure can begin only when there is a written agreement of both parties. The parties of the dispute jointly appoint mediator whose main purpose is to help the parties to reach peaceful resolution to the dispute. That is the main difference between mediation and arbitration that mediators cannot impose a resolution upon the disputing parties, since they cannot make legally binding decisions and unlike in other forms of alternative dispute resolution (arbitration, etc.) if any settlement is reached, it is simply an agreement signed by the disputing parties.
Furthermore, the Amendments introduce another important development. As of 1 January 2016 notaries acting in accordance with procedure set out by the Government of the Republic of Lithuania will have the right to approve documents with an Apostille. The Amendments change the previous regulation under which, the documents that needed official approval to be used in foreign countries, were approved with an Apostille by the Ministry of Foreign Affairs of the Republic of Lithuania.