Frequently Asked Questions related to the establishment of a company
1. What are the types of Companies in Romania?
The types of Companies are the following: Partnership Firm, (S.N.C.), Limited Liability Company (S.R.L.), Simple Limited Partnership (S.C.S.), Joint-Stock Company (S.A.) and Joint-stock Limited Partnership (S.C.A.).
Each of these types of Companies has specific characteristics. Choosing one type of company depends on the way the managing person conceives the organization and the subsequent development of the business, the number of partners, the joint stock, as well others. The specialty consultant may explain to you the advantages and disadvantages of each form of organization, depending on your requirements.
2. What does the Constitutive Act of a Limited Liability Company (S.R.L.) have to contain? What about in the case of a Joint-Stock Company (S.A.)?
The Constitutive Act is very important. This document may put you in undesirable situations in the relation with the financing sources that could offer you a credit, may confer powers incommensurately big to a minority partner, and in the case of a decision making, it may become an obstacle by means of the way of definition of the necessary majority.
The constitutive act requires certain special clauses that establish if the administrators are allowed to set up by themselves bias points, to buy and sell by themselves real estate goods on behalf of the company, without any prior approvals, and others.
Therefore, a standard model of constitutive act can (and will) become a real problem. The specialists from Consultia are able to secure you against these problems, by creating a personalized constitutive act.
In regards to the mandatory clauses of a constitutive act of a Limited Liability Company (S.R.L.), this refers to:
1. Last name, first name, personal numerical code, place and date of birth, the address and the citizenship of the partners (in case they are natural persons); Name, registration number at the Chamber of Commerce, or the unique registration code, in accordance with the national law, the address and nationality of the partners (in case they are juridical persons).
2. The form, name, address and, if the case, the emblem of the company.
3. The object of activity, by mentioning the field and the main activity.
4. Subscribed and paid joint-stock, by mentioning the share of each partner, in cash or in kind;
5. The value of the share in kind and the means of the evaluation;
6. The date on which the subscribed joint-stock shall be entirely paid;
7. The number and the nominal value of the social parts, as well as the number of the social parts attributed to each partner for its share;
8. The administrators of the company, the powers that they have been invested, and the way they are to exercise these powers.
9. The share falling on each partner, for benefits and losses.
10. The secondary business quarters (branches, agencies, representative offices, or other without juridical individuality);
11. The duration of the company, the means of dissolution and liquidation of the company.
The constitutive act of a joint-stock company shall comprise all the clauses required in the case of a Limited Liability Company (S.R.L.), to which the following conditions and clauses shall be added:
1. The joint-stock paid by each share-holder shall not be less than 30% of the value of the subscribed joint-stock, and the rest of the joint-stock may be paid in maximum 12 months as of the date of registration.
2. The specification if the shares are registered or bearer share.
3. In case of more categories of shares, the number, the nominal values and the rights conferred to each category of shares shall be specified.
4. The guarantee that the administrators are obliged to deposit;
5. Last name, first name, place and date of birth, address and citizenship of the censors (if they are natural persons); the name, quarters and nationality of the censors (if they are juridical persons)
3. What is the minimum joint-stock of a Limited Liability Company? What about in case of a Joint Stock Company (SA)?
The minimum joint stock of a Limited Liability Company is of 200 RON (2.000.000 ROL). In the case of a Joint Stock Company the minimum joint stock amounts to 25.000 EURO.
4. How can a partner be excluded from a company?
A partner may be excluded if the company is under the form of a Partnership Firm (S.N.C.), Simple Limited Partnership (S.C.S.) and Limited Liability Company (S.R.L.). In case of a Joint Stock Limited Partnership (S.C.A.) only the acting partners (not the silent partners) may be excluded. The reasons for proceeding to a exclusion are stipulated in the Law no. 31/1990 republished with the subsequent modifications. The exclusion is pronounced by Court resolution at the request of the company or any of the partners. The partners (the shareholders) of a joint stock company cannot be excluded, except for the case when they have not made within the legal term the payment of the outstanding amounts to the company, and they have been summoned in accordance with the law. Shall such a situation arise, the Board of Administration shall be allowed to decide the cancellation of the afferent registered debentures and the issuance of new shares with the same number, which may be sold.
5. How can I withdraw from the Limited Liability Company where I act as partner?
The partner may withdraw in the cases stipulated by the constitutive act, with the agreement of all the other partners. If the constitutive act does not stipulate anything in regards to the withdrawal, or if the unanimous agreement of the other partners is not reached, the withdrawal may be made based on a Court resolution.
The part resulting from the company’s patrimony shall be established by means of the agreement of the partners, or by an expert designated by the partners. In case of any dissentions, it shall be settled by Court resolution.
6. I want to extend the activity of the company, establishing in this view subsidiaries or branches. What is the difference between these two and what is it better to establish: subsidiaries or branches?
The main difference is the fact that the subsidiaries have their own juridical individuality, whereas the branches do not. The subsidiaries are companies distinct from the initial companies, they take part to the juridical reports, in their own name, and they assume rights and obligations at their own liability. The ‘mother’ company holds the majority of the joint stock, this way controlling the subsidiary. The branches do not have an own juridical individuality, therefore the liability may extend and reach the ‘mother’ company.
The establishment of the branches is made under the conditions stipulated by the constitutive act, and are registered at the Chamber of Commerce afferent to the place of undertaking of the activity. If the constitutive act does not stipulate any clauses in regards to the branches, the general assembly of the partners shall dispose its modification.
The choice between a subsidiary and a branch is made depending on the characteristics of the business. The most suitable choice, in accordance with the targeted objectives, needs the advised analysis of a specialist.
7. What is the difference between a Limited Liability Company (S.R.L.) and a Partnership Firm (S.N.C.)?
The main differences between Limited Liability Companies (S.R.L.) and Partnership Firms (S.N.C.) are determined by the liability of the partners and the joint stock. In the case of a Partnership Firm, the partners are unlimitedly, jointly and severally liable, the creditors of the company being able to direct themselves against the partners. In the case of a Limited Liability Company the partner are liable only in the limit of the joint stock, (that is why there is a minimum joint stock stipulated for a Limited Liability Company (S.R.L.), whereas in the case of a Partnership Firm (S.N.C.), there is no such limitation.
8. What formalities need to be fulfilled in case of the withdrawal of a partner from a Limited Liability Company?
The constitutive act shall be modified, that is, the partners shall conclude an additional deed that consigns the withdrawal, as well as the other modifications of the constitutive act, resulting from the respective withdrawal: the joint stock, the apportionment of the benefits and losses between the remaining partners, and others. The modifier additional deed to the constitutive act shall be authenticated at the Notary Office, and shall be submitted at the Chamber of Commerce, after which it shall be transmitted ex officio to the Official Gazette for publication, at the company’s expense.
If the agreement of the other partners cannot be reached, the withdrawal shall be made based on a Court resolution.
9. One of the shareholders of a joint stock company has passed away. The shares are registered. What has to be done in order to make the transfer of the shares of deceased shareholder to its inheritors?
Following the death, the heritage shall be opened (started). By accomplishing the hereditary apportionment, each successor becomes exclusive owner of some goods (assets), and an assignee certificate shall be issued to this scope.
If the shares are falling on you, based on the assignee certificate, request the respective company your registration in the shareholders’ registry.
10. What advantages do I have if the debtor pays by means of promissory note (P/N) and not by means of money order?
The making of the payment by means of promissory note has the big advantage that, on falling due date, this becomes an executorial title. Namely, in case the debtor has not paid his debt, the creditor may request the law court the investiture of the promissory note with the executorial formula and invoke its enforced execution (so the necessity of obtaining a court resolution that would be afterwards invested with the executorial title is no longer needed, this being the necessary procedure in case of the payments made by means of money order).
11. What do I have to do in order to dissolve a company which has not increased its joint stock to the minimum amount stipulated by the law?
In case the joint stock has not been increased, in accordance with the law, the dissolution of the respective company may be requested by the Ministry of Finance, the Chamber of Commerce and Industry, or any other interested party.
12. What happens if the modifier documents of a Limited Liability Company are not registered at the Chamber of Commerce?
In case such documents are not registered at the Chamber of Commerce, they shall have full effects only between the signing parties. Thus, they shall not be opposable to third parties, and the consequences of these documents shall not apply in relation to third parties.
13. Can the authorized natural persons employ personnel? What about family associations?
The legislation does not include a special provision related to this. Many legal provisions (for e.g. Law no. 130/1999) comprise however provisions regarding the categories of employers and the work contracts concluded by them, the authorized natural persons and the family associations being mentioned as employers. Therefore, the authorized natural persons and the family associations may employ personnel.
14. Can a partner credit the company in which he is himself a partner?
The partners may conclude any kind of juridical document that is not forbidden by the law, therefore, also loan documents with other juridical persons. The companies have their own juridical individuality and may in turn conclude different juridical documents, including loan documents. There is no legal regulation that prohibits a loan document between the partners and the company.
15. I authenticated the constitutive act of a company but I have not yet registered the company at the Chamber of Commerce. Can I conclude a rental contract of a commercial space? What documents can I conclude until the registration at the Chamber of Commerce?
The juridical person may conclude, right from the date of the constitutive act, any kind of documents, but only if these are necessary for the company to be established viably. So, in the context given by the law, a rental contract of a commercial space may be concluded.