Incorporation of Companies in

Romania
Legal Framework
Company Law no. 31/1990
/
Trade Registry Law no
no. 26/1990

Types of Corporate Business Entities

Limited Liability Company (Romanian: societate cu raspundere limitata ,

S.R.L.)
Stock Company (Romanian: socieate pe actiuni, S.A.);
General Partnership
p ((Romanian: societate in nume colectiv,, S.N.C.);
);
Limited Partnership (Romanian: societate in comandita simpla, S.C.S.);
Partnership limited by stocks (Romanian: societate in comandita pe
actiuni S.C.A.).
actiuni,
SCA)
Most of the companies incorporated in Romania are limited liability
companies and stock companies, because of the fact that the
partners/shareholders are held liable within the limits of their subscribed
share capital.

Types of Companies:

Person companies (Romanian: societati de persoane): general partnership,

limited partnership, partnership limited by stocks, limited liability
companies. These companies are established in consideration of the persons
that set up the company. There are stricter rules when it comes to
transferring
f i the
h shares
h
andd taking
ki decisions
d ii
in
i the
h company.

Capital companies (Romanian: societati de capitaluri): stock companies.

Incorporation of a company:

Can last up to five working days from the submitting of the incorporation
documents at the trade registry;

g with 15 days
y when the word Romanian or national
It can be pprolonged
is included in the company s name due to the necessity to obtain special
endorsements;

Certain approvals are necessary, depending on the subject of activity of the

company.

Headquarters of the company:

It is not allowed for more companies to have their headquarters in the

same location, except for some specific situations (for example if they
establish their headquarters temporarily at the headquarters of a law firm
and they do not unfold any activities there);

It is allowed for more companies to have their headquarters in the same

building, apartment, provided that the location enables the independent
functioning of more companies and that each company has at least one
room that it uses solely (the room must be identified on the plan of the
building attached to the application that is submitted at the trade registry);

CAEN code and object of activity

CAEN code of the object of activity (Romanian: CAEN Clasificarea

activitatilor din economia nationala, classification of the activities from the
national economy);
Activity field, main activity field (only one can be chosen), auxiliary
activity fields (there is no limit to how many can be chosen, but it is not
recommended to choose all CAEN codes because some require
authorizations);
The main activity field, as well as the auxiliary activity fields must be
included in the incorporation documents of the company;
The main activity field may be changed by decision of the shareholders;
The auxiliary activities may be extended or restricted anytime, by filling an
application at the trade registry.

List of the documents that should be submitted at the trade

registry for the incorporation of a company:
Applications (they can be found on the website of the trade
registry);
it )
Reservation of the name of the company (the name can be reserved
at the trade registry, except for names that include certain words
Romanian
Romanian , national;
national ; these require a special approval );
Proof that the share capital has been paid by the shareholders to a
bank account opened on the name of the company (the capital has to
be ppaid at least ppartially,
y depending
p
g on the type
yp of company;
p y for the
limited liability company it has to be paid fully);
Declaration of the administrator that it fulfills the conditions
required by Romanian law to be administrator and that it accepts the
position in the company;
Declarations of the shareholders that they fulfill the conditions
required by Romanian law to be shareholders;
Signature sample of the administrator;

List of the documents that should be submitted at the trade

registry
i t for
f the
th incorporation
i
ti off a company:

Proof of the right to have the headquarters established in a certain location

from Romania (for example property title of the building, rental
agreement);
Empowerments from the shareholders if they do not submit the documents
themselves;
Incorporation documents (articles of incorporation, constitutive act); they
should be signed either by the shareholders or by the persons empowered
to represent them based on a special power of attorney. The substantially
and formal requirements of these documents are included in Company Law
31/1990.

Particularities of S.R.L.

The minimum share capital

p
is of: 200 RON;; the value of a
social part cannot be lower than 10 RON;
It can be established even only with a sole shareholder, either
natural
t l or legal
l l person; a natural
t l or a legal
l l person (Romanian
(R
i
or foreigner) can act as sole associate only for one limited
liability company;
Particularity: A limited liability company cannot have as sole
shareholder a company which is held by a single person;

Particularities of S.R.L

Is managed by one or more administrators, natural or legal persons, that are

empo ered to represent the company
empowered
compan before third parties.
parties
Every share gives the right to a vote. The decisions need in principle the
absolute majority of the shareholders, as well as the absolute majority of
share capital. Still, it can be stipulated expressly in the incorporation
d
document
off the
h company that
h the
h absolute
b l majority
j i off the
h share
h capital
i l is
i
enough for taking a decision.
Transfer of the shares in the company can be done unlimitedly among the
p y; to third parties
p
onlyy provided
p
that
shareholders of the company;
shareholders holding at least 75% of the share capital agree to the transfer.
The convening of the general meeting of the shareholders can be done by
the administrator/ shareholders holding at least 25% of the share capital.
The convening must be done 10 days before the actual meeting and the
agenda of the meeting has to be transmitted to all participants.
In case there is only one shareholder, all the prerogatives of the general
meeting of the shareholders shall be exercised by the sole shareholder.

Particularities of S.A.

The minimum social capital: 25.000 EURO; the nominal share value
cannot be lower than 0,1RON; the minimum number of shareholders
cannot be less than 2;
All shares have the same nominal value and they can either be bearer stock
(Romanian: actiuni la purtator) or registered stock (Romanian: actiuni
nominative). Stocks are divided between ordinary stocks and preference
stocks (they are entitled to dividends before ordinary shares but lack the
right
i h to vote in
i the
h generall meeting);
i )
If the constitutive act does not provide otherwise, the transmission of the
shares does not require the approval of the other shareholders;

Particularities of S.A.

The convening of the general meeting of the shareholders is done at least

once a year and whenever else it is considered necessary. General meetings
can be ordinary (for the approving of the annual financial situations) or
extraordinary (for the increase of the share capital, for taking decisions on
the
h division
di i i or merging
i off the
h company),
) depending
d
di on the
h importance
i
off
the agenda. The quorum of the general meeting varies, depending on the
type of general meeting and on whether it is the first convening with the
same agenda or not;
Special rules regarding the shares transactions, the increase of the social
capital, other important amendments of the constitutive acts are applicable
to the public listed stock companies (open companies).
companies)

Duration, Expenses, other related Information

Generally, the total cost of establishment of a limited liability company

amounts to Euro 200-250 (all registration and honoraria fees included);

p
if a company
p y jjustifies no interest in runningg its
Standbyy companies:
activity on a limited basis, it has the possibility to file an application with
the trade registry office for the suspension of its activity (for a max. of 3
years); as a consequence, the company is not required, within the
suspension period, to submit all the financial reports as in the case of the
companies who activate effectively.

Options

In the registration file at the Trade Registry Office, the company is

registered as a micro-regime company (it is subject to an income tax of
3%), unless the normal VAT regime is chosen (this can happen only if the
company has a social capital of at least the equivalent of Euro 25.000 and it
d
does
not unfold
f ld banking
b ki activities,
i i i ensuring
i andd gambling).
bli )

If the turnover of Euro 65.000 is exceeded, the V.A.T regime is

automatically applicable starting with the next fiscal year.

Options

A company remains registered with a micro-company regime, if the

following requirements are fulfilled (art. 112 of the Fiscal Code):
It has as object of activity the production of goods, services supply (except
for management and consultation, which can only represent maximum 20%
of the turnover) and/or trade;
Maximum annual turnover is Euro 65.000;
The share capital is not owned by the state or local authorities.
The company that does not fulfill one of above-mentioned
above mentioned conditions shall
be automatically subject to corporate income tax starting with the trimester
when one of the conditions is no longer fulfilled (the profit tax represents
)
16 %).
The company choses the micro-company regime from its incorporation and
it shall only be subject of corporate income tax when the turnover shall
exceed the equivalent of Euro 65.000.

Thank you!
Thankyou!

DanielaGrigoras
Daniela
Grigoras
lawyerandinsolvencypractitioner
0722 513 890
0722513890
cabinetdeavocat.dg@gmail.com