Last updated: 9 September 2022
As part of the digitization process of public services, new regulations on the formalities for incorporation of companies to the Trade Register were enacted under the Law n° 265 of July 22, 2022, published in Official Gazette n° 750 of July 26, 2022.
The new Law No. 265/2022 reaches well beyond the registration formalities aiming at simplifying the legal framework for the incorporation and operation of companies. The regulation is to enter into force 4 months after the date of publicity in the Official Gazette – i.e. in November 2022.
There’s an overview of the main elements of novelty brought by Law No. 265/2022:
New rules regarding the registration formalities to the Trade Register
The application for registration
Starting with the date of entry into force of the new law, the application for registration and the supporting documents, drawn up by lawyers or notaries, can be signed by the latter by means of a qualified electronic signature and filed to the Trade Register electronically.
However, the application for registration and the supporting documents can still be filed on paper, at the counter or by mail.
According to the newly enacted Law no. 265/2022 the application of registration is to be processed within one working day since registration.
The signature specimen – no longer required
The representatives of the company will no longer be required to submit their signature specimen to the Trade Registry (neither when they are appointed under the articles of incorporation, nor when they are elected when the company is operational).
Registration of branches of foreign companies
With regard to the registration procedure for branches of companies having their registered office in an EU Member State, the new law provides that certain documents and information may be obtained and verified by the National Office of the Trade Registry via the system of interconnection of business registers of EU Member States.
The National Office of the Trade Register (ONRC) will be able convey to the Trade Register of the head office of the foreign legal entity a registration excerpt regarding the branch, via this same electronic system. In addition, registration certificates may be issued (once the preliminary procedure for filing and examination of the file has been completed) in electronic format, signed by means of a qualified electronic signature / qualified electronic seal.
Simplification of the documentation to be produced for the incorporation of a company
The main changes enacted by the new Law aim to reduce the number of documents to be provided when setting up a company:
Online company incorporation
One of the main novelties brought by the Law no. 265/2022 is the possibility to carry out exclusively online all the formalities for setting up a company.
For the record, under the current regulations, the procedure for setting up a company can be carried out only partially online. In the future, the articles of incorporation of a company pending incorporation may be drawn up entirely online, by filling in a standard form with predefined options, a form which will be available on the Trade Register website (ONRC).
The articles of incorporation will be signed by the shareholders or their representatives by means of qualified electronic signatures. During the procedure for setting up a company online, the Trade Register may exceptionally require in person presence at a given stage; but all subsequent steps will be pursued entirely online.
Name availability
It is no longer required to provide proof of the name availability.
Signature specimens
Filing the signature specimen of the representatives of the company to the Trade Register within 15 days since their appointment is no longer mandatory.
Sworn statements
The shareholders, the first directors and, as the case may be, the managers, the first members of the managing board and of the surveillance board and the first auditors are no longer required to sign a sworn statement certifying that they meet the conditions provided for by law to act in this capacity.
Share capital
The obligation to fully pay up the share capital of a limited liability company (SRL) upon incorporation is removed.
The share capital may be paid up in installments: 30% of the amount of the subscribed share capital within 3 months at most from the date of incorporation, but no later than the date when the company actually starts running, and the rest within 12 months (except for the contribution in kind which can be paid up within maximum 2 years from the incorporation date).
Contributions in kind
For contributions in kind subscribed and paid up upon incorporation, it is no longer mandatory to produce underlying ownership documents, and when it accounts for real estate property, it is no longer mandatory to produce an encumbrance certificate on the property.
Other new changes brought by the Law 265/2022
There follow some of the other elements of novelty enacted:
Removal of the unanimity rule for LLC : After the entry into force of Law no. 265/2022, in a bid to smooth the decision-making process within LLCs, absolute majority will suffice for making the decisions aimed at amending the articles of incorporation, unless otherwise provided thereunder; whereas such decisions are currently made unanimously by the shareholders, unless otherwise provided for by the law or the articles of incorporation.
The articles of incorporation : The law no. 265/2022 comes with several changes relating to the content of the articles of incorporation :
- With regards to limited liability companies (SRL), the new law expressly provides for a number of mandatory elements to be stated in the articles of incorporation, namely: the term of office of the directors; the procedure for adopting the decisions of the GM if, due to the parity of the number of shareholders, absolute majority cannot be reached; the procedures for debt repayment or settlement in agreement with the creditors, in the event of dissolution without liquidation, when the shareholders agree on the distribution and liquidation of the company's assets.
- In the case of a public limited company or a partnership limited by shares, the articles of incorporation must also state whether the company is listed on a regulated market and whether there are any restrictions on the transfer of shares.
New sanction regime : Failure to comply with the obligation to keep a register of shareholders can, from now on, give rise to a fine of between 5,000 and 15,000 RON (approximately 1,000 to 3,000 EUR) and may result in the dissolution of the company.
New rules of operation of the Trade Register : The law no. 265/2022 introduces new concepts, such as that of "registrar" of the Trade Register, replacing and repealing the anachronistic notion of delegated judge.
The law also sets up the “Electronic Bulletin of the Trade Register” - an electronic platform available free of charge via the ONRC's online services portal. Part of the company's documents will be published in this bulletin (decisions of the registrars of the Trade Register, certain court decisions registered in the Trade Register, etc.), whereas the others (for example, decisions of the GM or the decisions adopted by the management bodies) will continue to be published in the Official Gazette.
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Now, methodological rules for enforcement of the Law no. 265/2022 will follow and are expected to be issued by the Ministry of Justice within the 60 days following the entry into force of the law, so it remains to be seen how soon it can be implemented.
One thing is for sure though: the new law aims to reduce the administrative burden weighing on the business environment and thus make the local market more attractive to foreign investors. Hopefully, it’s just the first important step in this direction.