Fiscal package 2: Extended liability for company administrators in Romania

New limits of responsibility for administrators and shareholders in Romania – What risks arise in 2025

Fiscal Package 2 aims to reduce the phenomenon of company decapitalization in Romania and to further hold administrators accountable. Stricter liability is introduced for situations in which the company grants loans or distributes interim dividends without proper regularization. In such cases, administrators and shareholders risk sanctions, and tax attorney authorities receive additional powers for control and fines.

A key element is the establishment of joint liability between the company and the shareholder who benefited from dividends or loan repayments in violation of the law. This approach requires administrators to closely monitor the share capital and net asset levels to avoid penalties.

Additionally, administrators must consider that failing to comply with bank account obligations, establishing legal reserves, and covering accounting losses may be interpreted as negligence. In this context, the role of a business lawyer or commercial lawyer becomes essential in preventing disputes.

Changes to company legislation concretely expand the limits within which administrators and shareholders can be held liable. One of the most important changes concerns the distribution of dividends when net assets fall below half of the share capital, meaning dividends cannot be paid before the net assets are restored.

Clear administrative sanctions are also introduced, consisting of fines ranging from 10,000 to 200,000 RON, applied by tax attorney authorities for romanian company that distribute dividends or grant loans without following regulations. This approach aims to increase financial discipline and reduce the risk of insolvency.

Administrators must view the new liability limits as a set of firm obligations. Thus, a corporate lawyer or lawyer for taxes can provide strategic advice to prevent personal exposure to liability and to properly manage tax obligations and company responsibilities.

Creditors of romanian company benefit from enhanced protection. If net assets fall below half of the share capital and the company does not restore them within the legal term, administrators and shareholders may be held liable for damages caused to creditors.

Converting shareholder or associate loans into company share capital becomes mandatory in certain situations to prevent depletion of company resources. This means that share capital acquired through conversion can replace debts owed to associates, strengthening the company’s assets and protecting creditors.

In this context, the role of a corporate lawyer and business attorney is to advise on necessary legal steps, oversee company formation in romania, and manage major share capital procedures, preventing litigation. Administrators must also ensure an active bank account and timely, correct reporting to tax attorney authorities.

Strengthening the Liability Regime of Administrators for Bringing Companies into Insolvency in Romania

Administrator liability is strengthened through a direct link between mismanagement actions and the risk of insolvency. If the company becomes insolvent due to illegal dividend distribution or loan grants, administrators can be sued to cover the damages. Failure to maintain legal reserves or to uphold minimum net asset levels relative to minimum share capital constitutes a violation. This may trigger responsibilities of an administrator towards creditors and result in joint liability between the company and associates.

To mitigate these risks, companies should collaborate closely with a business lawyer or commercial lawyer, monitoring legal and fiscal matters. Regular checks on fiscal status at tax attorney authorities and advice on major share capital procedures are essential tools for preventing insolvency.

Liability of Administrators and Shareholders to Creditors under the New Capital Requirements in Romania

Creditors enjoy enhanced protection. If net assets drop below half of minimum share capital and the company does not restore them within the legal term, administrators and shareholders may face shareholder liability for damages caused.

Conversion of shareholder or associate debts into company share capital is mandatory to prevent reduction of company resources. This ensures share capital obtained through conversion replaces loans, preserving the company’s assets.

A corporate lawyer and business attorney can advise on legal steps, oversee company formation in romania, manage major share capital, and prevent disputes. Administrators must maintain an active bank account and comply with reporting obligations to lawyer for taxes authorities.

Joint Liability of the Company and Shareholders/Associates Who Received Interim Dividends in Romania

A central aspect of the law is establishing joint liability between the company and the shareholder/associate who received interim dividends illegally. This directly penalizes abusive business transfer of share capital.

If dividends were not regularized and net assets fell below legal limits, tax attorney authorities may impose significant fines. Civil consequences can also be applied to enforce responsibilities of an administrator.

Collaboration with a business attorney and a corporate lawyer becomes a necessity, ensuring compliance in dividend distribution and business transfer, reducing litigation and sanctions risk.

Bank Account Obligations, Capital Increase, and Fiscal Inactivity – Additional Risks for Administrators Not Complying with the Law in Romania

Administrators must ensure an active bank account through which all company transactions are processed. Lack of an active bank account may raise suspicions of fiscal misconduct and attract fines from tax attorney authorities.

If net assets fall below legal thresholds, administrators are obliged to carry out major share capital increases. Failure to do so engages the responsibilities of an administrator directly towards creditors and fiscal authorities.

“Given the new rules regarding share capital, bank account, dividend distribution, and tax obligations, administrators and shareholders must pay special attention to compliance with all procedures and deadlines imposed by the trade registry and tax attorney authorities. Noncompliance can lead to sanctions, administrator liability, and risks for the company,” stated Dr. Radu Pavel, Managing Lawyer.

Finally, fiscal inactivity declared by tax attorney authorities may lead to loss of VAT deduction rights and severe penalties. To avoid such consequences, administrators should regularly seek advice from a business attorney, lawyer for taxes, or corporate lawyer, especially for sensitive processes like starting up your own business, start a business in Romania, or sale purchase agreement procedures.

In conclusion, the 2025 legal framework strengthens administrators’ and shareholders’ liabilities, making the safety of the company dependent on compliance with rules regarding share capital, bank account, dividends, company share capital, and reporting to tax attorney authorities. Continuous collaboration with a business lawyer or business attorney is no longer optional but a practical necessity to protect the romanian company and its administrators.

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 2024, 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 2024 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.