A company according to the Romanian law, both Romanian or foreign investors (and ventures) are equally treated, benefiting from the same opportunities for setting up business operations in Romania by founding separate legal bodies.
These entities operate as independent bodies and are distinct from the legal units of their shareholders or partners. Businesses have their own possessions, headquarters, patrimony, appellation, registered capital, administration and bank accounts.
The Romanian law defines two forms of companies:
limited liability company "societate cu raspundere limitata" (SRL);
joint stock company "societate pe actiuni" (SA);
A foreign corporation can be sole shareholder (if SRL) or the foreign company can be shareholder together with at least one other shareholder which can be a legal entity or private persons (if SA). The most frequent types of are limited liability companies named SRL.
Any business entity must be incorporated with the National Trade Register Office organized by the Romanian Chamber of Commerce and Industry. The date of incorporation is considered the starting moment of its legal existence. The National Trade Register Office is a public institution mandated to maintain statistical information on business activities in Romania.
The Romania company incorporation process implies that each business organization should have at least one shareholder for the SRL and two shareholders for SA. One person cannot have more than one company in which he/she holds 100% of the shares. Furthermore, one company owned 100% by one person cannot have together with its sole shareholder 100% in other company. The shareholders can be all non-Romanians. The shareholders can be individuals or companies.
Choosing the Business Name in Order to Start Company Romania
The customer decides the name of the company, the form of organization (S.A., S.R.L.) and the main field of activity in order to reserve the name with the Trade Register Office. It is also important to know that the name reservation is done in the Trade Registrer Office and this procedure is usually completed within one working day. The appellation must not include certain words or geographical suggestions. Some words are also subject to approval from the Government or local councils.
In order to start company Romania, individuals should know that for including the word "Romania" in your company name you need to get permission from the Government; this procedure takes about 30 days. The main condition to obtain this name is the following: the major shareholder of the Romanian company has to be a company with the same name like the Romanian company.
But the title of the company which contains the term Romania in its name can be used only together with the entitled shareholder. Obtaining the corporation's name is the first step necessary to acquire subsequent documents.
Registered Office - Essential to Set up Business Romania
In order to set up business Romania the company needs a registered address which must be the official postal address of the company and the place where the authorities can send official letters and claims, serving as well for tax control procedures. All financial and fiscal documents, registers, company papers etc. must be archived at the registered office of the business. The registered address used for the Romania company incorporation procedures must be an up-dated address, no P.O. BOX address is permitted.
Among other services that we provide we included also the registered office facility intended to offer an official address for clients who don't have a company office.
The registered address is proven with a renting contract, property or a free-lease contract. To the contract there shall be added the copy of the property title of the landlord (contract, court decision or other ownership title). For all clients who intend to start company Romania it is important to know that if the property is situated in a block of flats, duplex, etc the approval of all owners or owner's association is required.
The inscription process necessary to set up business Romania is almost identical for limited liability companies (S.R.L.) and joint stock companies (S.A.). First of all, some extremely important documents must be prepared, agreed and signed by the investors.We mention here the incorporation contract and/or company By-laws, as applicable, or the articles of incorporation which is a sole document containing all details required by law.
Furthermore the subscribed capital must be paid upon registration of the company. In the case of a joint stock company (SA), each shareholder must pay at least 30% of its subscribed capital. The registered capital may be subscribed and rewarded by the shareholders by payment in cash, in kind or in receivables;
The initial capital must be subscribed and paid in cash. The law allows in-kind contribution, but cash contribution is compulsory for any type of business organization. The minimum share capital is 200 RON (approximately 80 EUR) for a limited liability company (SRL) and 90.000 RON (approximately 25.000 EUR) for a joint stock company (SA).
The share capital is divided into shares of equal value. One share cannot be less than 10 RON. Consequently, a 200 RON company can have only 20 shares, which means that 1 share equals 5% of the share capital. In joint stock companies 1 share is minimum 0.1 RON. Shares cannot be divided.
Certificate of Incorporation
In the end, the corporation is registered with the Trade Register by issuance of a Registration Certificate. This provides a registration Code valid for both the Trade Register and the tax authorities.
The Registration Certificate also contains a license of acknowledgement mentioning that all requirements for commercial activities are accomplished. The corporation comes into existence and it is entitled to conduct its activities from the date of its registration with the Trade Register.
For any further details or information please do not hesitate to contact us.
by Cristian Darie