General considerations
Recently, on the 26th of November 2022, the Law No. 265/2022 on the Trade Register and on amending and supplementing other acts of law affecting registrations in the Trade Register (“Law 265”) entered into force.
The Law 265 transposes Directive (EU) 2019/1.151 of the European Parliament and of the Council of 20 June 2019 amending Directive (EU) 2017/1.132 as regards the use of digital tools and processes in the context of Companies Law and brings a number of important changes to the work of the Trade Register. Additionally, brings important amendments to the Companies Law No 31/1990, concerning corporate operations such as mergers or spin-offs, capital increases or the dissolution and liquidation of companies, with the intention of disciplining and simplifying in an efficient manner the regime related to these operations.
The status of the Trade Register officer is restructured, defined as the legal specialist staff of the Trade Register, who is responsible for carrying out the public service of legality control prior to registration in the Trade Register. The notion of “designated person” thus disappears. As a novelty, the officer will have to have a law degree and at least 5 years’ experience as a legal specialist, and the position of officer will be filled by exam.
The Electronic Bulletin of the Trade Register is introduced as a central online platform where a number of registrations made through the Trade Register are publicly available. Law 265 also regulates online access to company information, including information on companies registered in other EU Member States, through the system of interconnection of registers of EU Member States, which makes available extensive and up-to-date information on the establishment and operation of companies, including information on beneficial owners. To this end, the new law provides that:
- The documents and information relating to natural and legal persons registered in the commercial register shall also be filed in electronic format in order to enable faster provision of electronic, certified copies of the documents submitted, even if they have been filed in paper format
- The categories of information that can be obtained free of charge from the registers of the Member States through the register interconnection system are extended
- More data becomes available in the register, e.g. on branches (in the branch register, data on the parent company in another Member State and, conversely, in the parent company register, information on the branch
- User-friendly information will be made available to the public on the online service portal of the Trade Registry and on its website, in Romanian and English, on the most important aspects of the establishment of legal persons and the registration of natural and legal persons
Corporate amendments
Among the amendments made by Law 265 concerning companies, we mention the following:
- Extension of the ONRC officer’s jurisdiction to the merger/division procedure [second stage of the merger/division procedure will no longer take place before the court]
- Removal of the requirement to pay in full the contribution to the share capital of the limited liability company at the time of its formation [phased payment of the share capital is introduced, as follows: 30% within 3 months of incorporation, the remaining 70% within 12 months of incorporation, with the exception of contributions in kind which may be made within 2 years of registration]
- Increase the time limit for the implementation of the resolution of the general meeting on the capital increase from 1 year to 18 months
- Removal of the requirement to obtain and submit the consent of the Secretariat General of the Government (“SGG”) for using in the companies’ names the words ‘Romania’, ‘national’ and derivates.
Removal of the requirement to submit a specimen signature - Removal of some documents previously filed separately; obligation to include information on the Ultimate Beneficial Owner (UBO) in the Memorandum and Articles of Association [the Articles of Association must contain details of the UBO of the company, as well as the affidavits of the Shareholders and the Directors that the legal requirements for membership/shareholder/Director status have been met and the express acceptance of the Director mandate has been given]
- Establishing a procedure whereby the Trade Registry (through the officer) will be able to order the dissolution and deregistration of the company in the limited cases, as follows:
- the conditions relating to the registered office are no longer met, following the expiry of the term of the document certifying the right of use of the space used as the registered office or the transfer of the right of use or ownership of the space used as the registered office
- the company has ceased trading or has not resumed trading after a period of temporary inactivity, notified to the tax authorities and entered in the Trade Register, which may not exceed three years from the date of entry in the Trade Register
- the duration of the company has been established as fixed, at the expiry of the duration mentioned in the memorandum of association, if the procedure for the extension of the duration of the company provided for in Article 227 (2) of the Companies Law is not fulfilled
Given the importance of these changes, it is advisable to carefully monitor the aspects leading to the declaration of the company as inactive by the tax authority as some of them, will lead to the dissolution and deregistration of the company ex officio by the Trade Register.
- Aggravated obligations placed on Directors [a fine of 5,000 lei to 15,000 lei (followed by dissolution of the company in the event of non-compliance within 30 days of the offence being detected) is established for failure by the directors to keep the company’s registers (register of members/shareholders, register of meetings of the general meeting, register of meetings of the board of directors, etc.)].
- Removal of the requirement to submit proof of name reservation and reduction of the validity period of the name reservation from 3 months to 1 month
Transitional rules
In its content, Law 265 provides that proceedings commenced before the entry into force of the Law remain subject to the law in force on that date. However, the provisions of Act 265 will apply immediately to the procedure for rectification of material errors in respect of resolutions of directors of the Trade Register ordered under the old rules.
After an overview of the new rules, it can be stated that the new Law on the Trade Register brings a welcome codification of the current rules, while modernizing the process of incorporation of entities subject to registration in the Trade Register by introducing electronic procedures and establishing clear duties for the Trade Register officers.
