There are no general regulations for you on how to invest money in case you want to set up a company in Romania. Still, you have to know that there are some types of companies in Romania that are more practical in terms of fiscality. This is why if you want to create a company in Romania you need to know which types of companies are those that are more preferable, those who require a special permit and so on.
The registration procedure is quite simple and does not require a lot of time, just the fulfillment of certain legal formalities such as registration with the Trade Registry of Romania and Fiscal Administration. The simple part is that registration with Fiscal Administration is done automatically by the Trade Register after filling the company’s Articles of Association with the Trade Register. From the date of this registration in the Trade Register, the company will acquire legal personality and can, therefore, start its economic activity.
According to the Law nr.31/1990 the Romanian law establishes 5 types of companies you can develop in Romania:
1. The Romanian Limited Liability Company
The Romanian Limited Liability Company is known as Societate cu Răspundere Limitată (SRL). Is the favorite type of company preferred by foreign investors as well as local entrepreneurs. Its main characteristics are the following:
- 200 lei- the minimum share capital;
- A person can be the only shareholder just in one Limited liability company;
- The associates are only held responsible for their share capital and they cannot seek their personal goods for covering the debts of the company, they can only seek their social shares;
- It takes just one week to set up such a company.
2. The Joint Stock Company
The Joint Stock Company is considered to be the most complex type of company as a general rule and in Romania as well. It is a good choice if you want to commence a big business. The main characteristics of this type of company are:
- The associates are held responsible only for social capital;
- This entity needs to have at least 2 stockholders;
- 000 lei- the minimum shared capital or around 19000 Euros;
- The most important decision and deliberation body of the company is
General Assembly of all stockholders; - The company can be listed on the stock market, and it can attract large amounts of money for expansion;
- The shares can be transferred without the approval of the other shareholders.
3. The Collective- Name Company
The Collective- Name Company is not a very common type of entity you will find here. It’s based on total trust among the shareholders.
Its requirements are:
- There should be at least 2 shareholders;
- The share capital is divided in interests which can not be transmitted to others;
- There is no minimum amount of shared capital. The company’s obligations are guaranteed by the company’s assets but also by the joint and unlimited liability of the company;
- The shareholders are personally liable for the obligations of the company. In case the company can not pay its debts, the shareholders will cover the debts.
4.The Sleeping Partnership Company
Like the previous type of company, the sleeping partnership company is not a very common choice of those who start a business.
- There are two types of shareholders: those that are personally liable for the obligations of the company and the shareholders that are only liable in the amount of the shared capital that they subscribe;
- The shared capital is formed of interests that are not represented by titles;
- For existing this company needs at least one person called shareholder that is liable for the obligations of the company and one that is liable only in the amount of the share capital. The law does not regulate the maximum number of shareholders;
- The interests can be transmitted only if the Articles of Incorporation allow this operation or is the other shareholders agree.
5. The Partnership Limited by Shares Company
There is no doubt that this is not a common type of companies you’ll find in Romania because of the many limitations it has. Due to its characteristics, this type of company is pretty peculiar to the Sleeping Partnership company.
- It has two types of shareholder: those with liability. But this liability is different. Shareholders are personally liable for the obligations of the company and there are shareholders that are liable only in the amount that they participate in the shared capital;
- 000 lei is the minimum amount of the share capital, around 19000 Euros;
- Only shareholders that are personally liable for the company’s obligations can administrate the company.
If you want to start a business in Romania is mandatory for you to read at least this article. Depending on how much money you have to invest in the company, what type of division of liability and administration is preferable for you and how quickly you want to run the company- you will find the right and suitable option for you. If you meet problems in this process and you need advice from specialists in the field then HammondPartnership is here. With decades of experience in Romanian law, they will find how to deal with your problem in the best way.
