Accounting Memorandum and Tips for Starting a Small Partnership in Lithuania

"Business start - ups are more likely to choose a small partnership (MB);

    MB registered 4,300 in the first half of this year, compared to 3,100 for private limited companies (UAB), according to the data of the Center of Registers.

 

    If you decide to start a business and set up a MB, you can do so electronically in the Registry Self-Service system.

    For example, Ieva Kaukėnė, the executive director of accounting services buhalterės.lt, points out that 1 Eur is enough for the registration of MB's authorized capital. MB members can also work without employment contracts, without a work schedule. An audit is not required and the accounts may be kept by the MB members themselves and by the accountant.

    I. Kaukėnė names the most important MB accounting rules and advises start-ups.

 

    Invoices issued

    From the first day after MB is set up, customers can start invoicing. If you will be working with foreign clients, it is advisable to use bilingual invoices.

    "It is necessary to know that the numbering of invoices must be consecutive. You can also have several series of letters or numbers for invoices,” - I. Kaukėnė points out.

 

    Invoices received

    

    Once the business is up and running, you can buy the services or goods your business needs. It is important to take care of the purchase documents - they must contain the details of the company that you buy from.

    "For example, if you refuel at an automatic gas station, the check will have to have a company code," - says I. Kaukėnė.

 

    Civilian management contract

 

    I. Kaukėnė points out that it is worth concluding a contract with the head of MB. The fees for the money paid out in this way are the lowest - from 15%.

 

    PSD (compulsory health insurance) and SSD (state insurance)

 

    Sodra may have to pay PSD and SSD fees from the very first month of operation. I. Kaukėnė reminds that they are applied individually.

 

    "MB members apply these fees individually and require very careful consideration of different situations. However, with the help of online calculators, you can quickly check the amount of contributions you will have to pay, ”advises the head of buhalterės.lt.

 

    Value Added Tax (VAT)

    

    Before starting a business, she advises to find out voluntarily whether for the MB is it worth registering for VAT on a voluntary basis. It often becomes useful when the main customers are also VAT payers. However, it is important to consider other circumstances as well.

 

    Accounting

 

    The choice of who will keep the accounts may depend on the size of the MB.

    I. Kaukėnė points out that if MB has employees working under an employment contract or is a VAT payer, it is worth having a permanent accountant who will take care of the calculation of monthly taxes and declarations.

 

    "If you work without employees and you are not a VAT payer, you can apply to an accountant only in January of the next year, as MB has an obligation to submit a balance sheet for the previous year by the end of March next year," - I. Kaukėnė points out. - "Depending on the amount of documents, the accountant will estimate how much it will cost to keep the accounts. The preparation of annual financial statements for such MBs usually costs up to EUR 200 on average.""