Suspension of a Company’s Activity

Suspension of a Company’s Activity in Romania

Law Office Alina Szilaghi provides full assistance and representation services in suspending a business in Romania.

Suspension of a Company’s Activity in Romania

Suspension of the activity of a trading company in Romania can be done in the following ways:

A first way of suspending the activity of a company is provided by the framework law on companies, namely Law on comanies. Under the provisions of the aforementioned law, companies may be temporarily inactive but this period of inactivity must be notified to the tax authorities and entered in the Trade Register and may not exceed 3 years. This term, as specified, starts to run from the date of registration with the Trade Registry of the mention of temporary inactivity.

If the period of temporary inactivity of the company exceeds the 3-year period, any interested party, as well as the ONRC, may request the court to rule on the dissolution of the firm.

A second way in which a company may enter a temporary inactivity period is the one declared by the Tax.

Thus, according to the Code of Fiscal Procedure, any taxpayer legal person will be declared inactive if: he does not fulfill any obligation stipulated by the law in a calendar year, he/she escapes from the carrying out of the tax inspection by declaring the identification data regarding the tax domicile make it possible to identify it by the fiscal body, as well as in the case when the fiscal body finds out that the legal person does not carry out its activity at the declared tax domicile.

Also, according to a legislative novelty in this field, companies are deemed to commit contraventions when: they do not issue tax vouchers, issue tax vouchers that are not in accordance with the value of the sale price of the good or service provided does not record the activities carried out and does not issue receipts in the event of a defect in the cash registers, nor does it condition the sale of the good or the rendering of the tipping service (notion defined by that ordinance).

The sanctions set out in this legislative norm also concern the suspension of the activity of the economic operators until the endowment with a fiscal electronic cash register and the proof of payment of the fine or half of the amount thereof, but also if there are unjustified amounts over 300 and more than 3% of the total value of the goods and services rendered, registered by the cash registers or special registers, starting with the second such sanction within 24 months. In the latter case, the business will be suspended for a period of 30 days.

The documents you will need to register in the trade register the terms for temporary suspension of a company’s business are as follows:

  • the application for registration in the original;
  • a type-specific statement indicating that the legal entity does not carry out the activities declared for a period of up to three years at its registered office, at its secondary offices or outside it;
  • the decision of the general meeting of the shareholders/associates or the decision of the sole shareholder regarding the temporary suspension of the company’s activity in the original;
  • the certificates of evidence that were issued on the basis of proprietary return statements for the suspension of the company’s business;
  • proof of payment of legal fees or fees.

Also, if necessary, it will be necessary to file a special authorization, in authentic form, attorney or delegation, for the persons who have been appointed to perform all the related legal formalities.

At the moment of the registration of the mention of suspending the activity of the company in the trade register, the firm is incapacitated to carry out the activity in respect of which it has been authorized. In practice, the company declared inactive temporarily can no longer exercise its object of activity during this period, and can not issue invoices.

However, there are certain activities or acts that a temporary inactive company may undertake, for example, may receive sums of money arising from legal relationships that have been concluded before the suspension of their activity or maybe defended in court in the case of litigation.

With regard to companies declared inactive by the Fiscal Code, the 2015 Fiscal Code provides that they will be able to carry out their activity for the purpose of their activity for which they have been authorized, subject to tax and tax obligations, but will not benefit from the right deduction of costs and value-added tax relating to the purchases that have been made.

Of course, as regards the companies for which the mention of temporary inactivity was registered in the Trade Register, the company will have to request the resumption of the activity at the Trade Register by submitting the same above mentioned documents, which will not concern the suspension, resumption of business activity. It is not necessary to comply with the time limit for declaring temporary inactivity of the company.

Regarding the inactivity of a company by the Tax, the Fiscal Procedure Code mentions that a legal entity will be able to resume its activity when: it will not have outstanding tax obligations, the tax authorities will find that it carries out its activity at the declared tax domicile and fulfills all its obligations under the law.

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