Creation of a public limited company (SA) in Romania (societate pe actiuni in romania )

If you invest in Romania, thenthe limited company is one the options. A joint stock corporation isnormally recognized by the use of the words limited incorporated orcorporation in its name (Societate pe Actiuni, S.A).

The creation of a public company requires a minimum capital of theRomanian equivalent of 90000 RON. At the day of the creation at least30% of the social capital is paid and if it is a creation by publicsubscription then this percentage increased to 50%.

Within 12 months from the registration (formation of the company inRomania) of the company at the local registry the social capital shouldbe fully paid via a Romanian commercial bank. If you increase thecapital, the maximum period for full payment for the new shares is 36months.

A public limited company must have at least two shareholders, it maybe natural - and legal persons. The partners of a limited liabilitycompany are only liable within the limits of their contribution to thecompany. The capital of a limited liability company is represented byshares in registered or bearer shares and may be freely tradable.

Each share has a nominal value of at least 0.1 new lei. In addition,all shares of equal value, because all members of a limited liabilitycompany have equal rights.

The management of a joint-stock company is assumed by a Council ofAdministration (Board of Directors), although it is possible to haveonly one Administrator. At least half of the Administrators must beRomanian citizens unless the articles of incorporation and corporateby-laws provide otherwise. The Directors do not necessarily need to beshareholders. The Directors are appointed by the General Meeting ofshareholders, which establishes their powers, for a maximum mandate offour years. They may be re-elected. Before starting their activity, theDirectors must deposit a guarantee, representing at least the value often shares or double the amount of their monthly remuneration.

Decisions are taken by majority vote at the General Assembly, ashare represents a vote in principle but there may be restrictionsplaced on the voting rights of a shareholder who holds more shares.

At least once a year a general meeting of shareholders must be held.This meeting must take place within 3 days after the end of the fiscalyear of the company. The financial statements will be disclosed toshareholders and the results are discussed.

Law No.99/1999, regarding certain measures for the economic reformacceleration, added new provision to the Company Law. Therefore, anyshareholder is entitled to request information on the management of thecompany, maximum twice during a financial year. In addition, one orseveral shareholders representing at least 10% of company share capitalmay request the court to appoint experts which will be in charge withthe analyses of certain operations in the management of the company.Such experts will draw up a report, which will be handed over to theauditors of the company.

The unnamed company is represented by the Board of Directors, whichconsists of one or more directors, they are elected for a maximumperiod of four years, this period may be renewed subsequently.

The Board has the authority to delegate his powers to a ManagementCommittee. The directors of a public company must disclose the sameinformation and submit the same documents as the directors of a privatecompany. In establishing a limited company there should be a board of 6censors. Their job consists of checking the activities of the company.At least one of these six censors must have an approved auditor. Thecensors are elected by the majority on the Assembly, increasing theirmandate lasts 3 years. Afterwards they can be re elected for anothermandate. The censors are accountable regarding their findings to theGeneral Assembly. First they check the accounts of the company and keepan eye on them or clauses which were fixed by the statutes are notviolated. If an irregularity is determined by the censors, they mayconvene a General Meeting.

A Romanian limited liability company may be listed on the Romanianstock exchange, the Bucharest Stock Exchange. The formal adoption ofthe CVNM (the Romanian stock exchange and commission) is required, thecompany should already have minimum 3 years activities and capital thecompany must be at least € 1 000 000.00 amounts, in some cases CVNM maydecide to deviate from these conditions.
The constitutive act of the joint-stock company or of the limited partnership by shares shall contain:

a) the name and first name, place and date of birth, the domicileand citizenship of the associates, when they are natural persons;denomination, their registered office and the nationality of theassociates, when they are legal persons; in case of a limitedpartnership by shares the active partners as well as the sleepingpartners shall be clearly identified;
b) the form, denomination, the registered office and the emblem of the company, when there is the case;
c) the company's object of activity, specifying the field of action and its main activity;
d) the subscribed and deposited registered capital. At the time ofsetting up the subscribed registered capital, deposited by eachshareholder, shall be no less than 30% of the subscribed capital,except where the law provided otherwise. The remaining of theregistered capital shall be deposited within 12 months from the date ofthe company's incorporation;
e) the value of the assets brought as contribution in kind, the methodof evaluation and the number of shares attributed against them;
f) the number and nominal value of the shares, specifying whether theyare registered or on bearer; where there are different categories ofshares the number, nominal value and the rights conferred to eachcategory shall be specified;
g) the name and first name, place and date of birth, the domicile andcitizenship of the managers, when they are natural persons;denomination, the headquarters and nationality of the managers, whenthey are legal persons; the guaranty which the managers are bound todeposit, the powers vested in them and whether they shall exert thesaid together or separately; the special rights of administration andrepresentation granted to some of them. In a limited partnership byshares the active partners who represent and manage the company shallbe identified;
h) the name and first name, place and date of birth, domicile andcitizenship of the auditors, when they are natural persons;denomination, headquarters and nationality of auditors, when they arelegal persons;
i) provisions regarding the management, functioning and control of thecompany by the statutory bodies, the controlling of the company by theshareholders, as well as the documents to which these shall have accessin order to inform themselves and to exert control;
j) duration of the company;
k) method of profit distribution and loss bearing;
l) location of its subsidiaries - branches, agencies, representationsor other offices of the same kind without legal personality - when theyand the company are set up at the same time, or the conditions to setthem up at a later date if such a setting up is considered;
m) special benefits reserved for the founders;
n) the shares for the sleeping partners in a limited partnership by shares;
o) operations concluded by associates on behalf of the company to beset up and which the company is going to take over as well as the sumsof money to be paid for those operations;
p) method of dissolution or liquidation of the company.

Concerning the registration of the company and of the corporate headquarters is amended as follows from 23 July 2010:

a) The first registration of a company: For the notarization of theconstitutive act or for certification of its date, one must present i)the document issued by the trade registry for proving the availabilityand reservation of the company’s name, and ii) its declaration on ownresponsibility in respect of being a sole shareholder in only onelimited liability company.

Both the public notary and the person who certifies the date of theconstitutive act will refuse to notarize/certify the date if theabovementioned conditions are not fulfilled.

b) The headquarters of the company: For the first registration of acompany or for changing the headquarters, the following documents mustbe submitted at the trade registry:
• the document certifying the right to use the building asheadquarters, registered at the fiscal authority from the NationalAgency for Fiscal Administration, in whose district the building islocated;
• a certificate issued by the fiscal authority referred to in point a),attesting that, for the building used as headquarters there has notbeen recorded another document proving a previous transfer of the rightof use or other contracts for the transfer of the right of use on thesame building, if any;
• in case the certificate issued under point b) proves that there havealready been registered at the fiscal authority other documents whichattest the transfer of the right of use upon the same building, theremust be submitted a statement on own responsibility in respect of thefulfilment of the legal conditions, as detailed in paragraph c. (seebelow)
By way of comparison, before this amendment, there were no documentsfrom the fiscal authority needed to be submitted to the trade registry,neither for the first registration, nor for changing the premises.
c) Legal conditions in respect of the headquarters At the samepremises, several companies can be registered only if the building, byits structure and surface of use, allows the carrying on of theactivity of more companies, in different rooms or separate places. Thetotal number of the companies can not exceed the number of the rooms orseparate places.

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