Amendments And Completions Brought By Law No. 223/2020 For The Simplification And Debirocratization Of The Shares Transfer And The Payment Of Share Capital By Amending The Companies Law No. 31/1990 (“Law No. 223/2020”) in Romania

As of November 11, 2020, the following legislative provisions come into force (Romania):

1. The minimum threshold of 200 RON as share capital is eliminated in the case of limited liability companies (hereinafter “LLC“);

2. The obligation to submit to the trade register the proof regarding the share capital payments in case of LLCs registration is eliminated;

3. The company registration or, as the case may be, the headquarters changing is no longer conditioned by the registration, in advance, at the tax authority, of the document certifying

the right of use over the space destined for the headquarters;

4. Oppositions of the company’s creditors or of other persons injured by the decisions of the shareholders regarding the amendment of the articles of incorporation may lead to the declaration of the nullity of the company, even if the cause of nullity was removed before putting conclusions in court;

5. The obligation of companies with an annual turnover of over 10 million RON to publish in the Official Gazette of Romania, Part IV, the notice confirming the submission of annual financial statements, their report and the auditors / financial auditors report to the fiscal bodies is eliminated;

6. The obligation of companies with an annual turnover below 10 million RON to publish on the National Office of the Trade Register’s website, the notice confirming the submission of annual financial statements, their report and the auditors / financial auditors report to the fiscal bodies is eliminated;

7. The imperative legal provision according to which the transfer of shares to persons outside the company may be done only with the approval of the shareholders representing at least three quarters of the share capital shall become a supplementary rule;

8. The registration in the trade register of the shares transfer to persons outside the company is done in a single step, using the registration request, thus eliminating the stage of filing and mentioning the decision of the general meeting of shareholders regarding the shares transfer to people outside the company.

By eliminating the minimum share capital threshold and one of the preconditions for the LLC registration, respectively submitting the proof of payments in the share capital account (and implicitly opening such an account) it manages to debureaucratize and speed up the establishment of the most common form of trading company: LLC.

1. The most important provisions amended from Law no. 31/1990 on trading companies (hereinafter the “Companies Law“) are represented by art. 11, which provided the condition for the LLCs to hold the share capital in a minimum amount of 200 RON and art. 36 para. (2), lit. b), which provided that, at registration, among other things, proof of share capital payment must be submitted in accordance with the articles of association. In practice, art. 11 involved going through the procedure of opening a share capital account in the name of the future company and depositing a minimum amount of 200 RON. In order to open such an account, the company’s representative had to present to the bank the following documents / information: identity documents of the shareholder/s and director/s in copy, the articles of incorporation signed in copy, reservation of name issued by the trade register in copy and contact details of the director/s. After registration, the share capital account was converted into the current account of the company, an account to which the balance representing the share capital is also transferred. 

By Law no. 223/2020, the minimum share capital threshold was eliminated in the case of LLCs and, at the same time, they were exempted from the obligation to submit the proof of share capital payments within registration in the trade register. 

Corroborating the two changes, even if the minimum share capital threshold has been eliminated, LLCs still have the following possibilities before registration: to open a share capital account in which to deposit any amount as share capital, to open a share capital account in which not to deposit any amount of money or not to open such an account at all. The advantage is that the company can be set up, regardless of the option chosen.

2. The next amendment brought by law no. 223/2020 refers to par. (3) in art. 17 of the Companies Law, which, although recently amended, still maintained the obligation to register, in advance, at the tax authority, the document certifying the right to use the space for headquarters when registering or changing the headquarters of the company. Currently, after setting up a company or changing the headquarters within the trade register, the document certifying the right to use the space for headquarters is sent to the tax authority even by the trade register office. As can be seen, this is another procedure that has been taken from the shoulders of the entrepreneur or the future entrepreneur.

3. Another amendment is the one included in art. 61 of the Companies Law on the right of opposition of company’s creditors or other persons injured by the decisions of the shareholders regarding the amendment of the articles of incorporation, to request the court to oblige, as appropriate, the company or the shareholders to repair the damage caused. In the previous form, the same article referred to art. 57 of the law stipulating that the nullity of the company cannot be declared if its case was removed before the conclusions are put in court. The new wording of the text of art. 61 no longer refers to art. 57 of the law, which means that the opposition of the company’s creditors or other persons injured by the decisions of the shareholders regarding the amendment of the articles of incorporation may lead to the declaration of nullity of the company, including if the cause of nullity was removed before conclusions are put in court.
4. The text of art. 185 para. (4) and para. (5) of the Companies Law provided, on the one hand, for the companies that have an annual turnover of over 10 million RON, the obligation to publish in the Official Gazette of Romania, Part IV, the notice confirming the submission of the annual financial statements, their report and the financial auditors / auditors report to the tax authorities, and on the other hand, in charge of companies with an annual turnover below 10 million RON, the obligation to publish on the National Office of the Trade Register’s website, the notice confirming the submission of the annual financial statements, their report and the financial auditors / auditors report to the tax authorities. By the amendment brought by Law no. 223/2020, both paragraphs have been repealed in its entirety, which means that the obligation to publish no longer exists for any of the companies in question.

1. A significant amendment also concerns art. 202 para. (2) of the Companies Law, which provided that the shares transfer to persons outside the company could not be carried out without the approval of the shareholders representing at least three quarters of the share capital. Law 223/2020 maintained the same quota, but conditioned by the fact that the articles of incorporation does not provide otherwise. Therefore, it can be observed that from an imperative norm, this provision has become a supplementary one, as long as the legislator grants the freedom to the founders / shareholders to provide in the articles of incorporation the quota regarding the vote of the shares transfer to persons outside the company. Likewise, it was facilitated the registration of this mention in the trade register, in the sense that it is done in a single stage, by using the registration request, thus eliminating the stage of filing and mentioning the decision of the general meeting of shareholders of shares transfer to outsiders.