As our world is more and more interconnected, people wish to have a vast amount of flexibility when establishing a company in Romania in order for both their business and national economy to flourish. Therefore, the European Union paved the way towards stability by harmonizing the steps that need to be taken in order to create a company in Romania, such as systematized formation or disclosure requirements in Romania. Incorporating a company in Romania is a process that needs to meet certain legal requirements. Pavel, Margarit and Associates Romanian Law Firm recommends contacting a specialized lawyer in corporate, commercial and M&A in Romania who can advise you in drafting or reviewing the necessary documents when setting up your own company in Romania, in accordance with European legislation.
What legislation is relevant for this matter?
Directive (EU) 2017/1132 brings together a large part of European Union (EU) company law rules in one single directive, codifying six previous company law directives. Because it codifies existing legislation, no additional transposition by Romania into national law is necessary. The aforementioned directive covers issues such as company formation, capital and disclosure requirements in Romania, and operations (such as mergers and divisions) of companies. Its main aim is to provide harmonization so that there is a high level of legal certainty in regards to any general aspects when one wants to open up its own company.
Formation requirements of a company in Romania
When a person wishes to create a new company in Romania or in an EU country, there are certain conditions that need to be met. Two articles are relevant in this regard from Directive 2017/1132, namely Article 3 and 4. Article 3 talks about the minimum amount of information that needs to be found in the Articles of Association (constitution) of a company in Romania, such as the type of the company, its objects, the amount of its authorized/subscribed capital, and so on. Moreover, Article 4 discusses about the information which needs to be found either in the Articles of Association or in a separate document, namely the registered office, the nominal value of the subscribed shares, the number of the subscribed shares, etc.
Disclosure requirements in Romania
According to Art. 14 of Directive 2017/1132, Romania shall take the measures required to ensure compulsory disclosure by companies of at least the following documents and particulars: articles of association or any amendments made to these documents, the companys directors and supervisors, its annual accounts, winding-up and liquidation of the company and nullity of the company. These disclosure requirements in Romania have been discussed also in the Daihatsu case of the Court of Justice of the EU (CJEU). In that judgement, it was decided that the disclosure of documents should not be restricted only to the members of the company. From this, it results that not only the inner circle should have an insight about the company, but every party that is interested in the disclosed information.
A lawyer specialized in corporate, commercial and M&A in Romania can advise a Romanian company to comply with Directive 2017/1132 in Romania. It is mandatory for companies in Romania to ensure compliance with the formation, disclosure and registration requirements in Romania.
Registration of a company in Romania
In Romania, a specific file needs to be opened for each company in the register where all the documents mentioned and discussed above can be found, in order to facilitate the identification of the company in Romania, and implicitly its registration in Romania. According to Art. 16 of the Directive, Romania shall ensure that companies have a unique identifier allowing them to be unequivocally identified in communications between registers through the system of interconnection of central, commercial and companies registers in Romania established in accordance with Article 22(2) (˜the system of interconnection of registers).
What are the specific requirements for incorporating a public/private limited liability company in Romania?
Starting with the public limited liability companies, there is a specific minimum capital requirement found in Art. 45 of Directive 2017/1132 of 25.000 euros which is the same as in Romania. However, for a private limited liability company, this requirement is left to each Member State to decide upon, Romania having no minimal value required, as the previous condition for a minimum capital of 200 RON was abolished by Law no. 223/2020.
To conclude, while the EU has regulated some important aspects in regards to harmonizing relevant requirements when incorporating a company in Romania, such as its formation, registration or the disclosure of specific documents, in the same time, it has given space for each national legislation, like Romania, to define particular conditions. Pavel, Margarit and Associates Romanian Law Firm recommends contacting a specialized lawyer in corporate, commercial and M&A in Romania who can advise you along the process of setting up your own company in Bucharest, Romania, in accordance with European legislation.
Directive (EU) 2017/1132 is the relevant legislation for company formation in Romania. It consolidates and codifies existing European Union (EU) company law rules, eliminating the need for additional transposition into national law. The directive covers various aspects of company formation, capital requirements, disclosure requirements, and company operations such as mergers and divisions. Its aim is to provide harmonization and legal certainty when establishing a company, in line with European legislation.
For public limited liability companies in Romania, the minimum capital requirement is set at 25,000 euros, as stated in Article 45 of Directive 2017/1132. On the other hand, for private limited liability companies, Romania has no minimum capital requirement after the abolition of the previous condition for a minimum capital of 200 RON (Romanian New Leu) by Law no. 223/2020. The decision on the minimum capital requirement for private limited liability companies is left to the discretion of each Member State.
Under Directive 2017/1132, the formation requirements for a company in Romania include specific information to be included in the Articles of Association, such as the company’s type, objects, authorized/subscribed capital, and more (as specified in Article 3). Additionally, there are disclosure requirements outlined in Article 14, which oblige companies to disclose documents and particulars such as articles of association, information about directors and supervisors, annual accounts, company liquidation, and nullity. These disclosure requirements aim to ensure transparency and are not limited to members of the company but also extend to any party interested in the disclosed information.