[ESTABLISHING A BUSINESS ENTITY IN ROMANIA] 399
first members, which are appointed in the constitutive act. The Supervisory Board is comprised of between three and eleven members. Members of the Supervisory Board may be revoked at any time by the GMS by a resolution adopted by a majority of at least two- thirds of the votes of the attending shareholders. The members of the Supervisory Board may not be members of the Management Board (Directorat) or employees of the company. The members of the Supervisory Board are appointed by the GMS, with the exception of the first members, which are appointed in the constitutive act. The Supervisory Board is comprised of between three and eleven members. Members of the Supervisory Board may be revoked at any time by the GMS by a resolution adopted by a majority of at least two- thirds of the votes of the attending shareholders. The members of the Supervisory Board may not be members of the Management Board (Directorat) or employees of the company. 3.2. Reporting requirements Romanian legal entities are required to submit annual financial statements to the Ministry of Finance by May 31 of the financial year following the reporting year (if the company has its financial year similar with the calendar year); for companies with the financial and fiscal year different from the calendar year, the deadline remain 150 days after the closing of the changed financial year. The format of the financial statements to be submitted (i.e., either extended or simplified) depends on the category of entity (micro-entities/small entities/medium and large entities), which is established based on key indicators from the financial statements of the previous financial year. Branches and other sub-units of a non-resident legal entity residing in the EEA are not required to submit annual financial statements; however, they are required to submit some financial reports by
May 31 of the financial year following the reporting year; The financial statements of medium and large entities are subject to statutory financial audit. Also, entities that meet at least two out of the following criteria for two consecutive years are also subject to financial audit: (i) total assets: RON 16 million; (ii) turnover: RON 32 million; (iii) average number of employees: 50. 3.3. Requirements for local shareholdings/directors For shareholders, directors may be either natural persons or legal entities and there are no requirements in respect of their nationality. Furthermore, persons who, according to the law, do not have legal capacity, or have been convicted of certain crimes (such as fraudulent management, breach of trust, forgery, use of forgeries, embezzlement, bribery, transgressions of the legislation concerning money-laundering), cannot be founders, shareholders, directors or members of the board. Companies that are in the performance of their function in a Romanian company’s corporate body must be represented by an authorized individual representative who must fulfil the abovementioned requirements as well. 3.4. Protection of minority shareholders The issue of minority shareholders is especially posited in the case of joint stock companies, given that in the case of LLCs, the general rule of double majority provides for sufficient protection. For example, shareholders holding separately or collectively at least 5% of the JSC’s share capital may introduce on the agenda of the shareholders’ meeting new items; they may ask the board of directors or the statutory director
ILN Corporate Group – Establishing a Business Entity Series
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