On July 2, 2020, Law no. 102/2020 for the amendment and supplementation of Companies Law no.31/1990 was promulgated, bringing a series of legislative simplifications regarding the activity of Romanian companies, and it entered into force starting on July 5, 2020.
If, up until now, according to Law 31/1990, the process of establishing the registered office of the companies was bureaucratized and winding, imposing certain prohibitions to the associates of limited liability companies, through the complete repeal of Article 14, the prohibitions that were laid on natural and legal persons to have the status of sole shareholder in several limited liability companies, are now removed. Thus, if previously a natural or legal person could not have the sole shareholder status in several limited liability companies as well as a limited liability company with a sole shareholder, could not have the sole shareholder status in another limited liability company, now it is possible for a natural or legal person to act as a sole shareholder in several limited liability companies.
Following the repeal of Article 14, Article 17 (1) is also amended, so that for the authentication of the Articles of the Incorporation or the assigning of a definite date thereof (as provided for in Article 5), only the proof issued by the Trade Registry Office regarding the availability and reservation of the company shall be submitted.
Moreover, Article 17 (3) is also amended in order to simplify the procedures and conditions for the registration of the company`s headquarters. Consequently, when registering the company and when changing the headquarters, it should be submitted, at the Trade Registry Office headquarters, the document certifying the right to use the office space registered with the tax authorities within the National Agency for Fiscal Administration in whose constituency the building designated to serve as headquarters is located. As such, the process of registering the headquarters of a company by repealing the requirement to submit a certificate attesting the fulfillment of the conditions for the registered office and the declaration on own responsibility regarding the observance of the conditions for the registered office, has been facilitated, now being enough to submit only the document certifying the right to use the office space at the time of the registration/change of the headquarters.
Law 102/2020 also repeals Article 17 (4), through which it is removed the interdiction for companies to operate in the same building, thus, in the same premises will be able to operate a number of companies higher that the number of existing rooms in the building. Until now, the Companies Law established that at the same headquarters it is possible to operate a number of companies equal to the number of rooms of the headquarters.
To Article 17 it was introduced a new paragraph, which stipulates that the notice regarding the change of the destination of the collective buildings with residential regime, provided by Law no. 196/2018 on the establishment, organisation and operation of owners` associations and the administration of condominiums, with subsequent amendments, is not necessary when the administrator or, as the case may be, the administrators issue a statement asserting that no operations are carried out at the headquarters.
These legislative changes are extremely beneficial to the Romanian business environment, thus stimulating the development of the economy. We believe that in the next period, we can expect an acceleration of company registrations in Romania given that the headquarters of a company can be registered with a lawyer or in any space with several companies and that the sole shareholder can own several companies in Romania. In addition to that, the law could have an impact on the fiscal field and the prevention of money laundering and could potentially boost Romania`s impetus in terms of aligning with the other EU member states”, added Radu Pavel, Managing Partner of Pavel, Margarit and Associates.
Pavel Margarit & Associates is a Romanian law firm with over 15 years of experience in cross-border financing transactions and complex commercial contracts, mergers, acquisitions and joint venture agreements. Over the time, our specialized lawyers in mergers and acquisitions and international financing, have represented investors, investment funds, listed companies, banks and multinational companies, in carrying out their operations in Romania. Our team is ready to take over mandates regarding company law, from incorporation, dissolution, mergers, acquisitions, assignments of shares, to complex issues and to assist with clarifications regarding the legal issues discussed above.