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1. What types of commercial companies can be created in Romania?
The types of commercial companies that can be created in Romania are specified in the Law 31/1990, modified and published in the Official Monitor of Romania, no.33/ January 29, 1998.
The following types of commercial companies can be created, according to Romanian laws: general partnership (societate in nume colectiv) limited partnership (societate in comandita simpla) joint-stock company (societate pe actiuni) limited partnership by share (societate in comandita pe actiuni) limited liability company (societate cu raspundere limitata) Each of these types of companies has specific traits. The choice among these types is determined by various factors, such as: the way the entrepreneur conceives the structuring and the further development of the business, the number of partners, the starting capital, etc.
Attorney Dan Livescu
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2. What should the constitutive documents of a limited liability company or of a joint-stock company contain?
The Law 31/1990 concerning commercial companies prescribes the contents of the constitutive documents of a commercial company needed in order to obtain the authorization. If there are two or more associates, however, and you want to develop a functional business and do not want to waste time and money in lawsuits among the associates, these data are not sufficient. In reality there are a great number of lawsuits among associates because of the insufficient attention paid to the regulating of relations among associates and to the way the company functions. Thus, if there are two or more partners, it is necessary that you, together with an attorney, brainstorm about potential situations that may occur in the organizing and the functioning of the company.
In what concerns the mandatory clauses needed for the authorization, they are: surname, first name, the date and the place of birth, the address and the citizenship of the associates (in case they are natural persons); the name, the headquarters address and the nationality of the associates (in case they are legal persons); the type, name, headquarters address and, if the case, the emblem of the company; the object of activity, also mentioning the field and the main activity; the registered capital, subscribed and deposited, also mentioning the contribution of each associate in cash or in kind, the value of the contribution in kind and the way of evaluation, the date when the total subscribed capital is deposited, the number and the face value of the shares, as well as the number of shares given to each associate according to its contribution; the managers of the company, their prerogatives and the way they are to exercise these prerogatives; the share given to each associate in case of profit and loss; secondary headquarters (branches, agencies, offices or other units without legal personality) the time-span of the company the method of dissolution and liquidation of the company.
The constitutive document of a joint stock company contains all the data required for a limited liability company with the following differences:
- the registered capital deposited by each partner cannot be less than 30% out of the subscribed one. The rest of the registered capital can be deposited within 12 month from the registering of the company.
- the constitutive documents of a joint stock company will also have to contain: a specification if the shares are nominal or not; if different categories of shares exist, the number, the face value and the rights given by each category will be specified; the mandatory guarantee the manager must deposit; the surname, the first name, the date and place of birth, the address and the citizenship of the auditors (if they are natural persons); the name, the address of the headquarters and the nationality of the auditors (if they are legal persons).
Attorney Dan Livescu
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3. Which is the minimal registered capital of a limited liability company? How about a joint stock company?
The minimal registered capital of a limited liability company (societate cu raspundere limitata) is of 2 million lei.
The minimal registered capital of a joint stock company (societate pe actiuni) is of 25 million lei.
Attorney Dan Livescu
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4. How can an associate be excluded from the company?
Some specifications must be made.
Thus, the issue of excluding an associate appears only in the case of a general partnership, of a limited partnership or of a limited liability company; in the case of a limited partnership by shares, the issue regards only the active and responsible partners and not the silent partners. The shareholders in the joint stock companies who paid for their shares cannot be excluded, as the basis for the functioning of these companies is the capital and not the person.
Therefore, the associates in general partnership, in limited partnership, in limited liability company, as well as the active and responsible associates in joint stock sleeping partnership companies can be excluded. The reasons for their exclusion are provided by the Law 31/1990, republished with further modifications.
The exclusion can be decided by a Court, at the request of the company or of any of the associates.
The final decision of exclusion will be filed within 15 days at the Office of the Register of Commerce in order to be registered. The decision will be published in the Official Monitor.
Attorney Dan Livescu
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5. How can I withdraw from a limited liability company of which I am an associate?
The associate can withdraw from a limited company in the following cases: the cases prescribed in the constitutive documents; upon the agreement of the other associates; if the constitutive documents do not prescribe the cases regarding the withdrawal or if the unanimous agreement of the other associates is not achieved, the withdrawal can be made for well-grounded reasons upon the decision of the Court; In what concerns the worth of the share you are entitled to receive, this is to be established: upon settlement among the associates or by an expert appointed by them; when a settlement cannot be achieved, by a competent Court.
Attorney Dan Livescu
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6. I intend to expand the activity of the company by creating sub-companies (filiale) or branches (sucursale). What is the difference between the two and which type should I choose to set up: sub-company or branch?
The main difference between them consists in the fact that the sub-companies posses independent legal personality while the branches are dependent parts of the "mother" company, having no legal personality.
Therefore: the sub-companies are companies distinct from the "mother" companies; they engage in legal relations on their own behalf, they take on rights and obligations on their own liability. Sub-companies can be created as a commercial company according to the provisions of the Law 31/1990 regarding the types of commercial companies, under the conditions and having the legal status prescribed for that specific type of commercial company. Although an independent company, the sub-company is however under the control of the "mother" company which has the majority of the registered capital. The branches do not have independent legal personality, do not engage in legal relations on their own behalf and the liability extends to the "mother" company. The creation of branches is done in the conditions prescribed by the constitutive documents and they are registered in the Register of Commerce from the county where they will function. If the constitutive document does not stipulate anything concerning the branches, a general meeting of the associates is needed in order to dispose of the modification of the constitutive documents. Concerning what would be better to create, a sub-company or a branch, it cannot be said what would be best. The choice is done according the features and the type of business to be developed. The corporate development and extension of the company imposes the creation of various company structures, not only sub-companies and branches, but also agencies, bureaus, other secondary headquarters and work units. Only after a thorough analysis, together with a specialized jurist who understands the business mechanism, the way that fits best to the pursued ends can be chosen.
Attorney Dan Livescu
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7. What is the difference between a limited liability company and a general partnership?
The general legal framework is established by the Law 31/1990 concerning commercial companies. This stipulates various specific provisions for each type of company, from the point it is constituted to its liquidation. The main difference between a limited liability company and a general partnership is given, however, by the responsibility of the partners and by the registered capital. Thus: In a general partnership (societate in nume colectiv) the associates shall have an unlimited and joint liability for the company's obligations; the creditors of the company may sue the company in order to recover the credit given; if the company does not pay within 15 days, the creditors may then sue the associates. In the case of limited liability companies (societate cu raspundere limitata), the associates may be kept liable only up to the value of their subscribed registered capital. In the case of limited liability companies (societati cu raspundere limitata) the law prescribes a mandatory minimal amount of registered capital. In the case of general partnership (societati in nume colectiv) there is no minimal limit of registered capital.
Attorney Dan Livescu
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8. If an associate decides to withdraw from a limited liability company, what is the legal procedure to be followed?
It depends if the other associates agree or do not agree with the withdrawal.
If there is an agreement of the other associates, the constitutive document will be modified, respecting the substantial and the formal conditions for its being signed. This means that the associates will conclude an additional act that will register the withdrawal, as well as the other modifications of the constitutive documents that the withdrawal presupposes: registered capital, the way it will be distributed, the sharing of the benefits and losses among the remaining associates, etc. The additional act that modifies the constitutive document is authenticated with a public notary and filed at the Register of Commerce in order for it to be registered. After that it will automatically be sent to the Official Monitor in order to be published at the expenses of the company.
If there isn't a unanimous agreement the associate may withdraw for well-grounded reasons upon the decision of a Court.
Attorney Dan Livescu
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9. One of the shareholders is deceased. The shares are nominal. What can be done in order to transfer the shares to the successors of the late associate?
First of all, the quality of successor must be proven.
Thus, following the decease, succession will be open. The successors will receive an abstract share of the inheritance. After the distribution among the successors, proportionally to the percentage each one has, each successor becomes exclusive owner of some goods. In this sense a successor's certificate is issued.
According to the Law 31/1990, joint stock companies must keep, with the help of the Council of Administration, a register of the shareholders that specifies the surname, the first name and the address of the shareholders.
If, on the basis of the successor's certificate you become a shareholder, solicit the company you’re registering in the register of the shareholders.
Attorney Dan Livescu
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10. What do I have to do in order to dissolve a commercial company that did not increase its starting capital to the minimal amount prescribed by the law?
You do not need to do anything. According to the law, if the starting capital was not increased to the minimal amount prescribed by the law, the dissolving of that commercial company may be demanded by the state through the Ministry of Finance, by the Chamber of Commerce and Industry or by any other interested person.
Attorney Dan Livescu
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11. What are the consequences of not registering the modifications brought to a limited company in the Register of Commerce?
The consequence of not registering the acts containing the modifications is their lack of effect in relation with any third parties. That is, the third parties can claim that, as far as they are concerned, those acts do not exist and their provisions do not apply to them. However, the associates who signed the acts are completely subject to their provisions.
Attorney Dan Livescu
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12. May an associate lend money to the company he is an associate of?
The associates, legal or natural persons, may sign any kind of juridical document which is not against the law, including loaning documents with other juridical persons.
Commercial companies have independent legal personality, distinct from that of the associates that own the shares or parts of the starting capital of the company. Thus, they may, in their turn, sign various legal documents, including loans.
There is no legal provision that forbids a loan between the associates and the company. In conclusion, the associates may lend money to the company they are partners of.
Attorney Dan Livescu
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13. I authenticated the constitutive documents of the commercial company but I haven't registered it at the Register of Commerce. May I rent a commercial space? Which are the documents I may sign before the registering at the Register of Commerce?
According to the provisions of Law 31/1990 regarding commercial companies, corroborated with the provisions of the Decree 31/1954 concerning the legal and natural persons, the legal persons subject to registration (commercial companies included) have duties and rights from the point of their registering. The Decree 31/1954 mentions, however, some exceptions. Among them there is the situation concerning your renting the space. In what concerns the documents that may be signed between the point of the authentication and the moment of the registration at the Register of Commerce, article 33, paragraph 3 of the Decree 31/1954 stipulates that: " starting from the date of the constitutive documents, the legal person is entitled to the rights constituted and bound to comply to the obligations and to take any necessary preliminary measures, but only because all these are needed for the legal person to gain its legal status."
Attorney Dan Livescu
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14. How to cancel registration of the payment incident in The Payment Incidents Central regarding your check or promissory note when the legal person was not guilty for recording the incident?
To cancel the registration of the payment incident, cancellation must be promoted in an action in court. The action requires to be inserted in contradiction with the person declaring it, meaning the bank which found the payment incident. There is no fault of the person issuing the payment instrument when, for example, the instrument has been declared lost, stolen, destroyed, and yet it is submitted for settlement to the banking unit, which for lack of funds requires registration of the payment incident.
Attorney Claudiu Iordache
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15. What are my advantages if the debtor pays with a promissory note and not with a payment order?
In contrast with the payment order, payment with a promissory note has the great advantage that at the settling day, it becomes an executory title. Practically, it means that, if the debtor did not pay the debt, the creditor may ask the Court to invest the promissory note with the executory formula and to proceed at the forced execution. Therefore, a costly and long lawsuit that will have as result a final ruling that will further be invested with the executory formula will be avoided and you will save time and money.
Attorney Dan Livescu
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16. What are the steps to retrieve a claim written in a check or a promissory note?
First, it should be noted that the promissory notes, bills of exchange and check s are enforceable. This means they can be placed directly into execution, no longer requiring any legal action. But there is a prior procedure to be met, namely investing with enforceable formula by court. This procedure is provided in art. 106 in conjunction to art. 61 from Law 58 \ 1934 - Law of bills and promissory notes and Law 59/1934 – Law of checks. Then submit a request for enforcement to the executor, requiring him to obtain permission of the forced execution.
Attorney Claudiu Iordache
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17. What is the appeal against an enforcement - check, draft, promissory note?
When the appeal concerns the enforcement itself, the appeal is promoted as an opposition to the execution within 5 days from the cambial communication summons. This appeal involves exceptions that can only rely on the invalidity of the title. If we challenge the legality of forced execution, the appeal is an appeal/opposition to execution regarding the Code of Civil Procedure.
Attorney Claudiu Iordache
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18. What is the legal interest in commercial issues?
The legal framework is represented by the Ordinance of the Executive 9 / January 21,2000. According to article 3, the legal interest in commercial issues, when the debtor is a trader, is established at the level of the reference interest rate restablished by the National Bank of Romania.
In the international economic relations, when the Romanian law can be applied and when the payments are established in foreign currency, the legal interest is 6% per year. We must mention that the parties are free to establish in the contracts the level of the interest; the legal interest will than paid when the parties establish in the contracts that the interest is owed for the assumed obligations, but the rate of the interest is not mentioned.
Attorney Dan Livescu
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19. Can Authorized individuals/ freelancers hire personnel? How about family associations?
Under art. 3, paragraph 3 from Law no. 300/2004 regarding the authorization of individuals and family associations in carrying out economic activities independently, “Individuals who carry out independent economic activities and family associations authorized under this law can not hire persons with individual labor contracts for activities for which authorization was obtained”.
Attorney Claudiu Iordache
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