Business dissolution

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Dissolving a Romanian Company

A Romanian company can be dissolved through the following methods:

  1. Exceeding the limited timeframe for which the company had been initially incorporated for;
  2. The impossibility of fulfilling the company’s object of activity;
  3. Declaring annulment of the company;
  4. Decision of the General Shareholder Assembly;
  5. Decision of Tribunals, on the request of each associate for well-founded reasons as well as conflicts between associates resulting in cease of company’s activity;
  6. Company’s bankruptcy;g) Other reasons stipulated by Law or the Articles of Association.
  7. Dissolving the company will result in the start of the liquidation procedure, however dissolving can take place without liquidation in certain limited cases. The operation must be registered with the Trade Register and published in Romania’s Official Monitor.
  8. The Trade Registry procedure is formed of 3 steps:
  9. Filing a number of requested documents (Shareholder Decision, official request) and payment of taxes;
  10. Filing a 2nd set of documents (documents from appointed liquidators) and payment of taxes;
  11. Filing a 3rd set of documents (Request to dissolve, financial situation for liquidation, Certificate of Registration, Fiscal Certificate etc.).

In certain cases, the shareholders of SRL companies are able to decide – at the time of dissolving the company – upon the liquidation method of the company, when agreeing upon the assignment and liquidation of the company’s patrimony and when insuring payment of debt to potential creditors. On the date the Judge’s decision is taken to dissolve the company, the entity enters liquidation, per the provisions of the Law and a liquidator has to be either hired by the company or appointed by the Judge.

Any remaining assets of the dissolved company shall be assigned to the shareholders.

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The main management structure of the company in Romania is the general meeting of associates / shareholders. The constitutive act establishes the rules for convening and adopting decisions and whether the exercise of the vote can be delegated by special mandate by the associate / shareholder who cannot take part in the meeting. In the limited liability company, each shareholder entitles the holder to one vote in the respective meeting. The general meeting of associates has the following main obligations: ✓ to approve the annual financial statement and to establish the distribution of the net profit. ✓ to appoint the administrators and the censors, to revoke / dismiss them and to discharge them, as well as to decide to contract the financial audit, when it is not obligatory, according to the law; ✓ to decide the pursuit of the administrators and censors for the damages caused to the company, designating also the person in charge to exercise it; ✓ to modify the constitutive act.
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The limited liability company is the most common form of company in Romania, being the legal entity that best serves the interests of investors both from the point of view of the reliability of the activity, and from the perspective of its management. The limited liability company is abbreviated "SRL" in Romania and is the equivalent of the American limited liability company Limited Liability Company (abbreviated to LLC) or the German economic structure "Gesellschaft mit beschränkter Haftung" (abbreviated to GmbH), or the structure called "limited" , the structure used in most Latin American states.
The limited liability company is characterized by:
✓ the character intuitu personae, which means that this economic structure is based on the trust between the associates;
✓ the division of the share capital into fractions called shares, which cannot be negotiable securities;
✓ the liability of the associates is limited to their contribution to the share capital.
The limited liability company may also have a single partner, natural or legal person, of Romanian or foreign nationality, who will be the owner of all shares. Instead, the maximum number of associates is 50 people.
At present, the Romanian law no longer conditions the subscription and payment of a certain amount as share capital.
Through registration, the company acquires legal personality, becoming, under the law, a collective subject of law. The conclusion given by the judge is sent, ex officio, to the Official Gazette of Romania for publication at the expense of the company and to the Financial Administration in whose territorial area is the main headquarters of the company for fiscal registration, mentioning the registration number in the Trade Register .

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