In accordance with Article 26 of the Law on Public Institutions, a public institution may be reorganized into a budgetary institution, an association, a public or private limited liability company (hereinafter – the company), a small partnership, as well as a charity and support fund.
Pursuant to the requirements of legal acts, before reorganizing a public institution into a private limited liability company (UAB) or a small partnership (MB), all claims of the public institution’s creditors must be satisfied in accordance with the procedure established in Article 2.113 of the Civil Code.
After satisfying all creditor claims, the property owned by the public institution, except for received donations or support, shall be transferred to the ownership of the UAB or MB as a contribution to the formation of the company’s authorized capital.
The support received by the public institution before reorganization shall be used in accordance with the procedure established by the donor. If the donor or the person transferring the funds does not specify the purpose for which the support must be used, such support and funds shall be used in accordance with the support management rules approved by the general meeting of participants.