Mergers and Corporate Reorganization in Romania: Legal Procedures, Advantages, and Challenges

The process of company restructuring in Romania, governed by Law No. 31/1990 on Companies and related legislation (such as Law No. 265/2022 on the Trade Register and for the amendment and completion of other normative acts concerning trade registration, and Law No. 222/2023 amending and supplementing the Companies Law No. 31/1990 and Law No. 265/2022), represents an essential legal instrument for adapting and consolidating corporate structures. These legal mechanisms, such as merger, merger between two companies, spin off, partial spin off, and total spin off, allow the optimization of operations, the restructuring of capital, and the capitalization of collaboration between entities. From a regulatory perspective, company restructuring involves strict compliance with creditor protection, transparency in decision-making, and approval by the general meetings of shareholders, in accordance with the provisions of the Companies Law and applicable European regulations.

In the case of a cross border merger project between two companies, the level of complexity increases significantly, as the operation requires the cumulative application of domestic and EU rules concerning the freedom of establishment and the mobility of commercial companies. The authorities, especially the Romanian Trade Register Office, play an essential role in verifying the legality of documents, issuing pre-merger certificates, and ensuring transparency throughout the process. Furthermore, a cross border spin off project must include detailed legal, economic, and technical elements of the operation, while the companies involved must properly inform shareholders and creditors to maintain a balance between all stakeholders’ interests.

Another key element in achieving an efficient company restructuring is the strategic and legal preparation phase, materialized through an association agreement and a rigorous due diligence process. These preliminary steps ensure that the decision to engage in a merger or merger through absorption is based on a realistic evaluation of risks, liabilities, and opportunities. In the current economic context, where a spin off—either total spin off or partial spin off—may serve as a protective or efficiency-enhancing alternative, choosing the appropriate legal form of company restructuring becomes a strategic management decision that must be implemented under the guidance of an experienced merger and acquisition lawyer or merger attorney.

In this context, the Romanian Law Firm Pavel, Mărgărit & Associates can assist you in managing all stages of company restructuring, including merger, merger through absorption, or merger between two companies, as well as in drafting and filing a cross border spin off project, preparing and verifying association agreements, and completing registration procedures with the Trade Register Office. Our team provides comprehensive legal and tax advice so that any spin off – total spin off or partial spin off – operation is carried out in full compliance with the law, under the guidance of an experienced merger and acquisition lawyer, ensuring an efficient company restructuring process without additional legal or fiscal risks.

Legal Framework of the Reorganization Process under the Companies Law

In Romania, the company restructuring of commercial companies, including through mergers and acquisitions such as merger or spin off, is based on the provisions of the Companies Law No. 31/1990, republished and periodically amended. This law establishes the fundamental principles governing structural transformations of companies, including creditor protection, shareholder rights, and internal decision-making procedures. For example, Article 243 provides mechanisms allowing creditors to oppose or request guarantees during company restructuring, while shareholders must be fully informed about the legal and financial consequences of the operation. Furthermore, recent amendments introduced by Law No. 222/2023 have expanded the law’s scope to include cross border mergers and acquisitions, reflecting new European realities regarding corporate mobility and reorganization.

A key related statute is Law No. 265/2022 on the Trade Register, which modifies the registration and disclosure procedures for corporate acts, including in the context of company restructuring. This law authorizes the registrar (the National Trade Register Office and its territorial branches) to perform legality checks on submitted documents and to be notified of any irregularities. Moreover, Law No. 222/2023 adapts Law No. 265/2022 to interconnect national trade registers across EU member states, facilitating information exchange for cross border mergers and acquisitions and spin off projects. Consequently, any company restructuring—whether domestic or cross border—must comply with both the Companies Law and Law No. 265/2022.

During the company restructuring process, companies may opt for various legal instruments: merger, merger through absorption, merger between two companies, spin off, partial spin off, or total spin off. The legislation details each operation’s procedural and substantive aspects: decision-making majorities, publication deadlines, shareholder opposition rights, asset and liability allocation, and creditor protection measures. The explicit inclusion of cross border mergers and acquisitions and cross border spin off projects in the Companies Law (through Law No. 222/2023) demonstrates Romania’s alignment with European legal standards regarding corporate mobility and international reorganizations.

Stages of a Cross Border Merger Project between Two Companies

A cross border merger project between two companies is a complex legal process that involves harmonizing national legislation with EU norms concerning corporate mobility and mergers and acquisitions. In the first stage, the participating companies must prepare a detailed merger plan that includes mandatory elements required by the Companies Law: company names, legal forms, registered offices, share capital value, shareholder structure, allocation of shares, and the evaluation of transferred assets and liabilities. This document must be drafted in authentic form, approved by the management bodies of each entity, and subsequently submitted to extraordinary general meetings for approval. This stage forms the legal and economic foundation of company restructuring, as it determines how corporate assets and liabilities will be merged or transferred.

The second stage concerns ensuring transparency and protecting the interests of creditors and third parties. According to the provisions of the Companies Law, complemented by Laws No. 265/2022 and No. 222/2023, a cross border merger or spin off project must be published either on the companies’ websites or in the Official Gazette, at least 30 days before the general meeting approving the operation. Each company is also required to notify competent authorities and file documentation with the Trade Register Office, including management reports, independent expert evaluations, and financial statements. During this phase, authorities verify the legality of the operation and may request clarifications, while creditors may submit objections or demand guarantees within the legally prescribed deadlines.

The final stage involves the effective registration of the cross border merger with the Trade Register Office, at which point the company restructuring becomes enforceable against third parties and produces legal effects. Depending on the method—merger or merger through absorption—the constitutional documents of the surviving or newly formed entity are amended and registered, and absorbed companies are dissolved. The effects of the merger generally occur on the registration date, although the parties may agree otherwise within legal limits. Throughout the process, the principles of transparency, legality, and creditor protection remain fundamental, ensuring that the spin off project or merger complies fully with both domestic and EU corporate law.

Merger through Absorption or Standard Merger – Essential Legal Differences

Within company restructuring operations, Romanian legislation provides two main forms of mergers and acquisitions: a merger through absorption and a merger between two companies creating a new entity. In a merger through absorption, one company takes over the entire assets and liabilities of another, which is subsequently dissolved in accordance with the Companies Law. The absorbing company then amends its articles of association to reflect new structural elements such as share capital, shareholder composition, business purpose, and any preferential rights. It becomes the universal successor to all rights and obligations of the absorbed entity. This type of company restructuring is often preferred for its practicality, lower costs, and efficiency, being widely used in corporate group consolidations, post-acquisition reorganizations, and business optimization scenarios handled by a merger and acquisition lawyer or merger attorney.

Conversely, a merger by consolidation involves the simultaneous dissolution of the participating companies and the incorporation of a completely new legal entity that inherits the total assets of both. This procedure is more complex, requiring additional formalities, including the preparation of a cross border spin off project if one of the companies is based in another EU Member State. This form of company restructuring is particularly common when the objective is a strategic reconfiguration on an international scale, adaptation to competition regulations, or alignment of fiscal regimes across jurisdictions. Although more expensive and time-consuming, this form of merger can yield significant structural benefits for future corporate development, particularly when supervised by a skilled merger attorney familiar with mergers and acquisitions and cross border corporate regulations.

From a legal standpoint, the differences between a merger through absorption and a merger by consolidation relate primarily to the timing of legal effects and notification obligations. The legal consequences of a merger typically occur on the date of registration at the Trade Register Office, marking the universal transfer of assets and liabilities. In addition, publication procedures, creditor opposition deadlines, and tax authority reporting obligations—including those to the National Agency for Fiscal Administration (ANAF)—are distinctly regulated. The Companies Law, as updated through Law No. 265/2022, clarifies key aspects such as employee protection, minority shareholder rights, and the effective date of company restructuring, particularly in cases involving a cross border spin off project or merger. So, the choice between a merger through absorption and a standard merger depends on economic objectives, existing legal structures, and the applicable regulatory framework for each transaction.

Registration Procedure at the Romanian Trade Register Office in the Case of a Merger

The registration procedure for a merger at the Romanian Trade Register Office constitutes the final stage of the company restructuring process and plays a crucial role in conferring full legal effect to the operation. According to Article 242 of the Companies Law, the process begins with the submission of the merger project signed by the legal representatives of the participating entities, accompanied by supporting documentation such as debt extinguishment declarations, management reports, independent expert evaluations (where applicable), merger financial statements, and proof of project publication. These documents are filed with the competent registrar of the Trade Register Office where the companies are incorporated, the main objective being to verify compliance and legality across the entire mergers and acquisitions process so that third-party rights are fully respected.

Once the legality check is complete, the Trade Register Office proceeds to publish the merger project in the Official Gazette of Romania, Part IV, or alternatively on the websites of the companies involved, depending on their chosen method and the provisions of the Companies Law. Publication must occur at least 30 days before the extraordinary general meeting that will approve the merger or spin off project. During this transparency period, creditors may file objections, and companies may offer guarantees to settle outstanding obligations. This public phase is vital to ensure legal certainty and constitutes an essential condition for the validity of the merger, spin off, or any form of company restructuring.

Following approval by the general meetings and adoption of the amended articles of association, the companies submit the final registration application, together with relevant documents: shareholder resolutions, updated articles of association, final financial statements, proof of fee payment, and, if applicable, the pre-merger certificate issued for a cross border merger or spin off project. Upon full verification, the Trade Register Office registers the merger, updates the data of the absorbing company, and deletes the absorbed entity. In mergers and acquisitions involving a cross border component, the registrar may request additional documents concerning the establishment of the new company.

For cross border transactions, the authorities retain the right to refuse issuance of the pre-merger certificate if there is suspicion of fraud, abuse of rights, or tax evasion. This ensures strict compliance with the Companies Law and the protection of the integrity of the business environment. Consequently, a properly managed company restructuring, supported by a specialized merger and acquisition lawyer or merger attorney, guarantees that each merger, spin off, partial spin off, or total spin off is executed in full legal conformity and achieves both operational efficiency and regulatory compliance.

Company Division and Partial Division: Alternatives to Merger

A company restructuring through a spin off represents a legal reorganization alternative to a merger, regulated by the Romanian Companies Law, whereby the assets of a company are divided and transferred, in whole or in part, to one or several existing or newly established companies. In the case of a total spin off, the original company ceases to exist, and all its rights and obligations are universally transferred to the beneficiary entities. In contrast, a partial spin off involves transferring only a portion of the assets — for example, a business line, a production unit, or a set of assets — to another company, while the initial entity continues to exist and operate. Both forms produce legal effects similar to those of a merger, but provide greater structural autonomy and flexibility in managing assets and liabilities, making them essential tools within mergers and acquisitions frameworks managed by an experienced merger attorney or merger and acquisition lawyer.

The spin off project procedure is strictly regulated and requires drafting a detailed reorganization plan signed by company representatives, in accordance with the Companies Law. The document must be filed with the Trade Register Office and published in the Official Gazette or on the company’s website at least 30 days before the extraordinary general meeting that will decide on the operation. This period ensures transparency and allows creditors to file objections if they consider that the company restructuring could adversely affect their rights. The spin off project must include information about the allocation of assets and liabilities, the valuation report for transferred goods, and the method of granting shares or equity to the partners. In the case of a partial spin off, these provisions apply proportionally, and the articles of association of the companies involved must be amended accordingly.

The advantages of a spin off, whether a total spin off or a partial spin off, are multiple. They allow companies to separate business lines with different risk profiles, achieve fiscal optimization, and efficiently organize assets within corporate groups. Furthermore, these mergers and acquisitions alternatives facilitate the entry of strategic investors without requiring a full merger through absorption or the creation of a new company. However, such company restructuring operations demand thorough legal and accounting analysis to ensure balanced asset distribution and uphold creditor protection principles. The Romanian Companies Law, together with Law No. 265/2022, strengthens guarantees of legality and transparency for both merger and spin off project types, establishing a procedural framework that prevents abuse and ensures the stability of all business entities involved.

In practice, an experienced merger and acquisition lawyer or merger attorney plays a crucial role in structuring a spin off project efficiently, ensuring compliance with the requirements of the Trade Register Office and coordination between the corporate and fiscal implications of the company restructuring. Thus, both merger and spin off operations serve as strategic instruments within the broader framework of mergers and acquisitions, supporting the sustainable development and competitiveness of companies in Romania and abroad.

Association Agreement and Due Diligence in Merger Operations

In the preparatory phase of any merger or company restructuring, the parties involved may conclude an association agreement or memorandum of understanding establishing the negotiation framework, deadlines, conditions precedent, and interim rights and obligations of participants. This agreement acts as an essential legal instrument for organizing the mergers and acquisitions process, ensuring that all fundamental aspects of the transaction are clearly defined before final approvals and submission of documents to the Trade Register Office. By means of such an agreement, the parties can prevent conflicts and set clear responsibilities in case of changes in circumstances or the withdrawal of one of the companies involved. The support of a qualified merger and acquisition lawyer or merger attorney is essential at this stage to guarantee full compliance and risk mitigation.

A central element of the due diligence process involves a detailed assessment of assets, liabilities, ongoing contracts, litigation, tax obligations, and legal compliance for each participating company. This comprehensive analysis ensures that the decision to proceed with a merger, merger through absorption, or spin off is based on accurate and complete data, minimizing hidden risks that could negatively impact corporate assets or liabilities. The due diligence phase also facilitates necessary adjustments in the spin off project or merger plan and ensures adequate information for shareholders and creditors, in accordance with the Companies Law and relevant cross border provisions.

In the case of a cross border merger or company restructuring, the due diligence process must be expanded to include an analysis of fiscal and commercial regulations in the partner state, currency risks, employee rights, data protection rules, and compliance with European directives. Within this framework, the association agreement may include specific exit clauses, penalty provisions for non-compliance, and dispute resolution mechanisms, providing legal certainty and predictability for all parties involved. The combination of a robust association agreement and thorough due diligence provides a solid foundation for an efficient and lawful company restructuring, reducing risks in complex cross border mergers and acquisitions. So, the expertise of a merger and acquisition lawyer or merger attorney ensures that all procedural, fiscal, and regulatory dimensions of a merger, spin off (toal or partial spin off), or spin off project are properly managed, turning potentially complex corporate transformations into secure and sustainable company restructuring initiatives.

Therefore, corporate company restructuring operations — whether through mergers and acquisitions, merger through absorption, standard merger, partial spin off, or total spin off — represent complex yet essential legal mechanisms for adapting companies to modern market requirements. In the context of economic expansion and European integration, cross border mergers and acquisitions have become strategic solutions for capital consolidation and corporate structure optimization. Ultimately, the success of any company restructuring, whether a merger, spin off, or spin off project, depends on harmonizing strategy, legal compliance, and the professional guidance of an experienced merger and acquisition lawyer or merger attorney, ensuring both regulatory conformity and long-term business growth.

Pavel, Margarit and Associates Law Firm is one of the top law firms in Romania, providing high-quality legal services. The firm’s clients include multinational and domestic companies of great magnitude. In 2025, the law firm’s success stories brought it international recognition from the most prestigious international guides and publications in the field. As a result, Pavel, Margarit and Associates Law Firm ranked 3rd in Romania in the Legal 500’s ranking of business law firms with the most relevant expertise. The law firm is internationally recognized by the IFLR 1000 Financial and Corporate 2025 guide. Additionally, Pavel, Margarit and Associates Law Firm is the only law firm in Romania recommended by the international director of Global Law Experts in London in the Dispute Resolution practice area. All relevant information about Pavel, Margarit and Associates Law Firm can be found on the website www.avocatpavel.com.