Setting up a Limited Liability Company in Romania
If you have a business idea and want to operate in Romania, setting up a company can be a quick and easy process if you follow the proper steps.
Romanian citizens, as well as foreign citizens and Romanian or foreign companies, can be company founders, providing that they have not committed acts that are recorded in the tax record.
What are the steps involved in setting up a company?
The first step you should take is to choose the legal form you want your company to have, depending on the specifics of your business. In Romania, under the provisions of the Companies Act, there may be more complex forms of organization, such as the general partnership (SNC), the joint-stock company (SA), the limited partnership (SCA), or the limited partnership (SCS). At the same time, in Romania, there are other forms of carrying out economic activities, in the form of authorized natural persons (PFA), sole proprietorships (ÎI), or family businesses (IF).
The most common and widespread form of organization is the limited liability company (LLC), so below, we will present the procedures for setting up such an organization.
- Reservation of the name
Prepare at least three name variants to check their availability and then reserve them on the Commercial Registry website or at the counter of the institution by filling in a standard application form. The name reservation will be valid for three months when the company must be registered.
- Choice of registered office
The company needs a registered office, which will be mentioned in the articles of association and registered with the Trade Register. This may be a space owned by one of the partners or a space leased/used to enable the company to carry out business activities.
If the area is an apartment in a block of flats, the neighbors with a common wall, i.e., the owners’ association, will have to agree in writing to establish the registered office in that space. Another option is for the company director to declare that they do not wish to conduct business activity in the area.
- Drawing up the Constitutive Act
The memorandum of association is the document that transposes the member’s will to join the new company. In Romania, there is the possibility of setting up a company with a sole shareholder, whether a natural or legal person. The memorandum of association is also the regulation that dictates how the company operates. The message of the association must contain information.
- Identification details of the founders;
- Form, name, duration, and registered office;
- Subject matter;
- Share capital, shares;
- Rights and obligations of members;
- Organization and management of the company;
- Administration of the company, with the appointment of the first administrator;
- Company activity;
- Control of activity, with the appointment of a censor;
- How to dissolve and liquidate the company.
This deed can be drawn up according to the models provided by the Trade Register on their website and then signed by all the founding members of the sole partner.
The object of the activity
The main activity, identified by a CAEN code, is the one that will appear in the company’s articles of association and registration certificate. In addition, the limited liability company offers the possibility of choosing a vast number of secondary objects of activity, to be mentioned in the memorandum of association. The company will also be able to carry out its activities in these areas of activity, provided that they are authorized by an application submitted to the Trade Register.
Even if the memorandum of association may include a large number of secondary objects of activity, it will not be possible to include those which require prior authorizations which have not been obtained, those which can only be carried out as a single object of the activity or those which are prohibited for specific categories of the economic operator if they are incompatible with the activity you wish to carry out.
- Establishment of share capital
Further, the amount of share capital must be determined. In the case of a limited liability company, the minimum share capital has been reduced from 200 lei to 1 leu. It is no longer necessary to prove that the share capital has been paid in when the company is set up, so the bank account to which the share capital is to be transferred can also be opened after the company has been registered with the Trade Register.
- Preparation and filing of the file at the Trade Register Office
The registration file must be submitted to the Trade Register Office in whose district the registered office is located, on the web portal or by e-mail with an electronic signature or at the counter and must include the following documents:
- Application for registration;
- Annex 1 on tax registration and, if applicable, Annex 2 on foreign investment;
- A standard declaration on oath, signed by the partners or directors, stating that the legal person does not carry out activities outside the declared premises (model declaration 1) and that the conditions of operation are met (model declaration 2);
- Proof of availability check and reservation of company name;
- The original of the constituent instrument;
- A document evidencing the right of use of the space;
- Deeds for ownership of contributions in kind, if applicable;
- Affidavits from the founders, directors, and auditors stating that they meet the legal requirements for these qualities;
- Identity papers of founders, directors, and auditors;
- Specimen signatures of company representatives;
- (Where applicable) Authenticated affidavit of the foreign national in their name or as representative of a legal entity not registered for tax purposes in Romania, and possibly a translation by an authorized translator;
- (Where applicable)
– registration documents of founders, administrators, and non-resident auditors;
– consent of the owners’ association;
– proof of prior authorizations/permissions where required by law;
– proof of the power of attorney of the person appointed to carry out legal formalities in original;
- Declaration of the beneficial owner of the legal entity;
- Proof of payment of the fee for publication of the registration in the Official Gazette, Part IV.
For the necessary applications, declarations, and annexes, the Trade Register provides you with standard forms on its website.
An essential benefit of setting up a company in Romania is the low costs involved in the process. The prices at the Trade Registry are 122 lei for setting up an LLC.
If you need help setting up a company in Romania, you can contact the Romanian Law Firm Blaj Law.