[ESTABLISHING A BUSINESS ENTITY IN ROMANIA] 389
ESTABLISHING A BUSINESS ENTITY IN ROMANIA 1. Types of Business Entities When entering the Romanian market, foreign investors have the option of incorporating a new legal entity with a Romanian legal personality, or setting up a unit of a foreign mother company, which will not have a Romanian legal personality: Under Romanian law, companies with a Romanian legal personality may have the following forms: • Limited liability companies ( societati cu raspundere limitata ); • Joint stock companies ( societati pe actiuni ); • Limited partnerships ( societati in comandita simpla); • Limited partnership by shares ( societati in comandita pe actiuni ); • Partnerships ( societatea in nume colectiv ). Foreign investors also have the option of incorporating a European company ( Societas Europaea ), with its headquarters in Romania. The most common types of companies under Romanian law are limited liability companies ( societati cu raspundere limitata ) and joint stock companies ( societati pe actiuni ) Foreign mother companies may establish units without a legal personality in Romania, such as:
Shareholders in limited liability companies may be foreign or Romanian individuals or legal entities and their number cannot exceed 50. The sole shareholder can have in its turn as sole shareholder a limited liability company, while one person may be sole shareholder in more than one limited liability company. It should be noted that in limited liability companies with sole shareholders, the sole shareholder – natural person may simultaneously act as shareholder, director and employee of the company. The contributions of the shareholders to the share capital of limited liability companies may consist of cash and contributions in kind (movable or immovable assets); there is no minimum share capital required; however, it is recommended that at least RON 1 per shareholder be submitted. Shares in limited liability companies cannot consist of freely negotiable bonds. The share capital must be paid entirely upon the incorporation of the limited liability company. The liability of the shareholders is up to their participation in the share capital of the limited liability company. The purpose of business of a Romanian LLC acting as subsidiary of a foreign mother company may be larger than or different from that of the mother company. The duration of the LLC may be undetermined. 1.2. Joint stock companies Joint-stock companies must have at least two shareholders, either natural persons or legal entities, Romanian or foreign. The company may be dissolved should the number of shareholders become fewer than two, and should no regularization be implemented within nine months. A joint-stock
Branches ( sucursale );
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• Representative offices ( reprezentante ). 1.1. Limited liability companies Limited liability companies (LLCs) are one of the most commonly used corporate forms under Romanian law. LLCs are founded by the signing of a constitutive act by the shareholder(s).
ILN Corporate Group – Establishing a Business Entity Series
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