Pathway to access
The jurists claim that a liability to coordinate the names of the companies being newly incorporated with the linguists may discourage people from incorporating businesses in a more convenient and faster way – via internet. The reason is that when establishing a company not via electronic means, but through an assistance of a notary, it is possible to avoid verification of the linguists.
Dovilė Burgienė, a partner of the law firm LAWIN fears that the new order may reduce the percentage of people establishing the companies electronically. According to her, the Center of Registers, must contact the State Commission on the Lithuanian Language (SCLL) only in certain cases, including when an entrepreneur directly contacts the register in connection with registration of a name of the company, prior to the notary having approved the documents.
In short, SCLL is only contacted in cases when an entrepreneur reserves a name of the company via the internet.
“After the notary certifies a deed of incorporation, a registrar will register the company at the incorporator’s choice and will not be obliged to contact SCLL. Therefore, an ambiguous situation might develop when a registrar refuses to temporarily register a specific name of the company, as non-complying with the norms of Lithuanian language, however, a notary public will confirm the deed of incorporation with the same name at a later time and the registrar will register the company. Who in this case will be willing to set up the company via electronic means?” – states Mrs. Burgienė.
Representatives of the Center of Registers (CR) avoid a direct response, to the question asking if a company is established not via electronic means, but through the notary, is it possible to register a name of the company, non-complying with the norms of Lithuanian language, for ex., English?
Aidas Petrošius, the representative spokesman of CR, informed the VŽ, that registration procedures for the companies being incorporated via the notary have not changed.
“Provided a company is incorporated via the notary, the same notary shall be held in charge for investigation of the company’s documents being incorporated; CR is not liable to question decisions made by the notary. If a notary did not have any objections to the name of the company, it is automatically registered”, - stated Mr. Petrošius.
Proposal of the Notaries
Marius Stračkaitis, the President of the Lithuanian Chamber of Notaries, a notary of Klaipeda city, informed the VŽ that an opinion that incorporation and registration of the company by the notarial act may benefit in avoiding verification of linguists, is completely unsubstantiated.
“The notaries are in a position of ensuring that the laws are being followed. The notary will recommend the incorporators of the company or other legal entity to reserve a name for the company at the Center of Registers and thus ensure that a company in the process of incorporation would not be registered under the already existing name. At the time the Center of Registers performs a reservation of the name and a verification of linguists is also performed simultaneously. Provided that the incorporator disregard the present recommendations of the notaries and request the notary to incorporate the legal entity under the desired name, and later on it would develop that such name of the company does not comply with the requirements, the deed of incorporation should be approved all over again”, - he claimed.
The numbers are not reducing
Incorporation of the majority legal entities is confirmed under the notary’s order, except in cases when a company is incorporated following typical documents of incorporation by the electronic means.
The statistics say that today a number of companies in Lithuania are incorporated via internet, for example, more than half of all of the JSC being incorporated. Unease is sensed that such state’s investment into a technological advancement might not pay off, provided that incorporators of the companies will be assured that electronic registration is not so convenient and fast compared to the rest of methods of incorporation. In fact, according to the data of CR, reduction in a number of companies being incorporated electronically so far has not been witnessed.
“However we almost daily face complaints from different entrepreneurs regarding a present procedure and allegations of looking into a possibility of establishing a business in countries with less obnoxious requirements”, - admits Mr. Petrošius.