What do companies do with investments after listing on the stock exchange?

What should investors know about how companies spend the money from the stock exchange?

Listing on the Bucharest Stock Exchange represents a significant step for any company that aims to raise capital, expand, and strengthen its market position. However, once funds from investors are accessed, companies listed on Bucharest Stock Exchange are obligated to use these resources transparently and efficiently, in line with the information presented in the listing prospectus and in compliance with the Companies Law and capital market regulations. The Romanian Law Firm Pavel, Mărgărit and Associates provides top legal services in the M&A practice area, assisting clients in due diligence in Romania and capital market transactions, whether it concerns the transfer of shares in Romania, business share purchase agreement in Romania, contract reviewing in Romania, business transfers in Romania or other mergers and acquisitions in Romania (M&A in Romania). We support both investors and listed companies in managing legal and financial risks associated with capital market transactions.

Corporate lawyer in Romania. What do directors of listed companies on the stock exchange need to know about the use of investments raised through listing?

Directors must use the funds obtained from listing (transfer of shares in Romania and assets in Romania) strictly for the purposes presented to investors in the public offering prospectus. Altering the destination of the raised investments can have legal consequences, especially if there has been no prior notification and approval from shareholders. Listed companies on the Bucharest Stock Exchange are required to publish periodic financial reports and information regarding the use of the raised funds, in accordance with the requirements of the Financial Supervisory Authority (ASF) and the Bucharest Stock Exchange. Administrators must act with due diligence in Romania, in the interest of the company and all shareholders. Unjustified expenditures, risky investments or lack of proper documentation for decisions can lead to the directors’ liability. The Romanian Law Firm Pavel, Mărgărit and Associates offers specialized legal services to assist directors and listed companies on the Bucharest Stock Exchange in ensuring compliance with legal obligations regarding the use of investments raised from listing and dividends for shareholders in Romania. Our team of business lawyer in Romania, corporate lawyer in Romania and company lawyer in Romania provides legal advice on drafting and contract reviewing in Romania, managing shareholder relations, ensuring compliance with the fund usage objectives stated in the prospectus, conducting due diligence in Romania and assisting in business share purchase agreement in Romania, transfer of shares in Romania and assets in Romania and other capital market operations for a joint stock company in Romania.

Company lawyer in Romania. Due Diligence in Romania

When purchasing or selling shares, any investor must carefully assess all legal implications of the transaction. A merger or acquisition in Romania (M&A in Romania) transaction is not limited to the transfer of transfer of shares in Romania and assets in Romania but also involves a thorough evaluation of potential risks and the preparation of a due diligence in Romania report. In this context, the support of an M&A lawyer is essential to ensure compliance with the provisions of the Companies Law and the applicable legal framework. The due diligence report should include an analysis of existing shareholders, examination of the company’s tax situation, and analysis of all commercial contracts. An experienced company lawyer will check for any ongoing litigation, analyze potential risks, and assist the client throughout the entire procedure. The Romanian Law Firm Pavel, Mărgărit and Associates offers top legal services for M&A transactions, capital market transactions and due diligence in Romania.

Business lawyer in Romania. What should investors know about how companies spend the money from the stock exchange?

The prospectus is the essential document that a company must prepare when listing on the Bucharest Stock Exchange and it is the primary source of information for investors regarding the company’s activities, financial situation, investment risks and how the funds raised from listing will be used in order to receive dividends for shareholders in Romania. The prospectus includes detailed information about the company, its shareholder structure, management team, relevant financial data, objectives of the public offering (how the raised funds will be used, for example, for investments, expansion or acquisitions), as well as legal, financial and market risks. The prospectus aims to protect investors and ensure the transparency of the listing process, serving as an essential legal tool in capital market transactions and for companies seeking to attract investments in Romania.

“The experience of our team of corporate lawyers in Romania in mergers and acquisitions in Romania, M&A in Romania, contract reviewing in Romania, business transfers in Romania, share purchase agreement in Romania, transfer of shares in Romania represents a competitive advantage for any investor or company involved in capital market transactions,” said Dr. Radu Pavel, Managing Partner of The Romanian Law Firm Pavel, Mărgărit and Associates.

Transparency and legal compliance are essential for protecting investors’ interests and ensuring the long-term success of a company listed on the Bucharest Stock Exchange. Once these funds are accessed, listed companies must use the raised resources in accordance with the objectives presented to investors in the public offering prospectus, respecting the regulations imposed by the Companies Law and the regulatory authorities such as the Financial Supervisory Authority (ASF) and the Bucharest Stock Exchange. In this context, The Romanian Law Firm Pavel, Mărgărit and Associates provides top legal advice for listed companies, supporting directors and investors in the due diligence process, investments in Romania, M&A transactions and ensuring that all operations comply with the current legislation. Our corporate lawyers in Romania, business lawyers in Romania and company lawyers in Romania provide full services for Bucharest Stock Exchange listed companies, from analyzing shareholder structures to verifying tax and contractual obligations, to preparing the necessary documentation.

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 2024, 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 2024 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.