The Romanian Commercial Code provides for various types of entities that can be created by natural persons and companies, local or foreign. Each of them has its own particularities, which can give it various advantages. How do you choose among them? We will review the main types of companies and their pros to help you get an idea of what works best for you.

The legal entities you can register in Romania

Here are the main types of entities you can choose from if you want to start a business in Romania:

• the private limited liability company (SRL);
• the joint stock company (SA);
• the general or collective-name company (SNC);
• the limited partnership (SCA);
• the sole proprietorship (PFA).

How do you choose between these business forms?

If you wonder how to choose an appropriate legal entity, so that you can carry out your activities with the least hassle, here are some key points to consider:

• the capital you have;
• the type of activities you want to carry out;
• meeting the registration requirements in terms of shareholding and management structures.

With respect to the incorporation formalities, they are simple to complete if you use a local service provider such as Infiintare firma,  which can complete the procedure on your behalf. La Registru will help you overcome language barriers and make the registration process as easy as possible.

By far, the private limited liability company is the most popular business form in Romania, however, you can also choose between other legal entities, as you will find more of them below.

The Romanian private limited liability company

From a shareholding and management structure, the SRL resembles similar types of companies in other European countries. This is one of its main advantages, as you will know what to expect and how it works once you incorporate it. Let’s explain:

• this business form requires at least one shareholder and one director;
• it can have multiple directors, if you choose so;
• its incorporation relies on the creation, notarization, and filing of the Articles of Association;
• as any other local company, you will also need to establish a local registered address.

The main advantages of an SRL are:

• the limited liability of the shareholders;

• the quick registration process;
• operational flexibility, as it can be used for most commercial activities;
• it has a simplified form (SRL-D) for which various tax benefits are available, and which is suited to first-time entrepreneurs.

The Romanian joint stock company (SA)

This is the most complex type of entity in Romania, and it is usually created for two purposes:

1. to list shares on the Stock Exchange;
2. to engage in large operations.

For its creation, it is necessary to ensure:

• a minimum of two stockholders;
• a minimum capital of 90.000 RON (around 25.000 EUR);
• a management that can be ensured by an administrator or administration/supervisory board.

When should you choose this business form? When the activities you want to undertake require a large capital or are more complex. On the list of advantages, we can also add the possibility of attracting capital by simply listing shares on the Stock Exchange.

The general partnership

This business form is usually created by at least 2 members who bear unlimited liability for the debts and obligations of the enterprise. Even if it is not often used, the SNC has several advantages, among which the most important are:

• the easy setup procedure;
• the lack of a minimum imposed share capital;
• the simple administration process;
• taxation, which occurs at membership level.

The limited partnership

The SCA is a business form that requires at least 2 members and where one has unlimited liability while the other (the silent partner) has limited responsibility towards the debts of the entity. It is also not often used, however, it has several benefits. Among them, the following are worth mentioning:

• it can issue shares to draw in capital from investors;
• administration flexibility, thanks to its limited/unlimited membership structure.

The Romanian sole proprietorship

This is the most suitable option for single entrepreneurs, professionals, and craftsmen who can become self-employed. The main advantage of this structure is the easy setup process and the simple administration. Also, the sole trader will be entitled to all the profits of the business.

The registration of any business form must be completed with the local office of the Trade Register in the Romanian county where you plan to run your activities.

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