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Romanian legislation simplifies the formalities for setting up a company. Natural persons will have the opportunity to control several limited liability companies with a sole shareholder.
A series of amendments to the Companies Law, which enters into force on July 5, 2020, simplifies the procedures for setting up a company, which confirms the steps taken by the Romanian judiciary towards the elimination of bureaucracy of the procedures related to the registrations at the Trade Register.
We can say that these changes, which will be applied starting with July 5, 2020, will lead to the acceleration of the registration process of new companies and to the stimulation of entrepreneurial initiatives.
We also note that these changes bring a number of other benefits expected by the business environment. First, the ban on being a sole shareholder in several limited liability companies has been removed.
With the new legislative changes there is the possibility for groups of companies to ensure control through a single company ("holding companies" ) that will be able to hold the status of sole shareholder in all companies in the group, without the need to ensure minority holdings by companies in the same group (prior to these changes, at least a shareholding in the group companies must be owned by another person, in order to ensure compliance with the restrictions on the sole shareholder).
According to the previous provisions, at least a share of the companies in the group had to be owned by another person, in order to ensure compliance with the restrictions on the sole shareholder.
Also, following the applicability of the new changes, natural persons will have the opportunity to control several limited liability companies with a sole shareholder.
In other words, if prior to the registration of a company with a sole shareholder, as well as in any operation resulting in the transfer of a company from joint control to sole control, the authentic declaration of fulfillment of the conditions regarding the sole shareholder was required according to art. 14 of the Companies Law, starting with July 5, 2020, the procedure was significantly simplified, as this type of declaration is no longer necessary.
At the same time, the number of documents required in connection with the registered office is reduced. Both the declaration of conformity of the space for use by several companies(referred to in unofficial language as "declaration of non-overlap") and the prohibition on the number of companies that can operate in a building or space have been removed.
Thus, a space could represent the headquarters for an unlimited number of companies, without the need for additional works for the distribution of space.
An important change concerns the elimination of the need to obtain the consent of the owners' association. Until now, if a person wanted to establish his registered office in a collective residential building, he had to obtain approval from the owners'association and the affected neighbors who live directly next to that residential space.
Such approval is no longer required if the company's administrator declares on his own responsibility that no activity will take place at the registered office.
These legislative changes are provided by Law no. 102/2020 published in the Official Gazette of July 2, 2020, through which a series of amendments were made to the law of commercial companies no. 31/1990, and which will bring a number of benefits to the business environment.
Author: Alexandra Florescu, Associate, Grecu & Asociatii.
This is native content supported by Grecu & Asociatii.