The selling or buying a company in Romania are strategies that are often applied in practice, being recognized for the multitude of benefits for the shareholders, both parties taking the advantages of it.
In order to sell a business in Romania, the shares held by the shareholders will be transferred to other minority or majority of shareholders, in which case the provisions of Romanian Companies Law no. 31/1990 must be applicable. The law firm Pavel, Margarit and Associates recommends using a specialized lawyer in commercial and corporate law, mergers and acquisitions who can advise in order to go through the necessary steps to sell/buy your Romanian business.
The sale/ buy of the Romanian company by assignment of shares. The sale and purchase agreement of shares.
The assignment of the shares represents the transfer of the shares to the new shareholders who will acquire the quality of new shareholder in the Romanian business.
The sale and purchase agreement of shares will be concluded between assignors, natural or legal persons, shareholders in the Romanian company whose shares are transferred and assignees, natural or legal persons, who take the shares from the assignors. It can be concluded under private signature, being the most important document involved in this process, whereas it sets out important elements such as the rights and obligations of the parties, damages in case of default, or the price of the transfer.
The sale and purchase agreement of shares can be divided into simple or complex agreements, from the perspective of undertaking the rights and obligations and also from the perspective of the liability generated by the breach of agreement, the compliance with conditions precedent, or conditions subsequent.
Also, the shareholders of the assignment of shares may be interested in including drag along / tag along clauses either in the articles of association or in the shareholder agreement, by amending them, to facilitate the sale of shares in the Romanian company.
These clauses must correspond to the specifics of each type of Romanian company which is why we consider essential to use the services of a lawyer specialized in mergers and acquisitions and commercial law who can set out how the parties really want to engage in the Romanian business.
The steps and the procedure for registering the assignment of shares.
The assignment of shares to shareholders outside the Romanian company will have to comply with the provisions of the articles of association. If the articles of association do not provide differently, the transmission to shareholders outside the company is allowed only if it has been approved by the associates representing at least three quarters of the share capital, as provided by Romanian Companies Law no. 31/1990. By introducing the phrase “unless the articles of association provide otherwise”, it is possible for the shareholders to transfer these shares under other conditions established by the articles of association.
Therefore, the provisions of the articles of association need to be drafted in the clearest possible manner that accurately reflects the will of the parties. The Romanian law firm Pavel, Margarit and Associates recommends that the articles of association should be drafted or revised by a lawyer specialized in commercial and corporate law, mergers and acquisitions.
The assignment of shares must be registered at the Romanian Trade Registry and it will have effect on third parties from that moment. To this end, the agreement and all other necessary documents for the registration of mentions regarding the transmission of the shares shall be prepared by a specialized lawyer in corporate, commercial and merger and acquisitions.
A novelty in the legislative field is the new provisions brought by Romanian Companies Law no. 223/2020 for simplifying and eliminating bureaucracy regarding transfer of shares and payment of share capital by amending the Romanian Companies Law no. 31/1990.
Therefore, the registration in the Romanian Trade Registry of the transfer of ownership to shareholders outside the company will be done in a sole step, which is why the Law Firm Pavel, Margarit and Associates recommends addressing to a lawyer specialized in commercial, corporate, mergers and acquisitions with experience in these procedures may fulfill the required standards so that all the documents would be drafted in accordance with the shareholder will.
The law firm Pavel, and Associates also recommends addressing to a lawyer specialized in corporate, commercial law, merger and acquisitions from Romania, who will analyze the legal provisions, protect and guide the parties during the process, the final goal being to sell or buy a company in Romania in a legal and safe regime, also being time efficient.
Pavel, Margarit & Associates Romanian Law Firm is one of the top law firms in Romania, offering top legal advice. The Romanian law firm clients are foreign and top local companies and high worth individuals. In 2021, the success stories of the Romanian Law Firm have brought recognition from the most prestigious international guides and publications. The firm was ranked second place in Romania by the Legal 500 publication. The Romanian law firm is also recognized by IFLR 1000 Financial and Corporate Guide 2021. Pavel, Margarit & Associates Romanian Law Firm is also the only law firm in Romania recommended by the Global Law Experts Director in London in the Dispute Resolution area of Practice. All the relevant information regarding Pavel, Margarit & Associates Romanian Law Firm can be found on the website www.avocatpavel.ro.