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 from the contract.

Other necessary elements include the full name and identification details of the parties (for legal entities, these include the address of the registered office and the registration number) and the name of the person signing the contract (if representing a legal entity). In the event of partial or total non-performance, in addition to the penalties set by the parties in the contract, there is the possibility of claiming “damages” or compensation; our law firm in Romania can provide you with more information on this.

The following payment methods are accepted: payment order (bank transfer), cheque, bill of exchange (under certain conditions expressly mentioned by law), factoring. In the event of non-performance, the contracting parties have the possibility of instituting proceedings to recover the debt in question. The creditor will be able (after a final decision by a judge) to enforce the following assets: cash (including funds in bank accounts), debts, products, debts or other assets. This procedure is carried out by an executor (bailiff) after the judge’s decision has been issued.

Romanian contract law contains extensive legislative provisions. There are a large number of exceptional requirements (e.g. method of authentication, written form, compliance with the provisions relating to each type of contract, etc.) and important general provisions which directly influence business relations with Romanian partners.

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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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