The Law no. 222/2023 amending and supplementing the Companies Law no. 31/1990 and Trade Registry Law no. 265/2022 (the “Law no. 222/2023”) was published in the Official Gazette No.
667/20 July 2023 and entered into force on 23 July 2023.
I. Main amendments brought by the Law no. 222/2023 to the Companies Law no. 31/1990
A. WINDING-UP
- in order to be deregistered from the Trade Registry, the limited liability companies undergoing voluntary winding-up based on art. 235 of the Companies Law (simplified winding- up) and any companies undergoing voluntary winding-up based on art. 260 of the Companies Law (ordinary winding-up) must submit an additional document consisting of the proof of fulfilling the obligation to calculate, withhold and pay the winding-up income tax set out in art. 97(5) of the Romanian Tax Code or the tax on the incomes obtained by non-residents from the winding-up of residents set out in art. 223(1) letter o) and art. 224 of the Romanian Tax Code, as applicable
B. CROSS-BORDER OPERATIONS
- the current Chapter III (Cross-border merger) of Title VII is repealed and three new Chapters IV, V and VI are added, dealing respectively with the cross-border merger, cross-border conversion and cross-border division, transposing the provisions of the Directive (EU) 2019/2121 of the European Parliament and of the Council of 27 November 2019 amending Directive (EU) 2017/1132 as regards cross-border conversions, mergers and divisions
Cross – Border Merger
- joint stock companies, partnerships limited by shares, limited liability companies – Romanian legal persons, and the European companies with registered office in Romania, may merge with (i) companies having the registered office or, as the case may be, central administration or principal place of business within other countries members of the European Union or the European Free Trade Association (the “Member States”), that are governed by the law of such Member States and of a type listed in Annex II to Directive (EU) 2017/1132 of the European Parliament and of the Council of 14 June 2017 relating to certain aspects of company law and with (ii) other companies having the registered office or, as the case may be, central administration or principal place of business within such other Member States, that are not of a type listed in Annex II to Directive (EU) 2017/1132, if they are endowed with legal personality, separate assets which alone serve to cover their debts and are subject to publicity formalities that are similar to those set out in the Directive (EU) 2017/1132 and provided that the law of such Member States allows such mergers
- the cross-border merger means an operation whereby a) one or more companies of a type listed in Annex II to Directive (EU) 2017/1132 and provided that at least two such companies are governed by the law of two different Member States, on being dissolved without going into liquidation, transfer all their assets and liabilities to another existing company, the acquiring company, in exchange for the issue to their shareholders of securities or shares representing the share capital of the acquiring company and, if applicable, a cash payment not exceeding 10 % of the nominal value of those securities or shares; b) several companies of a type listed in Annex II to Directive (EU) 2017/1132 and provided that at least two such companies are governed by the law of two different Member States, on being dissolved without going into liquidation, transfer all their assets and liabilities to a company that they form, the new company, in exchange for the issue to their shareholders of securities or shares representing the share capital of that new company and, if applicable, a cash payment not exceeding 10 % of the nominal value of those securities or shares; c) a company of a type listed in Annex II to Directive (EU) 2017/1132, on being dissolved without going into liquidation, transfers all its assets and liabilities to another company governed by the law of another Member State, holding all the securities or shares representing its share capital; d) one or more companies of a type listed in Annex II to Directive (EU) 2017/1132, on being dissolved without going into liquidation, transfer all their assets and liabilities to another existing company, the acquiring company, without the issue of any new securities or shares by the acquiring company, provided that one person holds directly or indirectly all securities or shares representing the share capital of the merging companies or the shareholders of the merging companies hold their securities or shares in the same proportion in all merging companies
- Romanian law applies to procedures and formalities (i) regarding the cross-border merger with a view to obtaining the pre-merger certificate by the Romanian merging legal persons (other than the acquiring company or newly formed company) and to procedures and formalities performed (ii) for the registration with the trade registry of newly-formed Romanian companies further to the cross-border merger or, as the case may be, (iii) for the registration of the amendments to the articles of association of the Romanian acquiring company
- simplified formalities apply if (i) the acquiring company holds all securities or shares of the acquired company/companies or if (ii) the merger by acquisition is performed by a person holding directly or indirectly all securities or shares of the acquiring company and of the acquired company/companies and the acquiring company does not issue any new shares further to merger; in such cases, the merger is approved by decision of the board of directors/directorate, with the prior information of shareholders, but the shareholders holding at least 5% of the share capital can request the calling of a general meeting of shareholders to resolve on the cross-border merger; if the acquiring company holds at least 90%, but not the entire share capital of the acquired companies, the independent expert(s)’ report(s) and other merger related documents are mandatory only provided that the law governing the acquiring company or acquired company/companies require so
- the cross-border merger takes effect, as applicable, (i) as of the registration of the newly formed Romanian company with the trade registry; (ii) in the case of merger by acquisition, as of the registration of the amendment to the articles of association of the Romanian acquiring company with the trade registry, save where the parties agree on another effective date, which may be neither subsequent to the end of the current financial year of the acquiring company, nor prior to the end of the last closed financial year of the company/companies transferring their assets and liabilities; (iii) as of the registration of the newly formed European company having its registered office in Romania
Cross – Border Conversion
- Romanian joint stock companies, partnerships limited by shares and limited liability companies may be subject to a cross-border conversion into a company of the type listed in Annex II to Directive (EU) 2017/1132; conversely, a company governed by the law of a Member State allowing it to be subject to a cross-border conversion, may be converted into a joint stock company, partnership limited by shares and limited liability company, Romanian legal person, and be registered with the trade registry having jurisdiction over the registered office of such converted company
- the cross-border conversion means an operation whereby a company, without being dissolved or wound up or going into liquidation, converts the legal form under which it is registered in the trade registry of a Member State, called departure Member State, into a legal form as listed in Annex II to Directive (EU) 2017/1132, of another Member State, called the destination Member State, and transfers at least its registered office to the destination Member State, while retaining its legal personality
- Romanian law applies to the steps and formalities regarding the cross-border conversion performed with a view (i) to obtaining the pre-conversion certificate by the Romanian legal person being converted into a legal form of another Member State and (ii) to registering with the Trade Registry a company governed by the law of another Member State and converted into a joint stock company, partnership limited by shares and limited liability company, Romanian legal person
- the cross-border conversion of a company into a Romanian legal person takes effect upon the registration of the converted company with the trade registry; if a Romanian legal person is converted into a form provided by other Member State, the law of such destination Member State shall prescribe the effective date of the cross-border conversion
Cross – Border Division
- joint stock companies, partnerships limited by shares, limited liability companies – Romanian legal persons, and the European companies with the registered office in Romania, may undergo a cross-border division provided that at least two from the involved companies are governed by the law of two different Member States and are of a type listed in Annex II to Directive (EU) 2017/1132
- the cross-border division means an operation whereby a) a company of a type listed in Annex II to Directive (EU) 2017/1132, on being dissolved without going into liquidation, transfers all of its assets and liabilities to two or several recipient companies, newly formed companies of a type listed in Annex II to Directive (EU) 2017/1132 in exchange for the issue to the shareholders of the company being divided of securities or shares in the recipient companies and, if applicable, a cash payment not exceeding 10 % of the nominal value, or, in the absence of a nominal value, a cash payment not exceeding 10 % of the accounting par value of those securities or shares (“full division”); b) a company of a type listed in Annex II to Directive (EU) 2017/1132 transfers part of its assets and liabilities to one or more recipient companies, newly formed companies of a type listed in Annex II to Directive (EU) 2017/1132 in exchange for the issue to the shareholders of the company being divided of securities or shares in the recipient companies, in the company being divided or in both the recipient companies and the company being divided, and, if applicable, a cash payment not exceeding 10 % of the nominal value, or, in the absence of a nominal value, a cash payment not exceeding 10 % of the accounting par value of those securities or shares (“partial division” or “division in the interest of the shareholders”); or c) a company of a type listed in Annex II to Directive (EU) 2017/1132 transfers part of its assets and liabilities to one or more recipient companies, newly formed companies of a type listed in Annex II to Directive (EU) 2017/1132 in exchange for the issue to the company being divided of securities or shares in the recipient companies (“division by separation” or “division in the interest of the company”)
- Romanian law applies to procedures and formalities (i) regarding the cross-border division with a view to obtaining the pre-division certificate by the Romanian legal person being divided and (ii) for the registration with the trade registry of the newly-formed recipient company/companies, Romanian legal persons.
- the cross-border division of a Romanian legal person takes effect upon the deregistration from the trade registry of the company having been divided or, as the case may be, upon the registration with the trade registry of the amendment to its articles of association; in the case of a cross-border division of a company governed by the law of other Member State that triggers the setting-up of at least one recipient company, Romanian legal person, the division shall take effect according to the law applicable to the company having been divided
Common Provisions
- the cross-border merger / conversion / division are multi-step procedures requiring inter alia: (i) the preparation by the members of the board of directors/directorate of the merging companies of the common draft terms of the cross-border merger/conversion/division and of a report explaining and justifying the legal and economic implications of such cross-border operation to shareholders and employees (ii) the issuing by one or several independent experts (licensed evaluators) acting for each or all involved companies of a report on the common draft terms of the cross-border merger / conversion / division (such reports are not required in the case of limited liability companies with sole shareholder or provided that all shareholders agree to waive such requirement)
- the general meeting of shareholders resolving on the cross-border merger / conversion / division must be called at least 6 weeks prior to the date of the meeting; in the case of joint stock companies and partnerships limited by shares, the resolution shall be passed according to art. 115(2) second thesis of the Companies Law (i.e. [ ]) and the articles of association may not provide for a majority higher than 90% of the votes held by the attending or represented shareholders and in the case of limited liability companies, the resolution is passed with the quorum set out in art. 192 of the Company Law (i.e. [ ]) , but with a majority of at least 2/3 of the votes held by attending or represented shareholders and the articles of association may not provide for a majority higher than 90% of the votes held by the attending or represented shareholders
- the shareholders that did not vote in favour of the resolution approving the cross-border merger / conversion / division may withdraw from the company and ask that their securities or shares be bought back by the company; such right may be exercised within 30 days from the date of the resolution provided that the intention to withdraw is notified at the latest within the general meeting of shareholders; within 15 days from the expiry of the above 30-day term, the shareholders that decided not to exercise their withdrawal right but alleging (i) in the case of merger, that the exchange ratio is inadequate, may ask the tribunal having jurisdiction over the registered office of the merging company or (ii) in the case of division, that the allocation of securities or shares in the share capital of the recipient companies or that the exchange ratio is inadequate, may ask the tribunal having jurisdiction over the registered office of the company being divided, to oblige such company to pay them a monetary compensation;
- within 45 days from the publication of the common draft terms of the cross-border merger / conversion / division, any creditor whose receivable is prior to such date and not outstanding at that date and who is dissatisfied with the guarantees set out in such document, must notify the merging company / company / company being divided, with a view to obtain adequate guarantees
- if, at the level of one or several merging companies governed by the law of another Member State, there is a mechanism requiring the involvement of employees in the company’s activity such as those set out in art. 2 letter k) of the Council Directive 2001/86/EC of 8 October 2001 supplementing the Statute for a European company with regard to the involvement of employees or such other mechanism providing for the involvement of employees or if that at least one of the merging companies has, within the 6 months preceding the publication of the draft terms of the cross-border merger, an average number of employees equivalent to 4/5 of the threshold required for the involvement of employees, as provided by the law applicable to such merging company, the Romanian acquiring company or newly formed Romanian company or the European company having its registered office in Romania, must establish such a mechanism, in which case the relevant provisions of the Government Decision no. 187/2007 regarding the procedures for information, consultation and other modalities for involving the employees in the activity of the European company, shall become applicable; if the acquiring company or newly formed company is a Romanian legal person or a European company having its registered office in Romania, the management bodies of the merging companies provided with mechanisms for the involvement of employees may without prior negotiations abide by the reference provisions of the said Government Decision no. 187/2007 or observe such provisions as of the registration with the trade registry of the amendment to the articles of association of the acquiring company or as of the registration of the newly formed company, and a related mention thereto shall be made in the draft terms of the cross-border merger; if at least one of the recipient companies in the case of division or if the company subject to conversion is a Romanian legal company, the members of its board of directors/directorate shall ensure the observance of the employees’ rights to be involved and co-interested in the company’s activity and the aforementioned provisions applicable in the case of merger shall apply accordingly
- the Romanian merging company (other than the acquiring company or newly formed company) / company subject to conversion / company being divided, shall submit to the trade registry an application for the delivery of the pre-merger / pre-conversion / pre-division certificate accompanied by the required documents; the assessment term for the delivery of such certificate is of maximum 3 months, unless the trade registry has serious doubts indicating that such operation was set up for abusive or fraudulent purposes leading to or aimed at the evasion or circumvention of EU or national law, or for criminal purposes, in which case such term may be extended for an additional maximum 3-month term and the issue of such certificate shall be deferred for settlement to the tribunal
- the Romanian trade registry shall share the pre-merger / pre-conversion / pre-division certificate with the competent authority assessing such operation in the relevant Member State where the acquiring company or the newly formed company has its registered office, in the case of merger / in the destination Member State, in the case of conversion / in the relevant Member States whose laws govern the recipient companies, in the case of division, and with the trade registries in such Member States through the system of interconnection of the trade registries
- the cross-border merger / conversion / division that was subject to a legality control may not be cancelled after its effective date; by exception from the provisions of art. 132(3) of the Company Law, the claim for the cancellation of the shareholders’ resolution approving such operation may be filed within 30 days from its publication in the Official Gazette of Romania
II. Main amendments brought by the Law no. 222/2023 to the Trade Registry Law no. 265/2022
- the trade registry office shares for free, through the system of interconnection of trade registries, documents and information with trade registries of Member States in the case of cross-border conversion, merger and demerger
- the following information is available for free through the system of interconnection of trade registries, on ONRC’s webpage or its online portal: the common draft terms of the cross-border merger, conversion and division; the notice required to be submitted with the trade registry in the case that such draft terms are published on the companies’ webpages and containing the following information with regard to each involved company: its legal form and identification details; the trade registry office where the documents required to be published according to the law were submitted; information on the measures taken for the exercise of the creditors’, employees’ and shareholders’ rights as set out by the law; the webpages of the involved companies where such draft terms and other required documents and information can be accessed online for free upon the request of the competent authority of a EU member state, ONRC communicates promptly through the system of interconnection of trade registries, information on any registrations made in the trade registry and data recorded in the criminal record with regard to the incapacity to exercise the position of director, member of the board of directors, member of the surveillance board or of the directorate, in connection with the individual or legal person in question, that is to exercise in the member state the quality set out in art. 14 letter d) point (i) of the Directive (EU) 2017/1132 of the European Parliament and of the Council of 14 June 2017 relating to certain aspects of company law (i.e. the persons who either as a body constituted pursuant to law or as members of any such body, are authorised to represent the company in dealings with third parties and in legal proceedings).
