WHAT IS A SRL IN ROMANIA?
Both natural and legal persons can associate and set up various companies with legal personality to carry out various profit-making activities, in accordance with the provisions of special legislation.
Law no. 31/1990 provides for the regulated types of companies with legal personality, which include the limited liability company, as well as other forms of company such as: general partnerships, limited partnerships, joint-stock companies, etc. Analyzing all the types of company found in the special legislation, we can see that the easiest and most common form of organization for a small or medium-sized business will always be a limited liability company, which also has low start-up costs. This type of company is the only one that can also be set up by a single act of will, in which case it is sufficient to draw up articles of association.
To set up such a company, the law no longer requires a minimum share capital of 200 lei to be subscribed, as was previously the case, which can now be as little as 1 lei. As this type of company is intended for medium-sized enterprises, the number of shareholders may not exceed 50.
The memorandum of association of the limited liability company will contain the following essential aspects:
- the identification data of the partners
- form, name and registered office
- the objects of the company, specifying its field of activity and principal business
- the subscribed share capital, specifying the contribution of each member in cash or in kind, the amount of the contribution in kind, the manner of its valuation; it shall also specify the number and nominal value of the shares and the number of shares allotted to each member for his contribution;
- the manner in which decisions of the general meeting of members shall be adopted by a vote of all members where, owing to the parity of the share capital, an absolute majority cannot be established;
- the partners who represent and manage the company or non-associate directors, their identification data, the duration of their term of office, the powers conferred on them and whether they are to exercise them jointly or separately;
- if auditors or financial auditors are appointed, the names of the first auditors and the first financial auditor respectively;
- the share of each partner in profits and losses;
- where applicable, where required by law, the identification of the beneficial owners and the manner in which control of the company is exercised;
- the secondary establishments – branches, agencies, representative offices or other similar establishments without legal personality, where they are set up at the same time as the company, or the conditions for their subsequent establishment, if such establishment is contemplated;
- the duration of the company;
- the manner of dissolution and winding up of the company; the arrangements for meeting liabilities or settling them in agreement with creditors, in the case of dissolution without liquidation, where the members agree on the distribution and liquidation of the company’s assets.
Following the drafting and signing of the memorandum of association, the founders or the first administrators are obliged, within 15 days from the date of its conclusion, to apply for registration of the company in the Commercial Register in whose territorial radius the company will have its registered office. If they fail to do so, they shall be jointly and severally liable for any potential damage caused by the non-registration.
A limited liability company having its registered office in a particular county may set up secondary offices in other localities, places of business or even branches (the latter being unincorporated dismemberships of companies that register, before starting their activity, with the commercial register of the county in which they will operate).
WHAT ARE THE OBLIGATIONS AFTER SETTING UP A SRL IN ROMANIA?
First of all, even though the minimum amount of the share capital may be 1 leu, the stage of paying it in, i.e. depositing the amount in the open account, should not be neglected. To this end, Law no. 31/1990 expressly provides that a limited liability company is prohibited from carrying on business before at least 30% of the subscribed share capital has been paid up, the balance of which may be transferred after the start of business.
Art. 9.1 para. (2) of the mentioned law stipulates that the limited liability company must pay up 30% of the amount of the subscribed share capital not later than 3 months from the date of registration, but before commencing operations on behalf of the company, and the difference of the subscribed share capital shall be paid up:
- for cash contribution, within 12 months from the date of incorporation;
- for contributions in kind, within 2 years from the date of registration.
In order to pay up the share capital, as mentioned above, the company must have a bank account, and in order to carry out this operation, the following documents will be required to open the account:
- The resolution issued by the Commercial Registry regarding the establishment of the company;
- Company registration certificate;
- Certificates of the company;
- Deed of Incorporation;
- The commodatum contract;
- Certificate issued in accordance with Law No 265/2022.
Since the special law requires companies to be organized also from the financial-accounting point of view, this aspect must be taken into account for the purpose of drawing up the compulsory registers and the presentation of annual financial statements. If the company’s object of activity, the large number of employees and the size of the financial operations carried out and the company’s administrators deem it appropriate, they may employ a person with accounting knowledge to handle the financial side.
The company must also draw up a set of Internal Rules laying down the duties and working conditions applicable to the company before employing staff.
There are also a number of obligations laid down in the relevant tax rules, including the obligation for a taxpayer who carries out economic activities through a place of work to register this place of work with the tax authorities.
