Dissolving a Romanian Company

There are several legal ways through which a Romanian company can be dissolved. Our team of lawyers in Romania can provide an extensive presentation on what you should expect during this stage. You should also know that our team can offer legal representation when dissolving your business, which can be done through the following:

exceeding the limited timeframe for which the company had been initially incorporated for;
the impossibility of fulfilling the company’s object of activity;
declaring annulment of the company or through a Decision of the General Shareholder Assembly;
decision of tribunals, on the request of each associate for well-founded reasons as well as conflicts between associates resulting in cease of company’s activity;
company’s bankruptcy and other reasons stipulated by law or by the articles of association.

The process of dissolving a company will be continued by the liquidation procedure. Still, it must be noted that dissolving a company may not be followed by the process of liquidation, but this can be done only in certain situations. This procedure has to be registered with the Trade Register, and later on, be published in the Official Monitor.

You should know that the publication of the papers in the Official Monitor implies the payment of the fee, charged per each page of the documents that need to be published in accordance with the requirements of the law. Our Romanian lawyers can offer information on the current fee system charged by the institution.

Table of Contents

What is the law regulating company liquidation in Romania?

There are more rules of law which regulate the manner in which one can close a company in Romania. The legislation available regulates various procedures based on the nature of the entity, its situation (such as bankruptcy), etc.

The main rule of law applicable here is Law no. 31/1990, which provides the legal framework under which companies can be dissolved, and it also stipulates to what types of entities it applies to (such as the limited liability company).

Therefore, if you have set up a company in Romania as a limited liability company, you will need to follow the rules prescribed by Law no. 31/1990 if you need to liquidate the business. Those who have formed an economic interest group must follow the rules of Law no. 161/2003. Our attorneys in Romania can offer in-depth assistance on the liquidation formalities applicable in this case.

The documentation that must be prepared in order to close a company in Romania is subjected to Law no. 265/2022 (the legislation refers to the activity of the Trade Registry and the documents the institutions must request in order to conduct registration and/or deregistration operations).

Romania also provides a legislation concerning the prevention of insolvency and the procedures that can be initiated against insolvency proceedings. These derive from Law no. 85/2014 and the law can apply to businessmen and natural persons as well.

Businessmen are defined under the definition of the Article 3(2) of the Romanian Civil Code. As mentioned above, the law applies to natural persons, but only as long as the debts of the individuals are considered professional debts, therefore, also business-related. This can be the case of those who open a business in Romania as doctors, lawyers, etc.

For personal debts of an individual, the rules of the Law no. 151/2015 apply, according to the European Justice portal. Personal debt can appear in many cases and it can cover any situation concerning the personal assets of an individual (for instance, it can appear for those who buy a property in Romania for personal usage).

What is the dissolving procedure with the Romanian Trade Register?

The Trade Registry procedure is formed of 3 steps, which can be detailed by our team of Romanian lawyers. Here, you can see the basic aspects you should follow in this case. The first step is to file a number of requested documents (Shareholder Decision, official request).

The next step is filing a second set of documents (documents from appointed liquidators) and payment of taxes, which will be followed by filing a third set of documents (the request to dissolve the company, the financial situation for liquidation, the Certificate of Registration, the Fiscal Certificate etc).

In certain cases, the shareholders of SRL companies (limited liability companies) are able to decide – at the time of dissolving the company – upon the liquidation method of the company. This can happen when agreeing upon the assignment and liquidation of the company’s patrimony and when insuring payment of debt to potential creditors.

On the date the judge’s decision is taken to dissolve the company, the entity enters liquidation, per the provisions of the law and a liquidator has to be either hired by the company or appointed by the judge. Any remaining assets of the dissolved company shall be assigned to the shareholders. You can always address to our Romanian law firm for legal representation in this procedure.

Shareholders’ decision for winding up a company in Romania

Those who want to dissolve their company will follow one of the options presented at the beginning of the article. The procedure will also be influenced on whether the company has debts or not.

It is understandable that in the case in which the company does not have any debts, the process of dissolving the legal entity will be much simpler. The same applies if the company’s members agree upon the dissolution of the company.

When debts are involved and when the associates have different opinions with regards to the direction in which the company should be oriented (opposed to dissolution), then the procedure will be much more complex. Our team of Romanian lawyers can guide you throughout the entire process, which can be highly influenced by the value of the debt the company has.

Please mind that in this situation, when the debt is very high, the sole option available for the investors is to go through the insolvency procedure. When the associates do not agree with the idea of the dissolution of the company or do not agree with the terms that will be applied in this case, then the only option they have is to address their case to a local court.

In order to consider that the associates agree on the termination of the company, a majority vote has to be taken, which represents 50% of all the company’s shareholders plus one shareholder.

This is the consensus with regard to this process, but it is necessary to verify the stipulations of the company’s articles of associations, as different rules may be expressed. In this sense, we highly advise you address to our Romanian lawyers.

A company can be dissolved when it is represented by a single shareholder as well. However, this procedure is much simpler, as the decision and the approval of the company liquidation in Romania has to be taken by the said shareholder.

How many businesses were unable to pay their debts in Romania?

The number of businesses which have to be dissolved and liquidated in Romania varies from one year to another due to various reasons, same as it does when referring to the registration of new legal entities.

The decision for the latter is influenced by the new tax policies adopted by the government, the incentives businesses can obtain, the economic situation of specific business sectors and so on. When referring to insolvencies and/or winding up a company in Romania, the latest statistics provided by the National Trade Registry Office show the following data:

in 2021, there were a total of 6114 insolvencies at a national level;
in 2021, Bucharest, the country’s largest city, accounted for the largest number of insolvencies, 1107, followed by Cluj, with 492 insolvencies;
in 2022, the total number of insolvencies slightly increased to 6649, accounting for a 8.22% increase from the previous year (the yearly measurement follows the calendar year – 1st January to 31st December);
in 2023, insolvency was maintained at the same level of 2022, as the institution registered a total of 6650, with just 1 case above the statistics of 2022 (an increase of 0.02%);
the latest statistics, covering the period of 1st January 2024 to 30th April 2024, show a total of 2526 insolvencies.

Our team is prepared to provide you with tailored advice suitable for the characteristics of your situation (company debts, number of shareholders, legal entity, the need to start the insolvency procedure, the need to address to a court and so on). For more details on the process of dissolving a Romanian company, we invite you to contact our law fir in Romania for legal representation.