This article is intended to clarify some of the questions which arise regarding the role powers and authority of an administrator in a Romanian company.  The powers of the administrator in a Romanian limited liability company are not that extensive in comparison to the powers of administrators of other companies in Europe or other parts of the world.

In principle, the administrator represents the executive body of the company just the same way a government does in a democratic country. The administrators position is to enforce the decisions of the General meetings of the shareholders meeting of the company and the provisions of the Articles of Association.

In contrast to the foreign legislation, the administrator of a Romanian company does not need a special power of attorney in order to carry out his obligations as set forth by the Articles of Association or established in the meetings of the shareholders.

Everything that he does not have authority for can subsequently be approved with a resolution of the meeting of the shareholders.

Upon the incorporation of a company the administrator under the Romanian company law has the obligation to conclude the formalities necessary for the registration of the company at the Trade Registry.  He is also obliged by law to lodge a specimen of his signature at the Trade Registry together with the Statutes of the company and the details of the headquarter of the company.

After the registration of the company with the Trade Registry his role is the running the day to day business of the company as it’s legal representative.

 Running the day to day business of a Romanian limited liability company

The administrator can without any approval from the shareholder meeting, hire staff, fire staff (in accordance with the current labour legislation), conclude and sign lease agreements for work points of the company. He can also appoint in writing for a third party to be his substitute for a period or for specified obligations.  The person so appointed can stand in for him, regarding all his powers or just for some of them as specially mentioned in the document of appointment.

The administrator of a company can sign any contracts on behalf of the company, concerning the company’s business.  He also has the obligation to summon the General/Extraordinary meeting of the company when he requires their approval to perform certain tasks. The administrator can take a loan out for the company if this power has been expressly delegated to him in the Statutes.  The maximum amount of any loan can also set in the Statutes.

Obtaining the approval from meeting.

As mentioned above the administrator carries out the duties of implementing the decision of the meetings of the shareholders of the company.  He carries out the decisions taken by the meeting, and, he registers this decision with the Trade Registry so that third parties and the competent authorities in Romania are aware of the decisions of the general meetings.  For example, it is the obligation of the administrator to register with the Trade Registry the change of the headquarter of the company.

It is the administrator’s responsibility to implement the decisions of the shareholders meeting regarding such matters as:

  • Changing the legal form of the company;

  • Relocation of the company’s headquarter;

  • Changing the main activity of the company;

  • Adding new activities to the statutes;

  • The establishment or abolition of work points: branches, agencies or other such units without legal personality, unless the articles of incorporation provide otherwise;

  • Extending the duration of the company;

  • The share capital increase;

  • A capital reduction or reunification by issuing new shares;

  • Merging with another company or the division of the company;

  • The anticipated dissolution of the company;

  • Amending the articles of associations;

  • Opening a bank account;

  • Acquiring a property;

  • Contracting a loan for the company (this power can be given to the administrator by the Statutes. A limit can be set for the amount of money that the administrator can borrow without prior approval; and

  • Appointing an auditor for the company.

It will be noted from the above that although the administrator has wide powers, at the same time they are limited.  When incorporating a company especially if there is a foreign investor and a local administrator then care must be taken as to what authorities will be given to the administrator.  The drafting of the initial statute should consider not only the current position but also the likely development of the company.