Romania Company Law - Nov17 - 1990 No:31 - Index

Romania Company Law

Romania Company Law Romania Company Law

TITLE I

General Provisions

Art. 1. In order to carry out a commercial activity natural and legal persons may associate and set up business organizations according to the present legal provisions. The business organizations having their headquarters in Romania are Romanian legal persons. Art. 2. The business organizations shall be organized in one of the following forms:

a) partnership, whose obligations are guaranteed by the capital and by the unlimited and joint liability of the partners;

b) limited partnership, whose obligations are guaranteed by the capital and joint liability of the general partners; the limited partners are liable only up to the value of their interest;

c) limited partnership by shares, whose capital is divided by shares, and whose obligations are guaranteed by the capital and by the unlimited and joint liability of the general partners; the limited partners are liable only for the payment of their shares;

d) joint-stock company, whose obligations are guaranteed by the capital; the shareholders are liable only for the payment of their shares;

e) limited liability company, whose registered obligations are guaranteed by the registered assets; the shareholders are liable only for the payment of their contributions.

TITLE II

Formation of Business Organizations

Chapter I

Partnerships and Limited Partnerships

Art. 3. The partnership and the limited partnership are constituted by a partnership contract, concluded in authentic form. The contract must include:

- first and last names or the trade name of the partners, their domicile or headquarters address and citizenship;

- the type of partnership, name and headquarters address;

- the scope of the partnership;

- the capital subscribed and deposited by partners, each partner’s contribution in cash or other assets, the value of the contribution and the method of valuation, and the due date for the payment in full of the subscribed capital;

- the partners in charge with the partnership’s administration and representation, and the limits of their powers;

- each partner’s share of profits and losses;

- location of the partnership’s branches and subsidiaries within the country and abroad;

- duration of the partnership;

- procedures for dissolution and liquidation of the partnership.

Art. 4. Within a period of 15 days from the date of authentication of the partnership contract, the administrators or any of the partners will register the partnership contract at the court with territorial competence over the area where the partnership headquarters will be located.

Upon registration the judge will review compliance with the provisions of Art.3, and then will order the recording of the partnership contract in the Register of Commerce and in the records of the Financial Administration in the area where the headquarters of the partnership are located, and the publication in the Official Gazette.

The partnership becomes a legal person as of the date of recording in the Register of Commerce.

The recording is performed upon submission of the evidence of the request for publication in the Official Gazette.

Art. 5. The partnership’s representatives designated by the partnership contract must deposit their signatures with the Register of Commerce within fifteen days of the recording date; the representatives elected during the normal course of business must deposit their signatures within fifteen days of their election. Art. 6. If a partnership sets up a branch or a subsidiary outside the county where it has the headquarters, the administrators must apply for their recording in the Register of Commerce of the county where they will operate prior to their start of operations. The representatives of the branch or subsidiary will deposit their signatures in accordance with the provisions of Art.5. Art. 7. If the publication formalities provided for by Art.4 are not completed, any of the partners is entitled to ask for their completion or the dissolution and liquidation in case that the partnership was not recorded.

The failure to complete the formalities provided for by Art.4 cannot be invoked by partners against third parties.

The partners and all individuals who operated on the partnership’s behalf, prior to the formation of such partnership, have a direct, unlimited, joint liability for the partnership’s operations in which they were involved.

Chapter II

Joint-Stock Companies and Limited Partnerships by Shares

Art. 8. The joint-stock company and the limited partnership by shares, shall be organized by contract and by-laws.

The contract shall be signed by all incorporators, partners or in case of public subscription by the founding members.

The capital cannot be lower than one million ROL and the number of shareholders or partners less than five.

Art. 9. The contract and by-laws of the joint stock company and of the limited partnership by shares shall be certified and must include:

- the first and last names or the trade name of the shareholders, their domicile or the headquarters address, the citizenship or nationality;

- the trade name and headquarters address of the joint-stock company or limited partnership by shares, of their branches and subsidiaries;

- legal form of doing business and scope;

- the amount of subscribed and deposited capital.

Initially the deposited capital cannot be lower than 30%, unless otherwise provided for by law;

- value of the assets brought in as contribution in kind, methods of valuation and number of shares issued in consideration for the heretofore mentioned assets;

- number and nominal value of shares, whether these are nominal or payable to bearer and their number for each class;

- number, first and last names and citizenship of the administrators, the guarantee that they have to deposit, their powers and special rights of administration and representation, granted to some of them; for the limited partnership by shares, the general partner’s first and last names or the trade name, domicile or headquarters and citizenship or nationality, indicating who is in charge with the administration and representation of the partnership ;

- conditions for validity of the general meeting proceedings and procedure of exercising the voting rights;

- number, first and last names and citizenship of the auditors;

- duration of the joint-stock company or limited partnership by shares;

- method of distribution of profits;

- limited partner’s stock in the limited partnership by shares;

- transactions undertaken by shareholders or partners on behalf of the joint- stock company or the limited partnership by shares to be organized, which will be assumed by the new entity and the amounts which will have to be paid on the account of these transactions.

Art. 10. If a joint-stock company or limited partnership by shares is funded by public subscription, its founders will draft a prospectus which will include information provided under Art.9, except the information regarding the administrators and auditors and will set the last day for subscription.

The prospectus signed by the founders, in authentic form, must be deposited before publication with the Register of Commerce of the county where the headquarters of the joint-stock company or limited partnership by shares will be located.

The competent court in the county where the Register of Commerce is located, upon finding that the provisions of paragraphs 1 and 2 are complied with, will authorize the publication of the prospectus.

Art. 11. Stock subscriptions will be written on one or more copies of the prospectus marked by the court of the county where the Register of Commerce is located.

The subscription shall indicate: the first and last names or the trade name, domicile or headquarters address of the subscriber, the spelled out number of the subscribed shares, the subscription date and an express statement that the subscriber has knowledge of and accepts the prospectus.

The prospectuses which do not include all legal requirements are void.The subscriber could not invoke such nullity if he/she attended the constitutive meeting or if he/she exercised the rights and obligations of a shareholder or partner.

Art.12. Within at most fifteen days since the last day of the subscription period, the founders shall convene the constitutive meeting by a notice published in the Official Gazette fifteen days prior to the date established for the meeting. The notice will include the place and the date of the meeting, which cannot take place later than two months since the last day of subscription, and also a detailed list of the problems which will be discussed. Art.13. The joint-stock company or the limited partnership by shares may be constituted only if the entire capital was subscribed for and each subscriber paid in cash half of the subscribed stock value at the National Bank, the Savings Bank, or at one of their branches.

The shares paid for by other consideration than cash, have to be paid in full. Debts of third parties are not allowed as consideration.

Art. 14. If the public subscriptions exceed or are lower than the issue provided for in the prospectus, the founders have the obligation to submit the increase of the issue to the subscription level to the constitutive meeting’s approval. Art. 15. The founders have the obligation to draw up a list of those who subscribed and have the right to participate in the constitutive meeting.

This list will be posted up at the meeting place, at least 5 days prior to the meeting.

Art.16. The meeting elects a president and two or more secretaries. The participation of the subscribers will be ascertained by attendance lists signed by subscribers and certified by the president and the secretary.

Prior to the start of discussions of the meeting’s agenda any subscriber has the right to raise issues concerning the list posted up by the founders. The meeting will decide upon these issues.

Art. 17. At the constitutive meeting any subscriber has the right to one vote, irrespectively of the number of shares he/she subscribed for. He/she may also be represented by a special mandate (proxy). No one can represent more than 5 subscribers.

The subscribers whose contribution is other than cash do not have voting rights in the proceedings concerning their contribution, even if they paid for other shares in cash or they appear as proxies for other subscribers.

The constitutive meeting is legally constituted if half plus one of the subscribers are present and it makes decisions by the vote of the simple majority of those present.

Art. 18. If there are contributions in kind, advantages reserved for the founders, transactions concluded by founders on the account of the joint-stock company or limited partnership by shares to be organized and these transactions will be assumed by the new entity, then the constitutive meeting will appoint one or more experts who will advise on the valuations.

If the majority provided for by law cannot be acquired, then the appointment of the experts will be made by the court upon the request of a subscriber.

Art. 19 The following cannot be appointed as experts:

- relatives and affiliates up to the fourth degree included, or the spouses of those who made contributions in kind, or of the founders;

- persons who receive wages or remuneration in any form for their work other than as an expert, from the founders or from those who made contributions in kind.

Art. 20. After the experts submit their report, the founders convene again the constitutive meeting according to the provisions of Art.12. If the value of the contributions in kind, established by experts, is one fifth lower than the one stated by founders in the prospectus, any subscriber may withdraw by giving notice to founders until the day established for the constitutive meeting.

The shares of the subscribers who decided to withdraw may be acquired by the founders or other persons by public subscription within 30 days.

Art. 21. The constitutive meeting has the following obligations:

- review the existence of payments;

- determination of the value of contributions other than cash; approval of participation in benefits of the founders and in transactions concluded on behalf of the company or partnership;

- discussion and approval of the joint-stock company or limited partnership by shares contract and by-laws with the assistance of the present members who also represent the absentee members and appointment of those who will attend the authentication of the documents and the formalities required for the formation of the company or partnership;

- appointment of administrators and auditors.

Art. 22. The operation of the joint-stock company and of the limited partnership by shares is subject to the authorization of the court in the county where the headquarters will be located.

In order to obtain the authorization, the contract and the by-laws shall be submitted within 15 days from their authentication together with the authorization application, and:

- proof of share payment;

- documentation concerning ownership of other assets than cash and in case real estate is also evidenced, a certificate ascertaining the encumbrances and liens;

- the documentation for the transactions concluded on behalf of the company or partnership and approval by the constitutive meeting.

Art. 23. The presiding judge, upon receiving the authorization application sets a hearing date and demands the opinion of the County Chamber of Commerce and Industry concerning the usefulness of the company or partnership, the size of the capital with regard to the business scope, reputation of the founders and of the partners. The opinion of the Chamber of Commerce and Industry has a consultative character.

If the court considers it necessary, it may order an expertise on the parties’ account for the valuation of the contribution in kind, the provisions of Arts.18 and 19 being accordingly applicable. If the contract or the by-laws include provisions contrary to the law the court will authorize the operation of the company or partnership only if the respective provisions are amended to comply with the law.

The court decision may be appealed within 15 days from the issuance of the decision.

Art. 24. The court decision will be deposited within fifteen days since it becomes final together with the contract and by-laws to be recorded with the Register of Commerce in the county where the headquarters are located and with the Financial Administration. The court decision, the joint-stock company or limited partnership will be published in the Official Gazette.

The joint stock-company or the limited partnership by shares is a legal person as of the recording date in the Register of Commerce. The recording will be done according to the provisions of the last paragraph of Art.4.

The provisions of Arts.5 and 6 are to be applied both to joint-stock companies and to limited partnerships by shares.

Art. 25. The payments made according to Art.13, for the formation of the company or partnership by public subscription shall be delivered to persons appointed to receive them under the joint-stock or limited partnership by shares contract, or in the absence of such provisions to persons appointed by the decision of the Council of Administration upon the presentation of the Register of Commerce certificate which shows the recording of the joint-stock company or the partnership. Art.26. The joint-stock company or the limited partnership by shares contract is not considered legally constituted unless the formalities provided for by Arts.22 and 24 are completed. Upon failure to complete such formalities the subscribers may request to be released from the obligations caused by their subscriptions, three months after the expiration of the period provided for under Arts.22 and 24, paragraph 1.

Each subscriber may proceed to complete the publicity formalities provided for by law.

If a subscriber files an application for completion of the recording formalities none of the subscribers may claim a release from the obligations caused by the subscription.

The provisions of Art.7, paragraphs 2 and 3 shall also apply to joint-stock companies and limited partnerships by shares.

Art. 27. The signers of the joint-stock or limited partnership contract by shares and the persons who played a major role in the formation process are considered founders.

The founders have the obligation to deliver the documentation and correspondence concerning the formation of the joint-stock company or the limited partnership by shares to the administrators.

The founders are unlimitedly and jointly liable to the third parties for both the failure to complete the formalities for the formation of the company or limited partnership and for the obligations incurred during the formation process.

They assume the consequences of the necessary acts and expenses for the formation and, if for any reason, the company or the limited partnership by shares will not come into being they do not have recourse against the subscribers.

Art. 28. The founders and first administrators are jointly liable as of the time of formation to the joint-stock company or limited partnership by shares for :

- the full subscription of the capital and payments according to the law or by- laws;

- payment of contribution other than cash;

- accuracy of publicity related to the formation of the joint-stock company or limited partnership by shares.

The founders are also liable for the validity of transactions concluded on the account of joint-stock company or limited partnership by shares prior to their formation and subsequently assumed by the new entities.

For the next five years the general meeting cannot release the founders and the first administrators of the liability that they have according to this article and Art.27.

Art. 29. The persons who according to the law are incompetent or have a criminal record for fraudulent administration, breach of fiduciary duty, forgery, embezzlement, perjury, bribery and for other crimes punished according to the present law cannot be founders. Art. 30. The constitutive meeting will decide upon the participation quota of net profits due to the founders of a joint-stock company or limited partnership by shares funded by public subscription.

The quota provided for under paragraph 1 cannot exceed 6% of the net profit and cannot be granted for a period longer than 5 years since the date of formation of the joint-stock company or limited partnership by shares.

In case of an increase of the capital, the right of the founders can be exercised only over the net profit of the initial capital.

Only the persons qualified as founders can benefit under the provisions of this article.

Art.31. Upon fraudulent early dissolution of the joint-stock company or limited partnership by shares the founders have the right to ask for damages. The right to sue can be exercised within 6 months only after the date of the general meeting of the shareholders or partners, which decided the early dissolution. Romania Company Law Romania Company Law
Ask System Day
only required if you wish us to call you back