Mergers and Acquisitions in Romania. Legal protection and risk control in business sales and purchases

The role of a specialized lawyer and legal assistance in sale and purchase agreement in Romania

Selling a business or buying a business in Romania is a complex process involving strategic, financial, and legal stages, from preparing the business to the final transfer of participation interests or assets. The process typically takes several months and requires specialized input, particularly where the parties intend to sell a business or are planning buying a business as a growth strategy. The sale and purchase of companies are grounded in the general rules of the Romanian Civil Code on negotiations, formation, and performance of agreements, as well as the specific rules of Romanian Company Law No. 31/1990 on changes in ownership and corporate governance. Risk control is achieved by aligning the stages and documentation so that the findings of due diligence are properly reflected in the pre-contractual instruments, including where there are risks such as unfair terms or commercial disputes affecting commercial contracts and key sale agreements. This article analyzes the stages of a company sale, key aspects of legal verification, the share transfer agreement, and the finalization of the transaction.

In this context, the Romanian law firm Pavel, Mărgărit & Associates provides specialized legal services in business law, through a dedicated practice focused on transactions and corporate restructuring. The team supports entrepreneurs who intend to sell a business, investors who are buying a business, and parties assessing whether to structure the deal as a transfer of shares or an asset transaction, including situations akin to purchase a llc in cross-border terminology. The firm’s transactional practice is designed to secure the documentation and procedure from the earliest steps, ensuring that key contractual clauses and commercial contracts are identified, negotiated, and implemented properly in the relevant sale contract and related SPA (sale and purchase agreement).

Company lawyer in Romania. Stages of selling a company. Pre-contract documents – confidentiality agreement, letter of intent, and key terms

In a transaction, the order of steps is essential so that risk is controlled and the transfer is enforceable and produces legal effects. A company sale is typically structured either as a transfer of participation interests, through shares and a transfer of shares, or as a business transfer through an asset transfer, depending on what the parties are aiming to achieve when selling a business or buying a business. The process usually starts with internal preparation and valuation, where corporate documents are reviewed, the perimeter of the transaction is defined, and the parties decide whether the deal will proceed via a share transfer agreement or via SPA (sale and purchase agreement) covering selected assets. In this phase, the seller identifies what is being transferred and what remains with the seller, and the buyer clarifies what it needs in order to purchase a llc-type vehicle or acquire a local company in substance. Insufficient preparation often leads to late renegotiations, delays at signing, or subsequent disputes, because discrepancies between the company’s legal reality and the initial presentation typically become visible only in the final stages.

Negotiations should prudently take place only after a confidentiality agreement is signed, to protect sensitive information about the company, its commercial contracts, its customer-facing sale agreements, key counterparties, and financial conditions. If confidentiality and permitted-use provisions are not clearly framed, the real risk is that the information may be used outside the contemplated transaction, including in negotiations with third parties or for competitive positioning. Properly drafted confidentiality terms also set expectations for how contractual clauses and deal-sensitive documents will be shared and controlled.

The letter of intent and key terms document fix the structure and timeline of the transaction, including that execution of final documents is conditional on a satisfactory outcome of due diligence, as well as the pricing principles that will later be reflected in the sale contract and the final share transfer agreement. At the same stage, the parties should clarify how existing relationships will continue, because some commercial contracts may contain change-of-control provisions or even problematic contractual clauses, and ignoring these can delay or block implementation even after the price is agreed.

After the key terms are clarified, the transaction moves into the corporate decision and formalization stage, by adopting the shareholders’ resolution or the sole shareholder’s decision, a corporate act that approves the transfer and sets the essential parameters of the change in ownership. This step is central to a compliant transfer of shares, particularly where the parties intend to sell a business by transferring equity rather than assets, and it anchors the legal pathway toward an enforceable share transfer agreement.

Next, the share transfer agreement is drafted and signed, by which the transfer is carried out between the parties, and then the full file is prepared and submitted to the National Trade Register Office to register the changes and update the company’s records. The shareholders’ resolution is published and creditors benefit from the statutory 30-day period to file an opposition. If oppositions are filed, they are heard by the court, and until a final court decision is issued, the registration procedure at the Trade Register is suspended.

Finalization occurs after these formalities are completed and the registration decision is issued, from which point the new owners can effectively exercise their rights, followed by post-implementation steps such as updating internal documents and, where appropriate, notifying key counterparties under commercial contracts and existing sale agreements. This sequence ensures the transfer of shares is opposable to third parties and that the practical business transfer is implemented without disrupting core operations.

For the final stage of this section, parties typically rely on legal assistance and tailored lawyer advice to protect confidential information, negotiate the pre-contract framework, and coordinate the formal steps so that the share transfer agreement and the sale contract, SPA (sale and purchase agreement) remain enforceable. A corporate lawyer, contract lawyer, commercial lawyer, and company lawyer can provide structured support throughout, and many clients seeking best lawyers, Romanian lawyers, or Bucharest lawyers prioritize coordinated transactional handling over fragmented input.

Contract lawyer in Romania. Legal verification (due diligence) before the transaction. Review of the company from the perspective of contracts, disputes, and assumed obligations

Legal verification determines whether the transaction is safe in the proposed form and how risk should be allocated between the parties. In the case of a transfer of shares in a company, the due diligence review checks the articles of association, shareholder resolutions, any restrictions on transfer, and the status of the participation interests to be transferred under the share transfer agreement, so that selling a business is not undermined by corporate impediments or missing approvals.

Contract review is often decisive, because commercial contracts may contain automatic termination provisions, penalties, warranties, or change-of-control provisions requiring notices, counterparty consents, or renegotiation, and identifying these risks early enables either a price adjustment or the inclusion of conditions precedent. In the same vein, due diligence covers litigation, enforcement measures, security interests, receivables, and liabilities, so the buyer understands the exposure and can decide whether a business transfer through an asset structure is preferable or whether a full equity deal is acceptable under the contemplated sale contract and the relevant sale agreements. Where problematic contractual clauses are found, the transaction documentation should be tailored to contain the consequences and allocate responsibility clearly.

In share sale and purchase transactions, the logic is similar, because the buyer takes the company with its historical footprint, and the identified risks must be reflected in warranties and indemnities. Special attention is paid to the risk of unfair or unbalanced contractual clauses, whether in relation to counterparties or in legal relationships that may generate disputes, because such clauses can lead to material costs after the transaction is completed. Ultimately, the conclusions of due diligence must be converted into concrete obligations, such as remediation before completion, price adjustments, warranties, and liability caps.

In share transactions, the principle remains the same: the buyer acquires the entity with its history, so the identified risks must be covered through warranties and indemnity mechanisms embedded in the sale contract and aligned sale and purchase agreement. The review focuses in particular on whether there are unfair contractual clauses or contractual imbalances in key commercial contracts, because these can trigger disputes and significant costs after completion. In the end, the results of due diligence must be translated into practical measures, such as remediation before completion, price adjustments, warranties, and limitations of liability, and where the risks cannot be sufficiently controlled, the transaction may be restructured from an equity sale into a business transfer via assets to protect the buyer’s position when buying a business.

For the closing paragraph of this section, comprehensive legal assistance and structured lawyer advice help ensure that the scope of due diligence is clearly defined and that its conclusions are properly incorporated into the share transfer agreement and the supporting sale contract and sale agreements. A corporate lawyer, contract lawyer, commercial lawyer, and company lawyer can coordinate the verification process and the required corporate documentation, and clients searching for best lawyers, Romanian lawyers, or Bucharest lawyers often prioritize an integrated approach that anticipates disputes rather than reacting after completion.

Contract lawyer in Romania. The company share transfer agreement – Price, payment mechanisms, warranties, and indemnities

The central document in transactions involving a transfer of participation interests is the share transfer agreement. The price may be set as a fixed amount or through adjustment mechanisms, for example based on working capital, debt, or financial indicators, which become essential when due diligence identifies risks in liabilities or in the underlying contractual framework. In practice, the pricing formula must be drafted precisely to avoid divergent interpretations after signing, particularly when elements may change the economic value of the company between signing and completion, including the stability of core commercial contracts and key customer-facing sale agreements.

Payment mechanisms must be aligned with warranties and indemnities, because full payment at signing can expose the buyer if material risks later surface, while staged payments or retention mechanisms can protect both parties through a balanced allocation of risk. In this context, identified risks, including those linked to unfair contractual clauses or onerous obligations, should be covered through representations and warranties, liability limits, materiality thresholds, warranty periods, and clear notice and claims procedures.

In transactions involving the sale and purchase of shares, the principle is that the company is acquired with its historical footprint and the risks must be allocated contractually through warranties and indemnities, even if corporate instruments and formalities differ depending on the company type and internal rules. In a business transfer through assets, warranties adapt to the transferred perimeter and to the allocation of assets and liabilities, and it is essential to describe clearly what is transferred, what remains with the seller, and what conditions are required to maintain operational continuity, including in relation to key commercial contracts and essential sale agreements.

For the final paragraph of this section, legal assistance and clear lawyer advice are typically required to draft and negotiate the share transfer agreement, align it with the SPA (sale and purchase agreement), and integrate the findings of due diligence into warranties, indemnities, and liability caps. A corporate lawyer, contract lawyer, commercial lawyer, and company lawyer can ensure the transaction documents are consistent and registrable, and clients looking for best lawyers, Romanian lawyers, or Bucharest lawyers often focus on the ability to prevent disputes by negotiating enforceable contractual clauses and effective remedies.

Commercial lawyer in Romania. Finalizing the transaction and subsequent steps. Conditions, approvals, formalities, and implementation

Finalizing a transaction does not mean only signing documents, but fulfilling the agreed conditions and completing the formalities that make the transfer effective and opposable. In the case of a transfer of shares in a limited liability company, implementation typically includes adopting the corporate resolutions required by Romanian Company Law, updating the constitutional documents, and registering the changes with the Trade Register, so that the share transfer agreement produces the intended effects against third parties. These formalities must align with the overall documentation set, including the sale contract to ensure enforceability.

In share sale and purchase transactions, finalization may include entries in relevant registers, corporate updates, and the fulfilment of any approval conditions, while in a business transfer structured as an asset transfer, implementation involves handover documentation, inventory, counterparty notices, and alignment of commercial contracts and customer sale agreements with the new operating structure. The practical impact of contractual clauses in key agreements must be addressed so that business continuity is preserved after completion and the business transfer does not disrupt operations.

Risk control remains critical at finalization, because due diligence may lead to conditions precedent requiring remediation, and if certain assets and liabilities cannot be clearly separated, the transaction must be adjusted to avoid the assumption of unwanted obligations or the consequences of unfair contractual clauses left unresolved. The subsequent steps typically include operational integration, updates to mandates and internal documentation, and monitoring of warranties, so that selling a business result in a functional takeover rather than a dispute file, and buying a business delivers the expected control and value.

“Rigorous implementation of verifications and completion conditions must be handled carefully in order to avoid assuming hidden obligations and to maintain control over the inherent risks in company transactions, whether the deal involves a share transfer agreement, a transfer of shares, or an asset-based transfer.” stated Dr. Radu Pavel, Managing Partener of the Romanian law firm Pavel, Mărgărit & Associates.

In conclusion, company transactions in Romania require a phased approach in which risk control starts with due diligence, continues through pre-contract documents, and ends with contracts and formalities that make the transfer effective, whether the transaction involves a transfer of shares, sale and purchase of shares, or a business transfer through assets. Proper management of commercial contracts, of sale agreements, and of risks generated by unfair contractual clauses significantly reduces the likelihood of disputes and protects both seller and buyer in the medium and long term. In this context, the Romanian law firm Pavel, Mărgărit & Associates recommends relying on specialized support in business law so that operations remain compliant with applicable legislation, legal risks are prevented early, and strategic decisions are built on solid, business-oriented legal input, including effective dispute management when conflicts arise.

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.