What does the liquidation procedure of a Romanian company imply and what are the causes leading to it under the provisions of the Romanian legislation on this matter?
Company liquidation in Romania is the second stage in the process of striking off a legal entity, and it is a consequence of the dissolution of the company.
These liquidation-specific operations include identifying the assets and converting them into cash, determining the liabilities, paying off debts to creditors, and sharing the results of the liquidation among associates. When this step is required, our lawyers in Romania can assist investors throughout the liquidation.
| Quick Facts | |
|---|---|
| Voluntary company dissolution | When the company expires, it meets its object of activity, or when a decision is made in this regard by the company shareholders. |
|
Mandatory dissolution upon company duration expiration date |
The administrators must consult the shareholders at least 3 months before the expiry date to decide if the company’s activities will continue. |
|
Compulsory company dissolution |
Can be ordered by court |
| Special publications for court dissolution | Published in the Official Gazette |
| Reasons to order the court dissolution |
Disagreements between the partners that make it impossible for the company to continue its activities, bankruptcy, etc. |
| Liquidation after company dissolution resolution |
Yes, liquidation follows the decision to dissolve the company |
| Liquidator |
Commonly appointed to handle the liquidation procedures. |
| Liquidator appointment in Romania |
Appointed by the shareholders/company members |
| Liquidator’s duties |
– determine the company’s assets; – pay the creditors; – divide any remaining assets among the company’s members. |
| Exemptions from using a liquidator | When the partners agree on the division of assets. Our Romanian lawyers can give you more details. |
| Company activities during liquidation in Romania |
Only those related to the liquidation process. |
| Liquidation stages |
Register the liquidation application, and the other documents, as well as following through with the steps needed to sort any company liabilities. |
| Request to de-register the company post-liquidation |
Within the term prescribed by law. |
| Company dissolution without liquidation |
In certain cases, according to an agreement made by the members to resolve the liabilities and distribute any remaining assets. |
| Approximate liquidation process duration | 60 days or more in some cases. |
Therefore, the causes leading to the entry of a company into the liquidation stage are the same causes that lead to the dissolution of the company. These reasons may be issues such as:
- reaching the term set for its operation;
- the impossibility of achieving the object of the company or its achievement thereof;
- the declaration of nullity of the society, the General Assembly’s decision;
- the judgment of the court, at the request of any partner, for good reasons, such as serious disagreements between members, which impede the functioning of society;
- the bankruptcy of the company or other causes provided by law or by the articles of association of the company.
All documents issued by the company must state that the legal entity is in liquidation.
Typically, the company’s liquidation begins to unfold in the first round by the appointment of liquidators within 30 days of its dissolution, the intervention of the court at this stage having an exceptional character. Entrepreneurs who need advice before the liquidators are appointed can reach out to our Romanian lawyers.
What rights and obligations do liquidators have and who may become a liquidator in this procedure at a company in Romania?
Liquidators may be natural or legal persons. Liquidators, individuals or permanent representatives – individuals of the society found in liquidating – must be authorized by law.
Liquidators have the same responsibility as administrators or members of the directorate. Our lawyers in Romania can provide more details about the powers of the liquidator.
Liquidators are bound, soon after taking office, along with the administrators and directors, to make an inventory and conclude a balance sheet to ascertain the exact status of assets and liabilities of the company, and to sign them.
The liquidators are obliged to receive and keep the Company’s assets, records that were committed to them by the administrators or members of the Executive Board, as well as company documents, requiring them to keep a record of the company’s operations.
Liquidators fulfill their mandate under the supervision of censors. However, in the case of joint stock companies that are organized in the two-tier system, liquidators fulfill their mandate under the supervision of the supervisory board.
An attribution of major importance of the liquidators prescribed by law No. 31/1990 on companies is that they can sit in judgment on behalf of the society. Our Romanian lawyers can provide more details.
Does the liquidation procedure occur naturally in all cases in which the dissolution phase of the company has already been undertaken?
The liquidation of the company after it was dissolved is generally mandatory. However, Law no. 31/1990 regarding companies sets out that liquidation can be avoided if, in case of dissolution by the decision of the company’s members, they change their mind on the decision with the majority required to amend the articles of incorporation, as long as there was no division of active. Our attorneys in Romania can assist if this is the case.
Also, the liquidation does not exist in the case of a merger or the division of the company concerned.
Does a company under liquidation have a legal personality?
Yes, in the stage of liquidation, the company continues to have a legal personality, but only for the necessary aspects of the liquidation. As stated in the Romanian law no. 31/1990 regarding companies, the company retains its legal personality for liquidation operations until its completion.
Is there a certain period designated for completing the process of liquidation of a company under the laws of Romania?
Yes, the liquidation must be completed within one year from the date of dissolution, but this period may be extended under certain conditions. If this occurs, the experts at our law firm in Romania can assist during its entire duration.
Within 15 days of the completion of the liquidation, the liquidators will submit to the Trade Register a request for the delisting of the company from the trade register. If within 3 months after the expiry of one year from the completion of dissolution, extended by the court as appropriate, the Trade Register Office was not notified of any request for cancellation or no request for the appointment of the liquidator, the company is removed from the Trade Register.
We invite you to watch a short video about the process:
Additional information about company liquidation in Romania
The liquidation process can be understood as the phase during which the appointed liquidator oversees that the company pays its debts to creditors and distributes any remaining assets between its shareholders. However, the process of winding up a company in Romania is completed when the legal entity is struck off the National Trade Register.
Business owners who would like to close a company in Romania will also need to register a set of documents with the authorities. For this purpose, they will submit the deregistration of the business, after the simultaneous dissolution and liquidation of the company. The following documents are submitted to the National Trade Register Office:
- the application for deregistration (deleting the company);
- the associate’s/member’s decision to perform the simultaneous dissolution and liquidation of the company;
- proof of the agreement with the creditors indicating the fact that the company observed its liabilities (that the debts were resolved);
- proof of any needed authorizations from the Romanian authorities that the dissolution and liquidation can proceed/that the company can be deleted from the register;
- proof of appointing the liquidator;
- payment proof for the fees required to publish the decision to strike off the company.
Our Romanian lawyers list some of the tariffs that apply for publishing the winding up of a company in Romania in the Official Gazette:
- 128 lei/page for publishing the documents provided for by the Companies Law no. 31/1990, republished, with its subsequent changes and additions.
Statistics on company dissolution in Romania
Our lawyers in Romania present a set of statistical data concerning company dissolutions, followed by the number of companies that were recently struck off the registrar:
- 800 companies were dissolved in Bucharest in January 2024;
- this is a 17.47% increase compared to the same month a year prior;
- 1.376 companies were struck off in January 2024; this marks a significant increase, compared to the same month a year prior;
- 277 companies were suspended in Bucharest in January 2024, compared to 212 business entities that were suspended in the capital city in January 2023.
If you would like to know more about company liquidation in Romania, the procedure for dissolving and striking off a legal entity, or the option to suspend a company, please reach out to the experts at our law firm in Romania.
In addition to the services we provide to business owners who wish to start a business or close a company in Romania, we also offer legal solutions to individuals. Part of our activities focus on divorce in Romania, however, we can also help foreigners interested in buying property in Romania.
Commercial law is an important part of the activity of the Darie, Manea & Associates law firm. The liquidation procedure and the dissolution of a company in accordance with the laws of Romania are complex phases of the termination of the legal personality of the company. Our lawyers in Romania offer specialized legal assistance, explaining exactly what this stage implies in the life of your company, as well as the consequences arising therefrom, guaranteeing representation before all the competent authorities. Do not hesitate to contact us for more information on this issue!