If a shareholder fails to fulfill its obligations or does something contrary to the interests of the Romanian company, the existence and the activity of the company itself is threatened. According to Romanian Company Law no. 31/1990, the undesirable shareholders may be excluded from the company. In order to fulfill this, a court decision is required, so it is recommended to hire a lawyer specialized in commercial litigation, say lawyers from Pavel, Margarit & Associates Romanian Law Firm.

Over the years, the Romanian law firm represented companies which wanted to exclude undesirable shareholders and also represented shareholders that claimed they were unjustly excluded from company. This type of procedure is more and more common among companies, especially as their number is growing. Thus, in the first four months of 2019, 28,850 limited liability companies were established in Romania. The total number of joint-stock companies, family businesses, LLCs and self-employed authorized person registered at the Romanian National Trade Register Office in the first four months of 2019 was 48,800, up 17% over the same period in 2018, said Radu Pavel, Managing Partner of Pavel, Margarit & Associates Romanian Law Firm.

Art. 222 of Romanian Company Law 31/1990 provide four situations when the shareholders may be excluded from the company.

The shareholder who delayed to make the financial contribution to which he has committed – is that shareholder who does not deliver on time the contribution he has committed to through the shareholders decision. The exclusion of the shareholder does not mean that he does not bear the consequences of his actions, so he/she will also pay the damages.

Shareholder with unlimited liability that are in bankruptcy or shareholder who have become legally incapacitated. The law provides two distinct situations that justify their exclusion: the bankruptcy situation and the establishment of the legal incapacity of the shareholders (when they are forbidden to occupy this position or to take part in certain contracts).

The unlimited liability shareholder who does something that contravenes the provisions of art. 80 and 82 these are the unlimited liability shareholders who have breached their statutory obligations. The measure is applicable to shareholders (especially to those who are partners) who, although they are not members of the staff, interfere with the management decisions. The shareholder who is guilty of such interference also makes him responsible toward third parties. At the same time, the shareholders that use the social capital for their benefit or for anothers persons benefit, without the consent of the shareholders, or the shareholders that exercise unfair competition acts, may be excluded.

The Administrator who commits fraud at the expense of company or uses the social capital for his or her benefit is the fourth statutory situation justifying exclusion.

According to the law, the situations presented are just some examples. Serious misconduct between shareholders, which impedes the functioning of company, is a necessary and sufficient basis for the exclusion of disruptive shareholders if the solution unblocks company’s activities without compromising its patrimony.

Exclusion is pronounced by court order at the request of the company or any shareholder. When an shareholder makes the request, both the company and the defendant will be quoted. The court will also decide on the structure of the share capital after the exclusion. The decision shall be filed with the Trade Register Office. The shareholder is liable for losses and is entitled to the benefits until the day of his exclusion. He cannot benefit from a proportional share of the social patrimony, but only from its value.

In order to exclude an undesirable shareholder from company you need to have in-depth knowledge of the law, so that the interest of company is best protected. As the procedure unfolds, there may be events or bottlenecks that only a commercial lawyer can handle properly, and in the absence of specialist advice the damage to company may be significant, prevent lawyers specialized in commercial law from Pavel, Margarit & Associates Romanian Law Firm.


               Pavel, Margarit & Associates Romanian Law Firm is one of the top law firms in Romania, which offers legal services at the highest quality, beyond clients expectations. The Law Firm approaches the cases with maximum professionalism and dedication. Its ultimate goal is obtaining exceptional results and achieving the clients objectives, in a time efficient manner. Among Pavel, Margarit & Associates clients are top multinationals and local companies. In 2019, the success stories of the Romanian Law Firm have brought recognition of the most prestigious international guides and publications. Thus, Pavel, Margarit & Associates Romanian Law Firm ranked second place in Romania in the rankings of business law firms with the most relevant expertise this year, realised by the Legal 500 publication, the most prestigious guide for law firms in the world, based in London, UK. The law firm is also recognized internationally by IFLR 1000 Financial and Corporate Guide 2019. 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 including areas of practice and the most important deals can be found on the website www.avocatpavel.com, which is one of the most complex law firm websites in Romania.