Dissolution and Liquidation of a Company in Romania
Dissolution is a state of exception from the functioning of the commercial company, being a stage in the process of terminating its legal personality.
The causes of the dissolution of the commercial company are regulated by the law or established in the constitutive act.
According to the Law on comanies, regarding the trading companies, the company dissolves through:
- the passage of time set for the duration of the company;
- the impossibility of achieving the object of activity of the company or its realization;
- declaration of nullity of the company;
- the decision of the general meeting;
- the court decision, at the request of any associate, for grave reasons, such as serious misconduct between associates, which prevents the operation of the company;
- insolvency of the company;
- other causes provided by the law or the constitutive act of the company.
There are three ways to dissolve a company in Romania, as detailed below:
A. Dissolution of a firm by law
Law on companies regulates the legal dissolution of the commercial company, in the case of expiry of the term set for the duration of the commercial company.
Taking into account the fact that the association established the company’s duration by the constitutive act, and the fixed term expired, the company dissolves right at the expiration of the term.
The registration of the mention of the legal dissolution of a limited liability company with several associates involves the following steps:
- Stage I – registration of the dissolution request of the company; the application shall be accompanied by the decision of the General Meeting of the Associates, which shall take into account the dissolution of the commercial company as a result of the expiry of the term of operation and the appointment of the liquidators with the mention of the termination of the mandate of the members of the administrative and / or management bodies of the legal person and deletion of the company after liquidation, as well as a series of other documents;
- Stage II – registration of the company’s request for delisting along with a series of documents, including those that reveal the financial situation of the liquidation and the share distribution project signed by the shareholders / shareholders, the liquidators’ report; the certificate issued by the competent fiscal body showing that the company has no debts to the state budget and social contributions.
B. Voluntary dissolution of a company – through the will of the associates
The commercial company may dissolve before the expiry of the fixed term for its duration, through the will of the associates, manifested in the General Assembly.
The registration with the Trade Register of the mention of the voluntary dissolution of a company involves the following steps:
- stage I – registration of the dissolution and liquidation request, accompanied by the decision of the associates to carry out the dissolution and liquidation of the company taken with the quorum and the majority provided by the law for the modification of the constitutive act, when they agree on the distribution and liquidation of the company’s patrimony; when securing the settlement of the liability or its settlement in agreement with the creditors, as well as a series of other documents;
- Stage II – registration of the application for company delisting; the application will be accompanied by the financial statement of liquidation and distribution of the assets approved by the associates/members.
In the case of the voluntary dissolution of the commercial company in which all the shareholders agree on the division of the asset, the intervention of a liquidator is not necessary.
Instead, the lack of shareholders’ agreement regarding the division of assets involves an additional stage, namely the procedure of liquidation of the commercial company, and implicitly the intervention of a liquidator in the procedures for the cessation of the functioning of the commercial company.
C. Dissolution of a company by the court
According to the law, any associate may ask the tribunal for diligent reasons to dissolve the commercial company. The law presumes for serious reasons the serious misunderstandings between associates, which impede the functioning of society.
The court decision on the dissolution of the company in Romania must be registered with the Trade Register and published in the Official Gazette.
The liquidation of the commercial company as a result of its dissolution is mainly in the interests of the associates. After the distribution of the net assets between the partners, the liquidation procedure of the company is concluded.
According to Law on the trading companies, after the winding-up, the liquidators must request the Trade Register Office to cancel the registration of the Trade Register within 15 days from the date of the last winding-up act, which is the distribution of the net asset between the associates.
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