Public institution

Public institution

A Public Institution (PI) is a non-profit public legal entity with limited liability, established to serve the public interest by carrying out activities that benefit society.

A Public Institution may be founded by one or more natural and/or legal persons. There is no limit on the number of founders.

A Public Institution can be established electronically using the standard incorporation documents through the English version of the Centre of Registers Self-Service System.

More information about legal entity incorporation procedures is available on the Centre of Registers website (English).

Before starting the incorporation process, it is necessary to reserve the name of the legal entity through the Centre of Registers Self-Service System.

Advantage:
  1. Limited civil liability – a stakeholder is liable only to the extent of the assets contributed to the Public Institution, thereby protecting their personal assets.
  2. No minimum share capital requirement – unlike a Private Limited Liability Company (UAB), which requires a minimum share capital of EUR 1,000.
  3. Tax benefits for non-profit entities – non-profit organizations may reduce their taxable profit by the amount of funds directly allocated (i.e., actually incurred during the current tax period) or planned to be allocated within the following two consecutive tax periods to activities serving the public interest.
  4. A Public Institution may engage in commercial activities, provided that such activities support its objectives and are permitted by law.
  5. A Public Institution may receive donations and sponsorship from legal entities, as well as up to 1.2% of personal income tax contributions designated by individual taxpayers.
  6. Possibility to withdraw from the organization by transferring stakeholder rights to other persons in accordance with the applicable legal requirements.
  7. Opportunity to attract additional funding by admitting new stakeholders to the Public Institution.
Disadvantages:
  1. Profits of a Public Institution cannot be distributed to its stakeholders. Therefore, stakeholders may receive funds from the institution only through lawful payments, such as salaries for work performed or other payments permitted by law.
  2. A Public Institution cannot be reorganized into a Private Limited Liability Company (UAB).
  3. A Public Institution may engage only in the activities specified in its Articles of Association and must operate in accordance with its stated objectives and purposes.
Naudinga informacija: