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​Establishment of SNC

One of the types of companies that can be set up by both natural and legal persons is the company in collective name (SNC). Setting up a company in this form will bring benefits to all participants, but the obligations of SNC associates must be taken into consideration.

If you want to set up a CNS and you need help, our lawyers are at your disposal with complete services of setting up the company in several cities of the country.
You can also use our LaRegistru platform to start the procedure for setting up a company, so you can better understand the steps you need to follow.

The legal character of the CNS

The Company in Collective Name - SNC - is the form of a commercial company constituted by the association, based on full trust, of two or more persons, who share certain goods, in order to carry out a commercial activity, in order to share the resulting profit and in which the partners answer unlimitedly and jointly for the obligations of the company.

Note!: Associations can be both natural and legal persons. In the case of natural persons, the Company in the Collective Name can be described as a family company, constituted between the members of the same family or within a certain profession (when the associations have the same professional purpose). In the case of legal persons, SNC has a distinct legal personality from the associated companies, and its share capital is formed with the participation of capital from all the associated companies.

Although it is a common type of society, considering that the family-type businesses have become more and more profitable in Romania, some characteristics of the society in collective name must be considered. From a legal point of view, the SNC:
- it is based on the trust of the associates, or better said, this type of society considers the person of the associates;
- like the SRL, the SNC will need a share capital divided in stakes and which must be paid into the company account at registration;
- regarding the share capital of the SNC, it cannot be made up of titles or certificates;
- the company in collective name cannot have a single associate, and the associates cannot be traders, according to Law 31/1990;
- there is no minimum ceiling for the share capital of the SNC, but it must be passed in the company contract.
 
The SNC is usually used for setting up small companies, and our lawyers can help you with its registration process.
You can rely on us for more services related to setting up a company, including writing the necessary documents for registration, completing and submitting the registration file at the Trade Register.

Requirements for setting up a CNS

Among the most important issues to consider when setting up a company, including a CNS, are:
1. the fact that the company can have no less than 2 associates and no more than 20, regardless of their type;
2. a natural or legal person may be associated in a single company in a collective name;
3. The name of the CNS must contain the name of at least one of the associates next to the name 'company in collective name';
4. the contract establishing the company, must contain information related to the contribution of each associate;
5. the associations must establish the amount of money needed to start the business and must mention the date on which the capital will be paid out;
6. The establishment of a CNS involves 3 stages: its establishment, functioning and dissolution or reorganization.
 
If you need additional information regarding the legal requirements for the registration of a company in a collective name, our lawyers can help you. We offer you complete registration services for companies in several cities of the country, among which Bucharest, Cluj-Napoca, Oradea and Iasi.

The company contract

According to the Law no. 31 of 1990, the Company in the Collective Name is registered by a company contract. It must be in authentic form and will contain:
● clauses regarding associates;
● clauses regarding the attributes of identification of the company in which the clauses regarding the structural elements of the newly founded company are constituted;
● clauses regarding the functioning of the company.
 
The social capital does not have a minimum ceiling established by law, the associates having the freedom to determine its value according to their own interests.
The contribution of the associates of a Company in a Collective Name can be in cash, in kind or in receivables (according to art. 16 of Law no. 31 of 1990).

Here is what the constitutive act of a Company in the Collective Name must contain:
 
● the identification data of the associates (Identity Card or Passport);
● form, name and registered office;
● the object of activity of the company, specifying the domain and the main activity;
● the share capital, mentioning the contribution to each associate;
● the associations that represent and manage the company or the non-associated directors, their identification data, the powers that have been conferred on them and whether they are going to exercise them together or separately;
● the share of each associated with profits and losses;
● the secondary offices - branches, agencies, representatives or other such units without legal personality - when it is set up with the company, or the conditions for their subsequent establishment, if such establishment is envisaged;
● the duration of the company;
● how to dissolve and liquidate the company.
 
The process of setting up a CNS will be closely supervised by our team. We will deal with the drafting of all the documents and obtaining the documents necessary to prepare the file for the registration of your company at the Trade Register, including the reservation of name.

Registration procedure of a CNS

The establishment of a CNS involves the same steps for the registration of other types of companies, such as SRL or SA. Once the company contract is drafted, it must be filed with the Trade Registry together with other documents.

The CNS registration file must contain:
 
- the request for setting up the company (form issued by the Trade Register) in original;
- Annex 1 for the fiscal registration, in original;
- the declaration on its own responsibility signed by the associates or administrators from which the validity of the operating conditions of the company can be seen;
- proof of registration and / or the right to use the company name in original;
- the original company contract;
- proof of the registered office in original;
- the evidence of the company's share capital;
- the documents of identity of the associates natural persons or of registration of the associates legal entities;
- special opinions regarding the activity / activities to be undertaken by the SNC;
- other documents, according to the requirements of the Trade Register.

If one or more associates are legal entities, the list of documents is larger.
A peculiarity of the company as a collective name is that the associates must decide together on all the problems arising in the company without needing, however, an annual general meeting.
The company in a collective name is quite attractive for those who want to set up small and medium-sized enterprises (SMEs) to carry out several types of commercial activities.

According to statistics, in 2018:
 
• the number of companies established in Romania increased by more than 80% compared to the previous year;
• the number of new companies registered in 2018 was 9,878 throughout the country;
• the largest increase was registered by the agriculture industry, but forestry and fish farming, together accounting for an increase of 285.63%;
• companies operating in the financial, sanitation and waste management fields also registered increases of 121.67%, respectively 104%.
 
If you would like to set up a CNS and want specialized help, please contact us.

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