Corporate Law at Romania
Sure! Here’s a detailed overview of Corporate Law in Romania:
Corporate Law in Romania
1. Legal Framework
Corporate law in Romania is mainly governed by Law no. 31/1990 on companies, which has been amended multiple times to align with EU standards.
Additional regulations include the Company Law, Commercial Code, and sector-specific legislation.
Romania is an EU member, so its corporate law is influenced by EU directives on company law, transparency, and corporate governance.
2. Types of Companies
The Romanian law recognizes several types of commercial companies, with the most common being:
Limited Liability Company (Societate cu Răspundere Limitată - SRL)
Most widely used form for small and medium enterprises (SMEs).
Shareholders’ liability is limited to their capital contribution.
Minimum share capital is 1 RON (~0.20 EUR).
Joint Stock Company (Societate pe Acțiuni - SA)
Suitable for larger businesses and publicly traded companies.
Requires a minimum share capital of 90,000 RON (~18,000 EUR).
Shares can be publicly traded on the stock exchange.
Partnerships
Includes general partnerships (societate în nume colectiv), limited partnerships (societate în comandită simplă), and limited partnerships by shares (societate în comandită pe acțiuni).
Sole Proprietorship and Family Associations
Simpler structures with unlimited liability.
3. Company Formation
Registration is done through the Trade Registry Office.
The registration process requires submission of:
Articles of incorporation
Proof of share capital payment
Identification documents of shareholders and directors
Registered office details
The registration process is relatively quick, often completed within a few days.
4. Corporate Governance
SRL (Limited Liability Company):
Managed by one or more directors appointed by the shareholders.
Shareholders meet in the general assembly to make major decisions.
SA (Joint Stock Company):
Managed by a Board of Directors or a two-tier system with a Management Board and Supervisory Board.
Annual general meetings of shareholders have significant decision-making powers.
5. Capital and Shares
In SRLs, capital is divided into “parts” (quotas), not shares, and cannot be publicly traded.
In SAs, capital is divided into shares which can be transferred freely (with some restrictions for closed companies).
Shareholders are protected by law and have rights to dividends, voting, and information.
6. Reporting and Compliance
Companies must maintain accounting records according to Romanian accounting standards and EU regulations.
Annual financial statements must be filed with the Trade Registry and published.
Larger companies and public companies are subject to stricter transparency and auditing rules.
7. Foreign Investment
Romania welcomes foreign investment with no significant restrictions on foreign ownership.
Foreign investors can fully own Romanian companies.
The country benefits from various incentives, especially in IT, manufacturing, and research sectors.
Summary:
Romania’s corporate law provides a well-established, EU-aligned framework with flexible company types suitable for both SMEs and large corporations. It offers protections for shareholders, clear governance rules, and facilitates foreign investment.
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