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Starting and developing businesses in Romania – Part I

An important chapter for starting and developing businesses in Romania is that of understanding the structure and functioning of companies in Romania, at least at a reference level that allows the best strategic decisions to be taken. The first analysis will be dedicated to the most complex business structure, which is mandatory to develop certain

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What is cross-border division?

Generally speaking, a cross-border division is a division operation in which at least two of the companies involved are governed by the laws of two different Member States. The cross-border division may involve joint stock companies, limited partnerships, limited liability companies, Romanian legal entities and European companies with their registered office in Romania. Specifically, cross-border

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What are the types of contracts in Romania?

What types of contracts are available for the construction sector in Romania? Investors who are involved in the construction sector in Romania should be aware that there is no specific type of contract for this sector. However, when it comes to large construction projects, such as infrastructure projects, the companies involved have to draw up

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What are the regulations on employment contracts in Romania?

A special category of contracts that can be signed in Romania concerns employment contracts. These types of contracts are regulated by the Employment Law (Labor Code). According to Romanian employment law, the employment contract must be signed in writing and must contain specific elements. Business people wishing to open a company in Romania must comply

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What are the elements of a Romanian contract?

According to Romanian law, a contract must contain certain elements: the obligations of the parties for the performance of the contract, the conditions of delivery and quality of the goods and/or services, time limits, payment terms and payment guarantees, instruments of payment and price insurance, contractual risk, and the method of settling any disputes arising

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Can foreigners acquire agricultural land in Romania?

Agricultural land located in the countryside can be alienated to and by natural and legal persons, only under the conditions of Law 17/2014 as amended, as well as other applicable regulations. Both Romanian citizens and citizens of a European Union Member State, of the States party to the Agreement on the European Economic Area (EEA)

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What is a non-banking financial institution (NFI)?

An NFI is an entity set up as a commercial company limited by shares, but which can only operate under special organizational conditions. Branches of non-banking financial institutions from abroad may also be authorised and operate in Romania, also subject to compliance with special legal requirements compared to other branches that do not fall within

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Financial companies in Romania – establishment and operation

What are Financial companies (credit institutions)? Credit institutions are entities that carry out activities of attracting deposits or other repayable funds from the public, as well as lending operations on their own account. Credit institutions also include entities that issue electronic means of payment. Credit institutions operating in Romania are Romanian legal entities belonging to

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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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