Amendments to Romanian company law

Romanian company law has changed for joint stock companies and limited liability companies from 1 December 2006.

The main changes are:

• reducing from 5 to 2 the minimum number of shareholders required to set up a joint-stock company or a partnership limited by shares. Removing the need to co-opt additional nominee shareholders should encourage prospective investors in Romania to set up joint-stock companies
  
  
• changing the minimum share capital for a joint stock company to RON 90,000 (c. €25,000), with allowance for a further change every 2 years to keep it at the RON equivalent of  €25,000
  
  
• introducing the concept of authorized capital to be set out on the company’s constitution or decided by resolution of shareholders. This represents the maximum level to which the directors can increase a company’s share capital for 5 years after incorporation or from the most recent amendment of its authorised capital.
  
  
• new reduced quorum and voting majority requirements for shareholder meetings
  
  
• longer notice for calling a general meeting
  
  
• reducing the percentage of share capital required to convene a general meeting from 10% to 5%
  
  
• allowing joint stock companies to choose between a unitary and dualist system of management: the dualist system has a supervisory board in addition to a directorate whereas the unitary system involves a single board (in some cases, a single director) but the roles of executive and non-executive directors have been brought in line with recent European developments
  
  
• mandatory professional liability insurance for directors (including all members of the directorate and supervisory board in a dualist system)
  
  
• a requirement (after amending the company constitution) to file a revised version of the whole document at the local Trade Registry Office, instead of just the amendments. This makes it easier to understand the constitution after several amendments have been made
  
  
• removing restrictions on voting pacts between shareholders so that the only prohibition applies to an agreement to vote according to the instructions or proposals formulated by the company itself or its representatives.
  
  
• removing controversial provisions which effectively allowed the assets of a limited liability company with a sole owner to be transferred to the sole owner on dissolution, effectively allowing corporate veil to be pierced.
  
  
• new provisions bringing company dissolution, merger and spin-offs in line with EU legislation.