Breaching requirements of company registration
The effects of breaching the requirements of company registration
I want to set up a company in Romania and I would like to know what sanctions are related to non-observance of the provisions in this field.
As you can find on the Founding Firms website, there are formalities and general provisions valid for all types of companies, as well as the particularities that you want to assign to the future company.
In case of non-observance of the provisions stipulated by the Framework Law in the matter, namely Law no. 31/1990 on societies, this law establishes specific sanctions and effects according to the disregarded provisions.
Thus, if the constitutive act of the future company does not include the information provided by the law, it will contain provisions that violate imperative legal norms or when a legal requirement regarding the constitution of the company has not been fulfilled, the delegated judge will be able to reject the application for registration. The judge will take this measure either ex officio or at the request of the person requesting the intervention. However, the judge will not reject the application for registration if the associates will remove the irregularities, which will be entered in the judge's conclusion.
Also, if the founders or the representatives of the company did not request its registration within a legal term even after they were delayed, the associates will become free from the obligations that arise from their subscriptions after a period of time 3 months from the date of the authentication of the constitutive act, unless the constitutive act contains contrary provisions. However, if an associate has made a request for the completion of the registration formalities, none of them will be able to claim the release from the obligations that have accrued from the subscription.
Other types of sanctions refer, for example, to the inability to third parties of certain acts in respect of which the advertising required by the law has not been achieved, the inopposability of the text published in the Official Gazette of Romania in the situation in which it is inconsistent with the filed at the Trade Register Office or inability to deal with certain irregularities regarding the appointment of the company's representatives after the formalities for advertising
It is useful to know that, in relation to third parties, within certain limits, society is bound by the acts adopted by its organs even in the situation in which they exceed the object of activity of the company.
Are these sanctions only in case of non-compliance with legal provisions at the moment of incorporation of the company?
No, the argument being that the Romanian Law no. 31/1990 on societies establishes formalities that must be fulfilled even after the registration of companies, so it is natural to introduce certain sanctions which may intervene in breach of these legal provisions after the registration of the company.
Thus, if certain irregularities are found after the registration of the company, the latter will be obliged to take the necessary measures for their removal within a maximum period of 8 days from the date of finding the irregularities. Moreover, if the company does not resort to the necessary measures within the mentioned timeframe, any interested person will be able to ask the court to oblige the company's organs to regularize them, subject to the payment of damages.
Who can be held liable for irregularities in the establishment and registration of a company in Romania?
As stated in the provisions of the framework law on companies in Romania, the founders, representatives and first members of the management, control and management bodies of the company shall be unlimited and jointly liable for the damage caused both by the irregularities in the process of incorporation and registration society, as well as by the irregularities found after its registration.
Nullity may be one of the sanctions applied to non-compliance with legal provisions on business start-ups?
Yes, as stipulated by Law no. 31/1990 on societies, the nullity of a company that was registered in the trade register may be declared by the court in the following situations:
▪ the constitutive act is missing or it has not been concluded in the authentic form in the assumptions provided by the provisions of Law no. 31/1990;
▪ missing the conclusion of the delegate judge on the registration of the company;
▪ all founders were incapacitated at the date of incorporation;
▪ the minimum number of associates required by law has not been respected.
▪ the constitutive act does not specify the name of the company, the object of activity, the contributions of the associates or the subscribed share capital;
▪ the object of activity of the company is unlawful or contrary to public order;
▪ lacking the legal administrative authorization to set up the company;
▪ the legal provisions regarding minimum subscribed and paid-up share capital have been breached;
However, the nullity may be covered if the ground which led to the filing of the application for annulment has been removed until the conclusion of the case on the merits. If the nullity is not covered, the company will cease without retroactive effect and will enter into the liquidation procedure at the date of the definitive ruling of the court decision that the company's nullity was found or declared null and void.
Lawyers at Darie, Manea & Associates have an impressive experience in the field of corporate law and can provide you with information on the process of incorporating and registering a company so that the result is the one you want. the list of lawyers specialized in the field of commercial law and contact us whenever you want legal assistance and legal representation before the competent authorities.