Romania: New law on debureaucratising functioning of companies enters into force
Law 223/2020, which came into effect on 5 November 2020, has introduced a series of important changes to the Companies Law 31/1990.
Announced in Summer 2020 (for further details please see "New steps towards debureaucratising functioning of companies"), some of these legal amendments have been long awaited by the Romanian business ecosystem and will reduce some of the legal hurdles faced by investors in Romania. This article summarises the most important changes that Law 223/2020 has introduced.
Faster transfer of shares in LLCs
Law 223/202 has eliminated, in the case of limited liability companies (LLCs), creditors' 30-day opposition period with regard to the transfer of shares to third parties. Thus, the transfer of shares in an LLC to third parties can now be carried out within any timeframe conventionally set by the parties involved in the transfer, without needing to wait for the 30-day opposition period to pass or the final ruling on a possible opposition claim.
Further, pursuant to Law 223/2020, an LLC's shareholders may now decide in the articles of association to derogate from the rule set out by the Companies Law, whereby the transfer of shares to third parties in LLCs is allowed only if it has been approved by shareholders representing at least three-quarters of the company's share capital.
Law 223/202 has also removed the possibility of creditors (who make an opposition claim against a shareholders' resolution amending an LLC's articles of association) to request the suspension of the challenged resolution's effects.
Elimination of minimum share capital threshold
Law 223/202 has eliminated the minimum share capital threshold of Lei200 (approximately €41) for LLCs and the minimum nominal value for an LLC share of Lei10 (approximately €2). Thus, LLCs no longer have a minimum threshold requirement for their share capital and the nominal value of a share. Moreover, the full payment of share capital when establishing an LCC is no longer mandatory.
It appears that the goal of these provisions is to further simplify the legal requirements for setting up and operating LLCs so that they become more attractive to investors seeking to carry out business in Romania.
This article was first published in International Law Office.