Romanian Company Law no. 31/1990 was recently amended with notable changes regarding: (i) the mechanisms applicable to the dissolution and liquidation of companies; (ii) cross-border mergers; and (iii) charges over shares. The amendments became effective on 16 July 2015.
1. DISSOLUTION & LIQUIDATION OF COMPANIES
Among other changes and clarifications, the newly amended law expands and clarifies the grounds for a company’s dissolution, which now include:
- failure to file its annual financial statements or its public accounting reports within 60 business days after the deadline;
- failure to file a statement ascertaining its inactivity within 60 business days, if the company has been inactive since its registration; and
- failure to resume activities, when the company had been dormant for three years (where the fiscal authorities and the Trade Registry were informed of the dormancy).
According to the amended law, the Trade Registry must publish the names of companies for which it is pursuing dissolutions claims on its website or its online portal at least 15 calendar days prior to the proceedings and also send the names to the Ministry of Public Finances. (As under the prior law, both the National Office of the Trade Registry or any interested person may submit a dissolution claim to the competent county court.)
After a court’s resolution on a dissolution claim becomes final, any interested person can request the National Office of the Trade Registry to appoint a liquidator and, if no request to appoint a liquidator is filed within three months after the dissolution decision is final, request the company’s deregistration. The amended law extends the deadline to appoint a liquidator from 30 calendar days to 60 calendar days from the date the liquidation request was filed and the liquidator no longer has a duty to submit a report regarding the status of the liquidation after the first six months of appointment.
A company’s liquidation may last for a maximum period of one year from the date the request for the liquidation was filed, the same as under the previous law. Under the amended law, this one year deadline may be extended up to two times, by request made to the Trade Registry. Under the old version of the law, extension requests had to be made to the competent county court and each extension was limited to six months with the total period of the extension limited to two years.
The final liquidation report and the liquidation financial statements must be submitted to the Trade Registry within 15 calendar days after the liquidation process ends. The fine payable by the liquidator for failing to submit these documents has been reduced from RON 200 per day of delay to RON 20 per day of delay.
2. SECURITIES OVER SHARES
The amended law permits the creation and enforcement of securities for shares in limited liability companies and creditors of a shareholder are expressly entitled to seize and sell the shareholder’s shares in limited liability companies. Also, a mortgage created on shares in joint-stock companies or limited liability companies may be enforced, and the directors or the members of the management board, as the case may be, must provide the financial statements and any other information necessary for the creditors to assess the shares. Moreover, the amended law expressly permits shareholders of a limited liability company to create mortgages over their shares based on the approval of the shareholders representing at least 75% of the company’s share capital.
3. CROSS-BORDER MERGERS
Pursuant to the amended law, the Trade Registry where the absorbing company or the newly formed company is registered must immediately notify the correspondent authorities of the EU Member States where the companies are registered about the completion of the cross-border merger. This notification will be made through the Trade Registries interconnection system, at the company’s expense.
Additionally, under the amended law, in cross-border mergers where the target company is to be absorbed into the acquiring company and where the acquiring company owns 90 to 99.99% of the target company’s shares or securities that grant their holder the right to vote in the management meetings, a report by an independent expert with respect to the merger is mandatory only if required by the law governing the acquiring or the target company.