Romania Company Law - Nov17 - 1990 No:31 - Limited Liability Companies

Romania Company Law

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Chapter III

Limited Liability Companies

Art. 32. The limited liability company will be organized by contract and by-laws, which shall be authenticated. The contract shall include the information required under Art.3 for the general partnership and the share distribution.

Contribution in labor and debts of third parties cannot be allowed as consideration.

The assets representing contribution in kind are transferred at the time of company organization.

The shares cannot be represented as negotiable instruments.

The administrators will issue upon request a certificate concerning the rights to the shares, with the mention that it cannot be used as a negotiable instrument under the sanction of the nullity of the transfer.

Art. 33. If, in addition to shares, any shareholder assumes as an obligation to the company periodical contributions in kind, the company contract will determine the content, duration and kind of contributions, the compensation owed and sanctions against the shareholders who do not deliver on their obligations
Art. 34. The limited liability company may not have more than 50 shareholders.

The capital may not be lower than 100,000 ROL and may be divided in shares, which may not be less than 5,000 ROL.

The contributions in kind may account for at most 60% of the capital.

The company contract and the by-laws will be submitted, according to Art.22, to the court in the county where the company established its headquarters, to obtain the authorization for operation according to Art.23.

The provisions of Arts.3, 5, 6 and 26 will also apply to liability companies.

TITLE III

The Operation of Business Organizations

Chapter I

General Provisions

Art. 35. Failing a contrary provision the assets brought in as contribution become the property of the company or partnership.

The shareholder or the partner who is late in paying his/her contribution is liable for damages and if his/her contribution was cash he/she is liable for legal interest as of the day when the payment was due.

Art. 36. Over the duration of the company or the partnership, the creditors of the shareholders or of the partner can exercise their rights only against that part of the benefits due to the shareholder or partner after the issuance of the balance sheet and after the dissolution of the company or partnership, against his/her remaining share.

However, during the operation of the company or partnership the creditors mentioned in paragraph 1 can attack the share which would be given to the shareholder or partner upon dissolution or can seize and sell the shares of their debtors.

Art. 37. The profit quota which will be paid to each shareholder or partner is the dividend.

The dividends will be paid to the shareholders or partners in proportion with the capital participation quota.

The dividends will only be paid out of real benefits.

The dividends paid contrary to the above mentioned provisions will have to be paid back.

The right to action for return of the dividends can be exercised three years after the date of distribution only.

Art. 38. The contribution of the shareholders or partners to the capital does not bear interest.
Art. 39. If there is a decrease of the capital, this will have to be brought back to the registered level or reduced prior to any profit allocation or distribution.
Art. 40. The administrators may undertake all operations required to attain the business scope of the company or of the partnership, except the restrictions provided for in the company contract.

They have the obligation to take part in all the meetings of the company or the partnership, of the administration councils and similar management bodies.

Art. 41. The administrators who have the right to represent the company or partnership can transfer such rights only if such power was expressly granted to them.

Upon breach of provisions of paragraph 1 the company or the partnership is not liable to third parties, but it can claim the profits realized by the transferee as a result of the transfer.

The administrator, who illegally agrees to his/her substitution by another person, will be jointly liable with the transferee for the damages caused to the company or partnership.

Art.42. The obligations and liability of the administrators are regulated by the provisions concerning the mandate and those provided by this statute.
Art.43. The administrators are jointly liable to the company or partnership for:

a) timely payments which have to be made by shareholders or partners;

b) legality of paid dividends;

c) maintenance of records required by law and safe keeping;

d) execution of decisions of general meetings;

e) strict compliance with the obligations provided for by law, the incorporation or partnership contract and by-laws.

The right to sue the administrators may also be exercised by the creditors of the company or partnership, but only upon the bankruptcy of the company or partnership.

Art.44. Any document, letter or publication issued by the company or partnership must indicate the trade name, recording number in the Register of Commerce, type of company or partnership, and the headquarters address.

With regard to the limited liability company the registered capital has to be mentioned and with regard to the joint-stock company and limited partnership by shares the registered capital and the deposited capital according to the last approved balance sheet have to be mentioned.

Chapter II

Partnerships

Art. 45. The right to represent the partnership belongs to each administrator, unless otherwise provided for in the partnership contract.
Art. 46. If the partnership contract provides that the administrators must work together, the decision must be made by unanimity; in case of disagreement among the administrators, the decision will be made by the partners representing the absolute majority.

In case of emergency decisions, which if not taken would cause serious damages to the partnership, an administrator, in the absence of others caused by temporary impossibility to participate in the administration, may take such decisions.

Art. 47. The partners representing the absolute majority may elect one or more administrators from their ranks, establishing their powers, duration of appointment and their remuneration, unless otherwise provided for in the partnership contract.

The same majority can decide the revocation of the administrators or the limitation of their powers, except in the case that the administrators were appointed by the partnership contract.

Art. 48. If an administrator takes the initiative of a transaction exceeding the limits of a transaction in the ordinary course of business carried by the partnership, prior to its closing, he/she must advise the other administrators thereof, otherwise he/she will be liable for the losses caused by that transaction.

If there is opposition by any administrator to the transaction, the decision must be taken by the partners holding the absolute majority of the capital.

The transaction concluded against such opposition is valid against the third parties who did not have notice of the opposition.

Art. 49. The partner who, in a specific transaction, has on his/her own or other’s account interests contrary to those of the partnership cannot take part in any proceeding or decision concerning that transaction.

The partner who violates the provisions of paragraph 1 is liable for the damages caused to the partnership, if without his/her vote the required majority had not been met.

Art.50. The partner who, without written consent of the other partners uses the capital, the assets, or the credit of the partnership for his/her own or other’s benefit, must reimburse the benefits to the partnership and pay for the damages caused.
Art. 51. None of the partners can take out of the partnership’s funds more than he/she was awarded for his/her expenses or for those that he/she will make in the partnership’s interest.

The partner who violates this provision is liable for the sums taken and for damages.

The partnership contract may provide that the partners may take out of the partnership’s funds certain sums for their private expenses.

Art. 52. The partners cannot become partners with unlimited liability in another competitor partnerships or having the same business scope, nor undertake transactions on their own or other’s account in the same line of business without the consent of the other partners.

The consent is deemed given if participation or transactions undertaken prior to the partnership contract have been known by the other partners and they did not raise objections.

Upon violation of provisions of paragraphs 1 and 2, the partnership, other than excluding the partner, may decide that he/she worked on his/her own account or ask for damages.

This right will lapse after three months since the day when the partnership got knowledge of the aforementioned situations and did not make any decision.

Art. 53. If several persons made contributions to the capital, they are jointly and severally liable to the partnership and have to appoint a common representative for the exercise of their rights accruing from their contribution.
Art. 54. The partner whose contribution includes one or several debts of third parties (bonds) is not released of his/her obligations as long as the partnership did not get the payment of the sums for which these bonds were deposited.

If payment cannot be collected from the third party, the partner is liable for damages and legal interest as of the due payment date.

Art. 55. The partners have an unlimited joint and several liability for the operations carried on behalf of the partnership by the representatives.

The court decision issued against the partnership is executory against each partner.

Art. 56. For the approval of the annual report and for the decisions concerning the liability of the administrators the vote of the partners holding a majority of the capital is needed.
Art. 57. The transfer of partnership interest is allowed if it is allowed by the partnership contract.

The transfer does not release the transferor partner of what he/she still owes for his/her share of capital to the partnership.

The transferor partner is liable to the third parties according to the provisions of Art.168.

If the partnership contract provides for the retirement of a partner the provisions of Arts.168 and 170 will be applicable.

Chapter III

Limited Partnerships

Art. 58. The administration of the limited partnership will be entrusted to one or more general partners.
Art. 59. The limited partner may conclude operations on behalf of the limited partnership only if he/she has a special mandate for specific operations issued by the representatives of the limited partnership which is recorded in the Register of Commerce. Otherwise, the limited partner has an unlimited joint and several liability for all obligations of the partnership as of the date of the operation concluded by him/her.

The limited partner may handle tasks concerning the internal administration of the limited partnership, supervisory assignments, participate in the appointment and revocation of the administrators, according to the law, or grant, within the limits provided for by the partnership contract, authorization to the administrators for operations exceeding their powers.

The limited partner has also the right to ask for a copy of the annual report and profit and loss account and to control their accuracy by a review of the books and supporting documents.

Art. 60. The provisions of Arts.45, 46 paragraph 1, Arts. 47, 49, 53, 54, 56, and 57 will also apply to limited partnerships and provisions of Arts.50, 51, 52, and 55 to limited partners.
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