1. Which law is applicable to the legal capacity and right of representation of a legal entity?
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According to Art.2568 of the Romanian Civil Code, national law is the law (....) of the State whose nationality the legal person has.
Article 2580 of the Romanian Civil Code provides that the organic status of the legal person is governed by its national law.
The organic status of the branch established by the legal person in another country is subject to its national law.
The organic status of the subsidiary is subject to the law of the State in whose territory it has its seat, irrespective of the law applicable to the legal entity that established it.
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Article 2580 of the Romanian Civil Code provides that the organic status of the legal person is governed by its national law.
The organic status of the branch established by the legal person in another country is subject to its national law.
The organic status of the subsidiary is subject to the law of the State in whose territory it has its seat, irrespective of the law applicable to the legal entity that established it.
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2. What criteria/rules are used to determine the applicable law (for example the law of incorporation or the actual seat)?
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According to Article 2571 of the Civil Code, the legal person has the nationality of the State on whose territory its registered office has been established, according to its constitutive act.
If there are offices in more than one State, the determining factor for identifying the nationality of the legal person is the real headquarters.
The real headquarters means the place where the principal centre of control and the management of the statutory activity is located, even if the decisions of that body are adopted in accordance with directives issued by shareholders or associates of other States.
However, if the foreign law thus determined refers to the law of the State under which the legal person was constituted, the law of the latter State shall apply.
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If there are offices in more than one State, the determining factor for identifying the nationality of the legal person is the real headquarters.
The real headquarters means the place where the principal centre of control and the management of the statutory activity is located, even if the decisions of that body are adopted in accordance with directives issued by shareholders or associates of other States.
However, if the foreign law thus determined refers to the law of the State under which the legal person was constituted, the law of the latter State shall apply.
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3. Which international conventions have to be respected?
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Romania did not ratify the Hague Convention of 1 June 1956 concerning the recognition of the legal personality of foreign companies, associations and institutions.
Romania is a party to the 1965 Convention on the settlement of investment disputes between States and nationals of other States (ratified by Romania by Decree No 62/1975.)
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Romania is a party to the 1965 Convention on the settlement of investment disputes between States and nationals of other States (ratified by Romania by Decree No 62/1975.)
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4. Are there international conventions with regard to certain countries?
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Yes.
For instance, certain bilateral conventions on mutual legal assistance contain references to legal persons. The bilateral Treaty between Romania and Hungary provides that the capacity of legal persons shall be determined according to the law of the State according to which they were established.
The Treaty for legal assistance between Romania and China states that its provision shall also apply to the legal persons that have been set up according to the laws of the State where they have their headquarters, unless otherwise provided for by domestic law.
Similar provisions are contained in the Treaty between Romania and Moldova.
Specific provisions may also be laid down in bilateral treaties for the promotion and protection of investments. For instance, according to the Treaty between Romania and the United Arab Emirates, if a legal person is registered or constituted under the law in force in the territory of a Contracting Party and if in that company, prior to the occurrence of the dispute, the majority of the shares are held by investors of the other Contracting Party, that legal person shall be treated, in accordance with Art. 25 (2) (b) of the Washington Convention, for the purposes of the Convention, as an investor of the other Contracting Party.
Similar provisions are contained in the Treaty between Romania and Bolivia.
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For instance, certain bilateral conventions on mutual legal assistance contain references to legal persons. The bilateral Treaty between Romania and Hungary provides that the capacity of legal persons shall be determined according to the law of the State according to which they were established.
The Treaty for legal assistance between Romania and China states that its provision shall also apply to the legal persons that have been set up according to the laws of the State where they have their headquarters, unless otherwise provided for by domestic law.
Similar provisions are contained in the Treaty between Romania and Moldova.
Specific provisions may also be laid down in bilateral treaties for the promotion and protection of investments. For instance, according to the Treaty between Romania and the United Arab Emirates, if a legal person is registered or constituted under the law in force in the territory of a Contracting Party and if in that company, prior to the occurrence of the dispute, the majority of the shares are held by investors of the other Contracting Party, that legal person shall be treated, in accordance with Art. 25 (2) (b) of the Washington Convention, for the purposes of the Convention, as an investor of the other Contracting Party.
Similar provisions are contained in the Treaty between Romania and Bolivia.
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5. Are all companies registered in a public register? What are the effects of registration? (please add a link to the register, if possible)
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All companies regulated by the Law No 31/1990 on companies are registered in the public register (The Trade Registry). The company acquires legal personality from the date of its registration with the trade register, unless otherwise provided by law.
Companies subject to registration, but not registered, are assimilated to the simple company regulated by the Romanian Civil Code (Article 1893). Therefore, these entities do not have legal personality. However, it should be noted that, according to Art. 205 paragraph (3) of the Civil Code, limited capacity is recognised for any legal entity in the course of its formation, which is confined to the purpose of creating that legal entity.
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Companies subject to registration, but not registered, are assimilated to the simple company regulated by the Romanian Civil Code (Article 1893). Therefore, these entities do not have legal personality. However, it should be noted that, according to Art. 205 paragraph (3) of the Civil Code, limited capacity is recognised for any legal entity in the course of its formation, which is confined to the purpose of creating that legal entity.
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6. Does a foreign company have to be registered in your public company register?
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No. Foreign companies may set up subsidiaries, branch offices, agencies, representations or other secondary offices in Romania, subject to Romanian law, if this right is recognised by the law of their organic status.
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7. Who has the legal right of representation of a legal entity?
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According to Article 209 of the Civil Code, the legal person exercises its rights and fulfils its obligations through its administration bodies, as of the date of their constitution. These administration bodies may be natural or legal persons who, by law, the articles of association or by-laws, are designated to act in relation to third parties, individually or collectively, in the name and on behalf of the legal person. Relations between the legal person and those who make up its administration are subject, by analogy, to the rules of the mandate, unless otherwise provided by law, the articles of association or the statute.
Certain particularities may be retained, depending on the type of legal person.
For instance, where companies are concerned, the right to administer the company also involves the right to enter legal relationships with third parties on behalf of the company, i.e. the right of representation. However, the right to represent the company does not automatically belong to all directors, but only to those who have been empowered with the prerogative of representation. In the case of general partnerships, limited partnerships and private limited companies, the right of representation belongs to every director, unless otherwise provided in the articles of incorporation.
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Certain particularities may be retained, depending on the type of legal person.
For instance, where companies are concerned, the right to administer the company also involves the right to enter legal relationships with third parties on behalf of the company, i.e. the right of representation. However, the right to represent the company does not automatically belong to all directors, but only to those who have been empowered with the prerogative of representation. In the case of general partnerships, limited partnerships and private limited companies, the right of representation belongs to every director, unless otherwise provided in the articles of incorporation.
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8. Must the right of representation be registered (if yes, please add a link to the register, if possible)?
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Yes. The right of legal representation must be registered, where applicable. For instance, where companies are concerned, the legal representatives of the company must be registered with the Trade Register.
When the company is set up, the directors will be mentioned in the articles of incorporation and registered in the Trade Register. Changes of directors will also be subject to registration.
The list of necessary documents for the registration with the Trade register, tax registration and authorisation of general partnerships, limited partnerships and private limited companies can be found by following this link:
https://www.onrc.ro/index.php/en/inmatriculari-2/persoane-juridice-2/nume-colectiv-2
The list of documents required for registration with the Trade register, tax registration and authorisation of public limited companies and partnerships limited by shares can be found by following this link:
https://www.onrc.ro/index.php/en/inmatriculari-2/persoane-juridice-2/societati-comerciale-pe-actiuni-si-in-comandita-2
For amendment in administration:
https://www.onrc.ro/index.php/en/mentiuni-2/persoane-juridice-2/schimbarea-membrilor-organelor-de-conducere-si-de-control-2
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When the company is set up, the directors will be mentioned in the articles of incorporation and registered in the Trade Register. Changes of directors will also be subject to registration.
The list of necessary documents for the registration with the Trade register, tax registration and authorisation of general partnerships, limited partnerships and private limited companies can be found by following this link:
https://www.onrc.ro/index.php/en/inmatriculari-2/persoane-juridice-2/nume-colectiv-2
The list of documents required for registration with the Trade register, tax registration and authorisation of public limited companies and partnerships limited by shares can be found by following this link:
https://www.onrc.ro/index.php/en/inmatriculari-2/persoane-juridice-2/societati-comerciale-pe-actiuni-si-in-comandita-2
For amendment in administration:
https://www.onrc.ro/index.php/en/mentiuni-2/persoane-juridice-2/schimbarea-membrilor-organelor-de-conducere-si-de-control-2
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9. If the right of representation must be registered, what legal effect does the registration have with respect to third parties?
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Registration is performed for the purpose of third-party effectiveness.
If a right, act or fact has been recorded in a public register, it is presumed to exist, while it has not been radiated or modified under the law.
According to Article 218 of the Romanian Civil Code, in relations with third parties, the legal person is bound by the acts of its bodies, even if these acts exceed the power of representation conferred by the articles of incorporation or statute, unless it is proven that the third parties were aware of this at the date of conclusion of the act. The mere publication of the articles of incorporation or statute of the legal person does not constitute proof of knowledge of this fact.
According to Article 54 of the Company Law No 31/1990, after the publication formalities have been performed concerning the persons who, as statutory bodies of the company, are authorised to represent it, the company cannot claim against third parties any irregularity regarding their appointment, unless the company demonstrates that the third parties were aware of the irregularity. The company may not invoke against third parties the appointment or the termination of the appointment, if they have not been published in accordance with the law.
According to Article 55 of the Company Law No 31/1990, in the relations with third parties, the company is bound by the acts of its bodies, even if these acts exceed the object of the activity, unless it is proven that the third parties knew or, in the circumstances, should have known this fact or when the acts so concluded exceed the limits of the powers provided for by law for the respective bodies. Publishing the constitutive act cannot alone be proof of knowledge.
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If a right, act or fact has been recorded in a public register, it is presumed to exist, while it has not been radiated or modified under the law.
According to Article 218 of the Romanian Civil Code, in relations with third parties, the legal person is bound by the acts of its bodies, even if these acts exceed the power of representation conferred by the articles of incorporation or statute, unless it is proven that the third parties were aware of this at the date of conclusion of the act. The mere publication of the articles of incorporation or statute of the legal person does not constitute proof of knowledge of this fact.
According to Article 54 of the Company Law No 31/1990, after the publication formalities have been performed concerning the persons who, as statutory bodies of the company, are authorised to represent it, the company cannot claim against third parties any irregularity regarding their appointment, unless the company demonstrates that the third parties were aware of the irregularity. The company may not invoke against third parties the appointment or the termination of the appointment, if they have not been published in accordance with the law.
According to Article 55 of the Company Law No 31/1990, in the relations with third parties, the company is bound by the acts of its bodies, even if these acts exceed the object of the activity, unless it is proven that the third parties knew or, in the circumstances, should have known this fact or when the acts so concluded exceed the limits of the powers provided for by law for the respective bodies. Publishing the constitutive act cannot alone be proof of knowledge.
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10. May the rights of the legal representative be restricted? If yes, please explain how (e.g. by laws or the articles of association)?
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As a rule, yes. However, according to Article 218 of the Civil Code, the provisions of the articles of incorporation or statute, as well as the decisions of the statutory bodies of the legal person limiting or extending the powers conferred expressly by law on these bodies, are considered as unwritten, even if they have been published. For instance, referring to the powers of the director, there are situations where the law either provides fixed powers, or makes the validity of a certain act subject to prior approval by a statutory body. The purpose of these limitations is to prevent the legal person from granting these competences conferred by law on a certain statutory body to another, usually inferior, statutory body.
According to Article 55 of the Company Law No 31/1990, the terms of the articles of association or the decisions of the statutory bodies of the companies, which limit the powers conferred on them by law, are not effective against third parties, even if they have been published.
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According to Article 55 of the Company Law No 31/1990, the terms of the articles of association or the decisions of the statutory bodies of the companies, which limit the powers conferred on them by law, are not effective against third parties, even if they have been published.
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11. Does that restriction have any legal effect towards third persons?
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Please see question 10.
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12. How can the representative prove the right of representation (e.g. extract in paper from the registry certified by some authorities, extract from public registry)?
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Where the legal person is subject to registration, proof of the legal powers of representation may be obtained from the relevant register.
In the case of non-profit legal entities (such as associations, foundations and federations), appropriate evidence may be obtained from the National Register of Legal Entities without Patrimonial Purpose kept by the Ministry of Justice or from the registers kept locally at each district court – for associations and foundations) or tribunal (for federations).
For companies (joint-stock companies, limited partnerships, limited liability companies) proof of the status of management body (i.e. director) is made by presenting a valid certificate issued by the Office of the Trade Register.
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In the case of non-profit legal entities (such as associations, foundations and federations), appropriate evidence may be obtained from the National Register of Legal Entities without Patrimonial Purpose kept by the Ministry of Justice or from the registers kept locally at each district court – for associations and foundations) or tribunal (for federations).
For companies (joint-stock companies, limited partnerships, limited liability companies) proof of the status of management body (i.e. director) is made by presenting a valid certificate issued by the Office of the Trade Register.
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13. Are there any circumstances where the transactions entered into by the legal representative of a company are considered not binding on the company (e.g. for a valid transaction should there be a decision or consent of the shareholders, supervisory body)? If yes, please explain.
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Yes. For instance, where such transactions entered into by the representative of a company exceed the limit of the powers granted by law to such representative or when it is proved that the third parties knew or, according to the circumstances, should have known that the transaction exceeded the object of activity of a company.
According to Article 1914 of the Romanian Civil Code, the director, in the absence of opposition from the associates, may perform any act of administration in the company’s interest.
According to Article 70 of the Company Law, the directors may perform all operations required to carry out the company's business, according to its object of activity, with the exceptions enshrined in the articles of incorporation.
Certain acts may only be entered into with the approval of the general meeting of associates.
Notwithstanding the general legal provisions, certain special rules are provided for by the Law No 31/1990 on companies.
For instance, according to Article 441 of the Company Law, the acquisition by the company, within a maximum of 2 years from the incorporation or the authorisation of the commencement of the company’s activity, of an asset from a founder or shareholder, for a sum or other countervalue representing at least one tenth of the capital value subscribed social security, shall be subject to the prior approval of the general meeting of shareholders, will be mentioned in the Trade Register and will be published in the Official Gazette of Romania, Part IV, and in a widely disseminated newspaper.
These provisions shall not apply to acquisitions made in the ordinary course of the company’s business, those made by order of an administrative or judicial authority or those made in connection with stock exchange operations.
Regarding joint stock companies (partnerships limited by shares), Article 150 states that, unless otherwise provided in the Articles of Incorporation and subject to the provisions of Art. 441, under the sanction of nullity, the director will be able, in his own name, to acquire or sell goods to or from the company, of a value exceeding 10% of the company’s net assets, only after the approval of the extraordinary general meeting. These provisions also apply to operations in which one of the parties is the director’s spouse or a relative or an in-law, up to and including the fourth degree; also if the transaction is concluded with a civil or commercial company in which one of the aforementioned persons is a manager or director or holds, alone or together with others, a share of at least 20% of the amount of the subscribed share capital, unless one of the respective companies is the subsidiary of the other.
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According to Article 1914 of the Romanian Civil Code, the director, in the absence of opposition from the associates, may perform any act of administration in the company’s interest.
According to Article 70 of the Company Law, the directors may perform all operations required to carry out the company's business, according to its object of activity, with the exceptions enshrined in the articles of incorporation.
Certain acts may only be entered into with the approval of the general meeting of associates.
Notwithstanding the general legal provisions, certain special rules are provided for by the Law No 31/1990 on companies.
For instance, according to Article 441 of the Company Law, the acquisition by the company, within a maximum of 2 years from the incorporation or the authorisation of the commencement of the company’s activity, of an asset from a founder or shareholder, for a sum or other countervalue representing at least one tenth of the capital value subscribed social security, shall be subject to the prior approval of the general meeting of shareholders, will be mentioned in the Trade Register and will be published in the Official Gazette of Romania, Part IV, and in a widely disseminated newspaper.
These provisions shall not apply to acquisitions made in the ordinary course of the company’s business, those made by order of an administrative or judicial authority or those made in connection with stock exchange operations.
Regarding joint stock companies (partnerships limited by shares), Article 150 states that, unless otherwise provided in the Articles of Incorporation and subject to the provisions of Art. 441, under the sanction of nullity, the director will be able, in his own name, to acquire or sell goods to or from the company, of a value exceeding 10% of the company’s net assets, only after the approval of the extraordinary general meeting. These provisions also apply to operations in which one of the parties is the director’s spouse or a relative or an in-law, up to and including the fourth degree; also if the transaction is concluded with a civil or commercial company in which one of the aforementioned persons is a manager or director or holds, alone or together with others, a share of at least 20% of the amount of the subscribed share capital, unless one of the respective companies is the subsidiary of the other.
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14. Is it possible to verify the right of representation by digital means from the register? Please indicate the source and in which language the inquiries should be conducted.
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Yes.
For companies, certificates from the Trade Registry may also be obtained online. If these certificates are acquired through the InfoCert service, they are subject to the provisions of Law No 455/2001 regarding the electronic signature (with subsequent amendments and additions) and the provisions of Law No 451/2004 on the temporal mark (with subsequent amendments and additions) and contain a Qualified Electronic Signature which ensures authenticity, integrity, non-repudiation (certainty that it was issued by the ONRC), the confidentiality of the document, and is attached to the data in electronic form to which it relates, so that any subsequent modification is identifiable.
Information on certificates that are issued by the Trade Registry, including information on certificates obtained through the InfoCert service, can be found at the link below:
https://www.onrc.ro/index.php/en/informatii-2/certificate-constatatoare
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For companies, certificates from the Trade Registry may also be obtained online. If these certificates are acquired through the InfoCert service, they are subject to the provisions of Law No 455/2001 regarding the electronic signature (with subsequent amendments and additions) and the provisions of Law No 451/2004 on the temporal mark (with subsequent amendments and additions) and contain a Qualified Electronic Signature which ensures authenticity, integrity, non-repudiation (certainty that it was issued by the ONRC), the confidentiality of the document, and is attached to the data in electronic form to which it relates, so that any subsequent modification is identifiable.
Information on certificates that are issued by the Trade Registry, including information on certificates obtained through the InfoCert service, can be found at the link below:
https://www.onrc.ro/index.php/en/informatii-2/certificate-constatatoare
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15. When anti-money laundering measures are applied, how are the beneficial owners of a legal entity registered in your country identified? Would there be different possibilities for professionals from other countries to identify the beneficial owners? Please indicate the source and in which language the inquiries should be conducted.
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Yes.
According to a recent transposition of European standards in this field into national legislation, legal persons governed by private law and trusts registered in Romania are obliged to obtain and have at their disposal adequate, correct and up-to-date information on their beneficial owner and to make it available to the control bodies and supervisory authorities upon request.
Information regarding beneficial owners will be recorded:
- in a central register organised at the level of the National Office of the Trade Register for legal persons who are obliged to register in the trade register, except for autonomous public service undertakings (regie autonomă) and national companies;
- in a central register organised at the level of the Ministry of Justice for associations and foundations;
- in a central register organised at the level of the National Tax Administration Agency in the case of trusts.
The organisation and functioning of these resisters will be regulated by acts issued by the managing authority.
Legal persons governed by private law and the trusts registered in the territory of Romania are obliged to obtain and hold adequate, correct and up-to-date information on their beneficial owner, including on the way in which this quality materialises, and make it available to the bodies and supervisory authorities on request.
(2) Legal entities and trusts disclose their status and provide the reporting entities with the information provided in par. (1) and Art. 4 paragraph (2) when, in their capacity as trustees, they establish a business relationship or carry out an occasional transaction whose value exceeds the thresholds provided in Art. 13 paragraph (1) lit. b) and para. (2).
(3) Legal persons and trustees registered in the territory of Romania have the obligation to provide reporting entities, in a timely manner, in addition to the information on beneficial owner, with information on the beneficial owner, when reporting entities apply the ‘know-your-customer’ measures.
(4) Reporting entities shall keep documented records of the measures taken to identify beneficial owners according to the provisions of the law.
(5) The information provided in par. (1) shall be registered:
- in a central register organised at the level of the National Office of the Trade Register for legal persons who are obliged to register in the trade register, except for the autonomous regions, companies and national companies;
- in a central register organised at the level of the Ministry of Justice for associations and foundations;
- in a central register organised at the level of the National Tax Administration Agency in the case of trusts.
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According to a recent transposition of European standards in this field into national legislation, legal persons governed by private law and trusts registered in Romania are obliged to obtain and have at their disposal adequate, correct and up-to-date information on their beneficial owner and to make it available to the control bodies and supervisory authorities upon request.
Information regarding beneficial owners will be recorded:
- in a central register organised at the level of the National Office of the Trade Register for legal persons who are obliged to register in the trade register, except for autonomous public service undertakings (regie autonomă) and national companies;
- in a central register organised at the level of the Ministry of Justice for associations and foundations;
- in a central register organised at the level of the National Tax Administration Agency in the case of trusts.
The organisation and functioning of these resisters will be regulated by acts issued by the managing authority.
Legal persons governed by private law and the trusts registered in the territory of Romania are obliged to obtain and hold adequate, correct and up-to-date information on their beneficial owner, including on the way in which this quality materialises, and make it available to the bodies and supervisory authorities on request.
(2) Legal entities and trusts disclose their status and provide the reporting entities with the information provided in par. (1) and Art. 4 paragraph (2) when, in their capacity as trustees, they establish a business relationship or carry out an occasional transaction whose value exceeds the thresholds provided in Art. 13 paragraph (1) lit. b) and para. (2).
(3) Legal persons and trustees registered in the territory of Romania have the obligation to provide reporting entities, in a timely manner, in addition to the information on beneficial owner, with information on the beneficial owner, when reporting entities apply the ‘know-your-customer’ measures.
(4) Reporting entities shall keep documented records of the measures taken to identify beneficial owners according to the provisions of the law.
(5) The information provided in par. (1) shall be registered:
- in a central register organised at the level of the National Office of the Trade Register for legal persons who are obliged to register in the trade register, except for the autonomous regions, companies and national companies;
- in a central register organised at the level of the Ministry of Justice for associations and foundations;
- in a central register organised at the level of the National Tax Administration Agency in the case of trusts.
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