Romania Company Law - Nov17 - 1990 No:31 - Joint Stock Companies

Romania Company Law

Romania Company Law Romania Company Law Romania Company Law

Chapter IV

Joint-Stock Companies

Section I

Shares

Art. 61. In joint-stock companies the capital is represented by shares issued by the company; the shares may be nominal or payable to bearer.

The type of shares will be determined by the partnership contract and by-laws, otherwise they will be payable to bearer.

The shares could not be issued for an amount lower than the nominal value.

The shares which are not fully paid are always nominative.

The capital cannot be increased and new shares cannot be issued until the shares of the previous issue are fully paid.

Art. 62. The nominal value of a share cannot be lower than 1,000.00 ROL.

The shares will include:

a) the name and the duration of the company;

b) the date of the incorporation contract, the company’s recording number in the Register of Commerce and the number of the issue of the Official Gazette where the publication was made;

c) the capital, the number of shares, the share sequential number, the share nominal value and the payments made;

d) the advantages granted to the founders.

For nominal shares, the last name, the first name and domicile of the shareholder, or the trade name and headquarters address will be also indicated.

In case there are several administrators the shares must bear the signature of two administrators, or otherwise that of the sole administrator.

Art. 63. The shares must be equal in value; they grant equal rights to possessors.
Art.64. The ownership right of the nominal shares shall be transferred by the statement recorded in the stock register of the issuer signed by the transferor and the transferee or their representatives and by the mention of the transfer made on the stock certificate.

Subscribers and subsequent transferees are jointly and severally liable for the full payment of shares for a period of three years counted as of the date the transfer was mentioned in the company register.

Art. 65. The ownership right over the bearer shares is transferred by simple delivery.
Art. 66. If the shareholders fail to submit timely share payments, the company will invite them to meet their obligation by a joint summons published twice, at a 15-day interval in the Official Gazette and a newspaper of widespread circulation.

If, following the summons, the shareholders fail to make their payments, the Council of Administration may decide either to sue the shareholders for the remaining payments, or to cancel these nominal shares.

The cancellation decision will be published in the Official Gazette with the specification of the sequential number of the cancelled shares.

Instead of the cancelled shares new shares will be issued, which will be sold.

The sums resulted from sale will be used to cover the expenses for publication and sale, the accrued interest caused by the delay and the outstanding payments; the remaining amount will be returned to the shareholders.

If the sale proceeds are not sufficient to cover all amounts due to the company or if the sale does not take place because of lack of buyers, the company has recourse against the subscribers and transferees according to the provisions of Art.64.

If following these proceedings, the amounts due to the company are not covered, the capital will be immediately reduced proportionally with the difference between the real capital and the registered capital.

Art. 67. Any share confers the right to one vote in the company meetings.

The incorporation contract or the by-laws may limit the number of votes of the shareholders who own more than one share.

The exercise of the right to vote of the shareholders who are not current with their due payments, is suspended.

Art. 68. The shares are not divisible.

If a nominal share becomes the property of several persons, the company does not have the obligation to record the transfer as long as these persons will not appoint a sale representative for the exercise of the rights resulting from the ownership of the share.

Also, if a bearer share belongs to several persons, these must appoint a sole representative.

As long as a share is the common property of several persons, they are jointly liable for the payments.

Art. 69. The company cannot acquire its own shares, or grant loans or advance payments on them, except when the general meeting of the shareholders decides otherwise, with the vote of the shareholders holding two thirds of the capital.
Art. 70. The shareholders advertising for sale their shares will have to draft a prospectus including besides the information shown under Art.9, the profit and loss account from the last annual report, the paid dividends, the bonds issued and the guarantees given.

The prospectus signed by shareholders and administrators and authenticated will be deposited with the Register of Commerce of the county where the company headquarters are located. The competent court in the county where the headquarters are located, upon finding compliance with the provisions of par.1, will authorize the publication of the prospectus.

The announcements with the same content as the prospectus will be published in at least two of the most widespread newspapers of the town where the company headquarters are located.

The provisions of Art.11, al. 1 and 2 will apply accordingly to the purchasers of shares.

The prospectuses which do not include all mentions provided under parts. 1 and 2, will be void and the sales will be voided upon the request of the publishers, except when they did not exercise the rights and obligations of a shareholder.

Art. 71. The situation of the shares must be published at the same time with the annual report and it should especially indicate if the shares were fully paid and the number of shares for which payment was requested without any result.

Section II

General Meetings

Art. 72. General meetings are ordinary and extraordinary.

Unless the incorporation contract or the by-laws provide otherwise, they will be held at the company headquarters or at the place indicated in the notice.

Art. 73. The ordinary meeting convenes at least once a year and at the latest three months after the end of the fiscal year. Besides the discussion of other problems included on the agenda, the general meeting has the following obligations:

a) to discuss, to approve and to modify the annual report after the presentation of the reports of the administrators and the auditors, and to determine the dividends;

b) to appoint the administrators and the auditors;

c) to set the remuneration due to administrators and auditors for the fiscal year, if it was not established by the incorporation contract or by-laws;

d) to evaluate the performance of the administrators;

e) to determine the budget for revenues and expenses and, accordingly, the plan of operations for the next fiscal period;

f) to decide the pledge, lease or dissolution of one or several of the company’s units.

Art. 74. For the ordinary meeting, the presence of the shareholders holding at least half of the registered capital is required in order to have valid proceedings; the decisions must be taken by shareholders holding the absolute majority of the registered capital represented at the meeting, if the incorporation contract, the by-laws, or the law do not provide for a greater majority.

If the general meeting cannot proceed because the conditions provided for under par. 1 are not met, the majority (of the share holders) of the meeting which will convene following a second notice, can make decisions on the problems included on the agenda of the first meeting, whatever the number of the attending shareholders.

Art.75. The extraordinary general meeting is convened whenever a decision is needed for:

a) extension of the duration of the company;

b) increase of the capital;

c) change of the object of the company;

d) change of the corporate form of doing business;

e) change of headquarters location;

f) merger with other companies;

g) reduction of the registered capital or the recapitalization by emission of a new issue;

h) early dissolution of the company;

i) issuance of obligations (bonds);

j) any other change of the incorporation contract or by-laws or any other decision which requires the approval of the extraordinary general meeting.

Art. 76. In order to ensure the validity of the proceedings of the extraordinary general meeting, if the incorporation contract or by-laws, do not provide otherwise, the following conditions are required:

- upon the first notice, the attendance of the shareholders holding three fourths of the registered capital; the decisions must be made by vote of the shareholders holding at least half of the registered capital;

- if the above conditions are not met, upon the following notices, the attendance of the shareholders holding half of the registered capital; the decisions must be made by the vote of the shareholders holding at least one third of the registered capital.

Art.77. The general meeting will be called by the administrators whenever necessary according to the by-laws.

In any case the meeting date cannot be earlier than fifteen days after the publication of the notice.

The notice will be published in the Official Gazette and in one of the newspapers of widespread circulation in the town where the company headquarters are located or in the nearest town.

The notice will include the place and the date of the meeting and the agenda explicitly indicating all problems which will be subject to debates at the meeting.

If the agenda includes proposals to change the by-laws, the notice will have to include the full text of the proposals.

Art. 78. The notice of the first general meeting may include the day and the time for the second meeting in the event that the first meeting could not take place.

The second meeting cannot take place on the same day set for the first meeting.

If the day for the second meeting is not shown in the notice published for the first meeting, the term provided for in Art.77 could be reduced to 8 days.

Art. 79. The administrators are under obligation to immediately convene the general meeting, upon the request of the shareholders representing the tenth part of the registered capital, or a lower quota, if so provided for in the incorporation contract, if the request includes issues coming under the authority of the general meeting.

The general meeting will take place within a month of the request.

If the administrators do not call the meeting, the court in the area where the company headquarters are located can order the meeting, appointing one of the shareholders to preside it.

Art. 80. At the general meeting the shareholders exercise their voting right proportionally with the number of their shares, with the exception provided for in Art.67, par. 2.
Art. 81. The shareholders representing the entire registered capital may, if none of them opposes it, hold a general meeting and make decision within the meeting’s authority, without the observance of the formalities required for the calling of the meeting.
Art. 82. At the general meetings, the shareholders holding bearer shares can vote only if they deposit their shares at the place indicated by the by-laws or by the meeting notice, at least 5 days prior to the meeting.The auditors will ascertain the timely deposit of the shares by a report. The shares shall be deposited until after the general meeting, but could not be kept for more than 10 days since the day of the meeting.
Art.83. At the general meetings the shareholders can be represented only by other shareholders with a special mandate.

The shareholders who do not have legal capacity and the legal persons can be represented by their legal representatives, who in turn can issue a special mandate (for representation) to other shareholders.

The mandates will be deposited in original by the deadline that other shareholders have the obligation to deposit their shares, or within the time period provided for by the by-laws.

They will be kept by the company making mention about that in a report.

The incorporation contract or the by-laws may provide otherwise than the provisions concerning representation by shareholders only of other shareholders.

The administrators and the company employees cannot represent the shareholders, under the sanction of the nullity of the decision, if without their vote the required majority would not have been met.

Art. 84. The administrators may not vote, either personally or by a representative, on the basis of the stock they own, on their release of liability for their administration or on a matter in which their person or administration would be issue.

However, if they own at least half of the registered capital and the legal majority cannot be attained without their vote, they may vote on the annual report and profit and loss matters.

Art. 85. The shareholder who in a certain transaction has either personally or as a representative of another person an interest contrary to that of the company, must abstain from the proceedings concerning that transaction.

The shareholder who contravenes these provisions is liable for the damages caused to the company, if without his vote, the required majority would not have been met.

Art.86. The right to vote cannot be ceded. Any convention concerning the exercise in a certain manner of the voting right is void.
Art. 87. On the day and at the time shown in the notice, the meeting shall be opened by the president of the Council of Administration or by the person substituting him.

The president will appoint two or more secretaries from among shareholders, who will review the list of attendance of the shareholders, showing the capital represented by each of them, the auditor’s report ascertaining the number of deposited shares and compliance with the formalities required by law and by the by-laws concerning the meeting; then the meeting will proceed with its agenda.

Art. 88. The decisions of the meeting will be made by open vote.

No matter what the provisions of the incorporation contract and the by-laws are, the secret vote is mandatory for the election of the members of the board of administration and of the auditors, for their revocation and for making the decisions concerning the liability of the administrators.

Art. 89. A minute signed by the president and secretary shall ascertain compliance with the formalities for calling the meeting, date and time of the meeting, shareholders’ attendance, number of shares, and shall include a summary of the proceedings, the decisions made and, upon the request of the shareholders, their statements at the meeting.

The documentation concerning the calling of the meeting and the shareholders’ attendance list shall be attached to the minute.

The minute will be filled in the register of the general meetings.

In order to be opposable to the third parties, the decisions of the meeting (of the shareholders) shall be deposited within 15 days at the Register of Commerce to be mentioned in excerpt and published in the Official Gazette.

They (the decisions) cannot be carried out prior to complying with these formalities.

Art. 90. The decisions made by the general meeting within the bounds of the law, incorporation contract or by-laws are mandatory even for the shareholders who did not take part in the meeting or voted against them.

Any shareholder who did not take part in the general meeting or voted against its decisions and requested the recording of (their opposition) in the minute of the general meeting may start legal action against the decisions of the general meeting, contrary to the incorporation contract, by-laws, or the law within 15 days since the date of publication in the Official Gazette.

If all administrators are taking legal action against the decisions (of the general meeting) the company will be represented in court by the person appointed by the presiding judge from among the shareholders, who will carry out this appointment until the general meeting, convened for such purpose, elects another person.

The annulment action shall be filed at the court with territorial competence where the company headquarters are located; the plaintiff shareholder has the obligation to file with the court clerk at least one copy.

If several annulment actions were filed they can be joined.

The request (to join the action) shall be heard in the chamber.The final annulment decision will be recorded in the Register of Commerce and published in the Official Gazette. After the date of publication this decision is opposable against all shareholders.

Art. 91. At the same time with the start of the annulment action the plaintiff may request the issuance of a stay of execution of the decision (of the general meeting) sued upon by the presiding judge.

The presiding judge upon granting the stay may order the plaintiff to post bond.

An appeal can be taken against the stay of execution order within 5 days of the issuance of the order.

`Art. 92. The shareholders who do not agree to the decision made by the meeting concerning the change of business object, of the headquarters location, or the company’s corporate form have the right to withdraw from the company and, at their choice, to obtain payment for the shares they own proportionally with the value of the assets according to the last approved annual report.

At the same time with the withdrawal request they will submit the shares that they own.

Section III

Administration of the Company

Art. 93. The joint-stock company is managed by one or more acting and revocable managers.

If there are more administrators, they will form a Council of Administration.

If the incorporation contract or by-laws do not provide otherwise the sole administrator or the president of the Council of Administration and at least half of the administrators shall be Romanian citizens.

The appointment and replacement of the administrators are exclusively made by the general meeting of the shareholders.

The first administrators can be appointed by the incorporation contract, but the term of their mandate cannot be longer than four years.

If the term of the mandate was not set by the incorporation contract or by-laws, it is for two years.

If the company contract or the by-laws do not provide otherwise the administrators may be reelected.

Art. 94. The persons who, according to the present law, cannot be founders, cannot be administrators, directors or company representatives either, and if they were elected they do not have any rights.
Art. 95. Each administrator will have to deposit a guarantee for his/her performance provided for by the company contract or by-laws, or if such provision is missing, approved by the general meeting of the shareholders.The guarantee cannot be lower than the value of ten shares or the double of the monthly salary.

If the administrator is a shareholder, the guarantee may be submitted upon his/her request, by depositing ten shares, which during his/her term are inalienable, cannot be sold or pledged and are kept by the company.

The guarantee shall be deposited prior to the beginning of the administrator’s term; it can also be deposited by a third party.

It is deemed that the administrator resigned if the guarantee is not deposited prior to the date he/she had to begin his/her term.

The guarantee remains in the company’s treasury and it can be returned to the administrator only after the general meeting approved the annual report release.

Art. 96. The signatures of the administrators shall be deposited at the Register of Commerce together with a certificate issued by the auditors certifying the deposit of the guarantees.
Art. 97. If the incorporation contract or the by-laws do not provide for a higher number, the personal attendance of at least half of the number of administrators is necessary for the validity of the decisions of the Council of Administration.
Art. 98. The Council of Administration may delegate part of its powers to a managing committee composed of members elected from the ranks of administrators and shall also set their remuneration.

The president of the Council of Administration is also the general director or director and in such a position he runs the managing committee.

If the decision of the Council of Administration concerning the amount necessary for the remuneration of the members of the managing committee goes beyond the provisions of the by-laws or if the by-laws do not provide anything in this respect, then it must be ratified by the general meeting.

The decisions of the managing committee shall be made with the absolute majority of the votes of its members.

The managing committee is obliged to submit at each meeting of the board of administration its minute file.

At the managing committee (meetings) the vote cannot be exercised through a representative.

Art. 99. The appointment of the employees of the company shall be made by the Council of Administration if the incorporation contract or by-laws do not provide otherwise.

The Council of Administration may at any time revoke the persons appointed to the managing committee.

Art. 100. No one can be appointed to more than three Councils of Administration at the same time.

The interdiction provided for in paragraph 1 does not concern the cases when the person elected for the Council of Administration is owner of at least one fourth of the total of shares or he/she is administrator of a company which holds the above shown quota.

The person who does not comply with the above mentioned provision will lose according to the chronological order, the position of administrator, obtained by exceeding the legal number of consequent appointments, and he/she will be sentenced to make payment of the remuneration and the other benefits and to return all amounts received to the state.

The legal action against the administrator can be exercised by any shareholder or by the Ministry of Finance.

The members of the management committee and the directors of the joint-stock company cannot be, without the authorization of the Council of Administration, members of the managing committee, auditors, and associates with unlimited liability, of other competing companies or with the same business object, nor exercise the same trade or a competing one on their own account or on any other person’s account (the violation of this provision will entail revocation and liability for damages).

Art. 101. The administrators shall not, without the approval of the general meeting, conclude contracts on behalf of the company to purchase real estate, installations, and assets for a long-term use by the company, for a price exceeding totally or partially one tenth of the registered capital, if the incorporation contract or the by-laws do not provide otherwise.
Art.102. The administrators are responsible for meeting their obligations according to the provisions of Arts. 42 and 43.

The managing committee, all administrators are liable to the company for the acts of the directors or employees, when the damages would not have occurred if they had exercised the supervision required by the duties of their appointment.

The managing committee must inform the Council of Administration of all violations found by exercising its duty of supervision.

The administrators of the joint-stock company are jointly liable together with their immediate predecessors if, having knowledge of the irregularities committed by these predecessors, they do not disclose them to the auditors.

In the companies with several administrators, the liability for acts omissions does not extend to the administrators who registered their opposition in the book of decisions of the Council of Administration and informed the auditors about that in writing.

An administrator shall be liable for the decisions made at meetings which he/she did not attend, if within a month since he/she got knowledge of these decisions he/she did not register his/her opposition in the forms shown in the precedent paragraphs.

Art. 103. The administrator who, in a certain transaction, has direct or indirect interests contrary to the interests of the company must inform the other administrators and auditors about that and not take part in proceedings concerning this transaction.

The administrator has the same obligation if he/she knows that his/her spouse, relatives or their associates up to the fourth class are interested in a certain transaction.

The administrator who does not comply with the provisions of para graphs 1 and 2 shall be liable to the damage incurred by the company.

Art. 104. The Council of Administration convenes whenever it is necessary.

It must convene at least once a month at the company head quarters, and the managing committee, at least once a week.

The notices for the meetings of the Council of Administration will include the place and the agenda of the meeting; no decision upon matters not included on the agenda can be made, except in emergencies and under the condition of ratification at the next meeting by the absentee members.

At the meetings of the Council of Administration the directors will submit written reports concerning the transactions carried out, and the managing committee will submit its minute book.

At the meeting of the Council of Administration the auditors shall also be invited.

At each meeting a minute shall be drafted which will include the matters discussed, the decisions made, the number of votes (for the decisions) and the separate opinions.

Art. 105. The execution of the operations of a company can be entrusted to one or more executive directors, employees of the company.

The executive directors cannot be members in the Council of Administration of the company.

They are liable to the company and third parties, for not meeting their obligations, according to the provisions of Art.102, even if there is a contrary agreement.

Art.106. Salaries and any other sums or benefits can be granted to administrators or auditors only on the basis of a decision of the general meeting.
Art.107. Any shareholder has the right to bring to the attention of the auditors the matters that he/she thinks must be audited, and they have the obligation to review them; if the auditors find something of real significance they must take it into consideration when drafting their reports to the general meeting.

If the complaint is made by shareholders representing at least one fourth of the registered capital or a lesser quota if the by-laws provide otherwise, the auditors have the obligation to submit their observations and proposals about the facts brought to their attention.

If the auditors find the complaint of the shareholders representing one fourth of the registered capital to be justified and urgent, they have the obligation to immediately call the general meeting; otherwise they have to report to the next meeting. The meeting must make a decision concerning the matters complained about.

The fourth part of the capital is proven by the deposit of shares at banks or savings institutions in Romania or at their units.

The shares shall remain deposited until after the general meeting and will also be used to identify the shareholders participating in the meeting.

Art.108. The legal action against the founders, administrators, auditors and directors, can be initiated by the general meeting, which shall decide upon it by the majority provided for by Art.74.

The decision can be made even if the matter of their liability is not included on the agenda.

The general meeting designates with the same majority the person in charge of pursuing the legal action.

If the general meeting decides to start legal action against the administrators, their mandate ceases by law and the meeting will proceed to their replacement.

If the legal action is taken against the directors, these are suspended by law from their position until the court decision becomes final.

Art. 109. If the seat of one or more administrators becomes vacant, the other administrators, together with the auditors, with a quorum of two thirds and with absolute majority, proceed if the incorporation contract or the by-laws do not provide otherwise to the appointment of a temporary administrator until the next general meeting.

If there is a sole administrator and he/she wants to retire, the general meeting has to be called. In cases of death or physical incapacity of the administrator, the temporary appointment will be made by the auditors, but the general meeting shall be convened by an emergency call for the permanent appointment of the administrator.

Art. 110. Upon finding out about the loss of half of the capital, the administrators have the obligation to convene an extraordinary general meeting to decide the rebuilding of the capital, or the reduction of the capital to the actual value, or the dissolution of the company.

The incorporation contract and by-laws may provide that the extraordinary meeting be convened even for a lower loss.

If even after the second call the quorum provided for by Art.76 is not met, the administrators shall ask the court in the area where the company headquarters are located, to appoint an expert, who shall review the loss of capital. The court, on the basis of the expert report, and finding the loss provided for by paragraphs 1 and 2, shall issue an order authorizing the administrators to call the general meeting, which in turn can decide the reduction of capital to the actual value or the dissolution of the company, with as many shareholders as are present.

Section IV

Auditors

Art. 111. If the incorporation contract or the by-laws do not provide for a higher number, the joint-stock company shall have three auditors and the same number of deputies. The number of auditors must be odd in all cases.

Initially, the auditors are elected by the constitutive meeting, the duration of their mandate is three years, and they can be reelected.

The auditors must personally exercise their mandate.

At least one of them must be an accountant legally certified or an expert accountant.

At the companies in which the state holds at least twenty per cent of the registered capital, one of the auditors shall be recommended by the Ministry of Finance.

The majority of the auditors and deputies shall be Romanian citizens.

The auditors have the obligation to deposit within the time period shown under Art. 95, the third part of the guarantees requested for administrators.

Art.112. Except the accountant auditors, the auditors must be shareholders.

The following cannot be auditors and if they were elected their election would be void:

a) relatives, their associates up to the fourth class included, and the wives of the administrators;

b) the persons who receive a salary or remuneration in any form for work other than auditor from the administrators according to Art.49.

The auditors are paid a fixed salary established by the by-laws or the general meeting which appointed them.

Art. 113. Upon the death, physical or legal incapacity, termination or resignation of auditor, he/she will be replaced by the oldest deputy.

If the number of auditors cannot be completed in such manner, the remaining auditors shall appoint other persons for the vacant position, until the next general meeting.

If none of the auditors keeps his/her position, the administrators shall urgently call the general meeting, which shall proceed to appoint other auditors.

Art.114. The auditors have the obligation to survey the administration of the company, to check whether the annual report and the profit and loss account are legally accounted for, and in accordance with the books, if the valuation of the assets was made according to the rules established for drafting the annual report.

The auditors shall issue a detailed report to the general meeting about the matters mentioned in the hereinabove shown paragraph, and also on the proposal that they think are necessary concerning the annual report and distribution of profits.

The general meeting cannot approve the annual report and the profit and loss account if these are not accompanied by the auditors’ report.

The auditors also have the following obligations:

a) to inspect the treasury monthly and unexpectedly and to check the existence of commercial papers or valuables which are the property of the company or have been received as pledge, surety or deposit;

b) to call the ordinary or extraordinary meetings if they were not called by administrators;

c) to take part in the ordinary and extraordinary meetings having the power to include on the agenda the proposals that they think necessary;

d) to ascertain the regular deposit of the guarantees by the administrators;

e) to make sure that the legal provisions, the terms of the incorporation contract and by-laws are complied with by the administrators and liquidators.

The auditors shall bring to the attention of the administrators the irregularities of the administration, and the violations of the legal provisions and corporate rules that they find, and shall bring to the attention of the general meeting the most important cases.

Art.115. The auditors have the right to obtain a monthly operation report from the administrators.

The auditors participate in the meetings of the administrators without a voting right.

The auditors are prohibited to disclose data concerning the company’s operations, that was acquired during the exercise of their mandate, especially to the shareholders or third parties.

Art. 116. To meet the obligation provided for by Art. 114 al. 2, the auditors shall confer together; in case of disagreement they can make separate reports, which shall have to be submitted to the general meeting.

The auditors may work separately to meet the other obligations provided for by the law.

The auditors shall record in a special register their debates and findings during the exercise of their mandate.

Art. 117. The extent and the effects of the liability of the auditors are determined by the rules applicable to the mandate.

Their revocation could be made only by the general meeting, with the vote requested at the extraordinary meetings.

The provisions of Arts.43, 100 and 108 are applicable to auditors.

Section V

Issuance of Bonds

Art. 118. The joint-stock companies may issue bearer or nominal bonds, for an amount not exceeding three quarters of the deposited and existing capital, according to the last approved annual report.

The nominal value of a bond cannot be less than one hundred ROL.

The bonds of the same issue must be equal in value and grant the same rights to their owners.

Art. 119. In order to proceed to the issuance of bonds by public subscription the administrators will publish a prospectus reviewed by the court in the area where the company headquarters are located, which will include:

a) name, business, purpose, headquarters address and duration of the company;

b) the registered capital and the reserves;

c) the date of the incorporation contract, of the alterations and the date of their publication;

e) the classes of shares issued by the company;

f) the total value of the bonds, which shall be issued and those which have already been issued, the method of reimbursement, the nominal value of the bonds, their interest, a mention on whether there are nominal or bearer bonds;

g) the liens on the real estate property of the company;

h) the date at which the decision of the general meeting which approved the bond issue was published.

Art.120. The bond subscription will be recorded on the copies of the prospectus.

The value of the inscribed bonds must be fully deposited.

The bonds must include the data shown under Art.119, the se quential number, and the schedule of capital and interest payments.

The bonds shall be signed according to the provisions of Art.62, par.4.

Art.121. The bondholders can convene a general meeting to deliberate upon their interests.

The meeting will be convened at the expense of the company which issued the bonds upon the request of a number of bondholders who represent one fourth of the issued and unpaid upon bonds, or, once they were appointed, upon the request of the representatives of the bondholders.

The rules provided for the ordinary meeting of the shareholders are also applicable to the meeting of bondholders as fast as the formalities, conditions, notice, terms, deposit of bonds, and voting are concerned.

The issuing company cannot participate in the debates of the meeting of bondholders, on the basis of the bonds that it owns.

The bondholders can be represented by representatives other than the administrators, auditors or the employees.

Art. 122. The legally convened bondholders meeting can do the following:

a) appoint a representative of bondholders and one or more deputies, who have the right to represent them against the company and in court, setting their remuneration; they cannot get involved in the administration of the company, but may attend its general meetings;

b) carry out all the acts of supervision and protection of their common interest or authorize a representative to carry them out;

c) set up a fund, which could be taken from the interest due to bondholders, to pay for the expenses necessary for the defense of their rights, establishing at the same time the rule for the administration of this fund;

d) oppose any change of the company by-laws or of the conditions of the loan (for which the bonds were issued), which could affect the rights of bondholders;

e) render an opinion concerning the issuance of new bonds.

The decisions of the meeting shall be brought to the attention of the company within three days since their adoption at the most.

Art. 123. A decision with a majority representing at least one third of the issued and unpaid bonds must be taken in order to ensure the validity of the proceedings provided for under Art.122 pars. a, b, c; in the order cases the presence at the meeting of the bondholders representing at least two thirds of the unpaid bonds, and the favorable vote of at least four fifths of the bonds represented at the meeting is required.
Art. 124. The decisions made by the meeting of bondholders are also on binding the bondholders who did not attend the meeting or voted against.

The bondholders who did not participate in the meeting or voted against, and requested to have their opposition recorded in the minute within the period and with the effects shown under Arts. 90 and 91 may take legal action against the decisions made by the meeting of bondholders in the competent court where the company headquarters are located.

Art. 125. The legal action of a bondholder against the company is not admissible if it has the same objective as a legal action started by the representative of bondholders or is contrary to a decision of the meeting of bondholders.
Art. 126. The bonds are payable by the issuing company on the due date.

Prior to the due date bonds of the same issue and of the same value can be paid for with a sum set by the company, higher than their nominal value, at a publicly announced lottery with at least 15 days in advance.

Section VI

Books of the Company and the Annual Report

Art. 127. In addition to the records provided for by law, the joint-stock companies must keep:

a) a register of the shareholders which shall show for each case the last name, the first name, the trade name, the domicile or headquarters address of the shareholders holding nominal shares, and also payments made for the share accounts;

b) a register of the sessions and debates of the general meetings;

c) a register of the meetings and debates of the Council of Administration;

d) a register of the meetings and debates of the managing committee;

e) a register of the debates and findings made by auditors exercising their mandate;

f) a register of bonds, which will show the total of issued and paid for bonds, and for the nominal bonds also the last name, first name, trade name, domicile or headquarters address of the bondholders.

The Council of Administration shall be in charge to keep the registers provided for by pars. a, b, c, and f, the managing committee shall be in charge to keep the one provided for by par. d, and the auditors shall be in charge to keep the one provided for by par. e.

Art. 128. The administrators have the obligation to provide access to the books provided for under Art.127, pars. a and b, to the shareholders and to issue upon request excerpt copies at the expense of the applicant shareholder.

They also have the obligation to provide access in the same conditions to the book provided for under Art.127, to the shareholders.

Art. 129. At least one month prior to the day set for the general meeting the administrators have to submit the company report for the previous fiscal period and the profit and loss account together with their report and supporting documents.
Art. 130. The annual report and the profit and loss account shall be prepared according to the conditions provided for by the law.
Art. 131. At least 5% of the company profits shall be set aside each year for the formation of the reserve fund, until this will reach a minimum equivalent of a fifth of the registered capital.

If for any reason, after formation, the reserve fund is reduced, then it shall be replenished according to the provisions of par.1.

Even though the reserve fund did reach the level provided for by par.1 it shall also include the profit obtained by the sale of the shares at a higher price than their nominal value, if this profit is not used for the payment of issuance or amortization expenses.

The founders, administrators, and the personnel of the company will share in the profits, if it is so provided by the incorporation contract or by-laws, or, in the absence of such provision, this was approved by the extraordinary meeting.

In all cases, the conditions of the participation (in profits) shall be established by the general meeting for each fiscal period.

Art.132. A copy of the annual report together with the reports of the administrators and auditors shall be deposited at the company headquarters, at the branches and subsidiaries within the 15 days proceeding the general meeting in order to be reviewed by shareholders.

At their own expenses, the shareholders could ask for copies of the annual report, the report of the council of administration, and auditors drawn up for the general meeting.

Art. 133. Within 15 days of the date of the general meeting the administrators have the obligation to deposit a copy of the annual report, accompanied by the profit and loss account, the report of the auditors, and the minute of the general meeting at the Register of Commerce and Financial Administration.

The annual report and the profit and loss account shall be published in the Official Gazette.

Art. 134. The approval of the annual report does not impede the right to legal action against administrators, directors, or auditors concerning their responsibility.
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