Simplifying (but not much) the process of setting up a limited liability (SRL) company in Romania
The legal entities are no longer obliged to prove to the Trade Registry the payment of the share capital, at the moment of incorporation of a limited liability company.
By Ana Petrescu, Associate, ONV LAW, firstname.lastname@example.org
How many of the entrepreneurs know that the Companies Law no. 31/1990 was amended at the end of 2020? According to the latest amendments, the entrepreneurs who set up a limited liability company are no longer obliged to prove the payment of the share capital to the Trade Registry within the process of incorporation, which is mostly done by opening a share capital bank account.
What does the amendment actually mean?
In practice, things have not changed much, the only benefit being the removal of a document (proof of payment issued by the bank) from the list of documents to be submitted to the Trade Register for company incorporation, a document that did not create so many barriers in setting up a limited liability company.
However, the Companies Law no. 31/1990 still regulates the shareholders` obligation to fully pay the subscribed share capital, at the date of the incorporation of the limited liability company. In other words, the limited liability companies (SRL) are still obliged to open the share capital bank account and to pay the subscribed share capital, followed by the conversion of the share capital bank account into a current one, so as the company to be considered legally incorporated.
Considering the purpose pursued by the amendment of the Companies Law no. 31/1990, it could be concluded that the legislator`s intention was to remove an additional ride to the bank in order to open the share capital bank account.
Although the intention of the legislator was to de-bureaucratize the incorporation of a limited liability company, the legislator was not consistent in the amendments implemented on the law – more precisely, has removed the proof of payment of the share capital from the list of the documents necessary to be submitted with the Trade Registry for a limited liability company’s incorporation, but did not also remove the obligation of the shareholders of a limited liability company to have the full payment of the subscribed share capital of the company at the moment of its incorporation.
We analysed the explanatory memorandum of the legislative bill which has become Law no. 223/2020 for the simplification and de-bureaucratization of the transfer of shares and the payment of the share capital by amending the Companies Law no. 31/1990 and we noted that in the first draft of the legislative bill was envisaged including the removal of the limited liability companies obligation to have the share capital fully paid at the moment of incorporation. However, until the draft of the legislative bill was sent to the President of Romania for promulgation, this proposed amendment was removed from the draft and the law was adopted only with the amendment related to the removal of the proof of payment from the list of documents that shall be submitted to the Trade Registry for a limited liability’s incorporation, as presented above.
A working option
Our proposal is to return to the proposal that existed in the initial draft of the legislative bill and to also amend Article 9 of the Companies Law no. 31/1990, in the way that the limited liability companies should no longer be obliged to have the share capital paid in full at the incorporation – all the more so as the share capital can have the value of RON 1, according to the latest amendments.
What are the risks if you do not comply with this legal requirement?
According to the Companies Law no. 31/1990, the noncompliance with the legal provisions related to the minimum share capital, subscribed and paid, represents a cause of absolute nullity of the company, which can be invoked by any person who would justify an interest. Thus, if, after the incorporation of the limited liability company it would be found that its shareholders did not fully pay the share capital by opening a share capital bank account until the incorporation is registered with the Trade Registry, any person who would justify an interest could request in court the annulment of the company in question.