Suspending a company

A company’s activity in Romania can be suspended in the following ways.

First, under the Companies Law, companies may become temporarily inactive. The period of inactivity must be notified to the tax authority and recorded in the Trade Register, and may not exceed three years, counted from the date the inactivity is recorded in the Trade Register.

If temporary inactivity lasts longer than three years, any interested person, as well as the Trade Register, may ask the tribunal to dissolve the company.

Second, a company may be declared inactive by the tax authority.

Under the Fiscal Procedure Code, a legal-person taxpayer is declared inactive if it fails to meet any legal obligation during a calendar year, evades tax inspection by declaring identification data for its tax domicile that do not allow the authority to locate it, or if the authority finds that it does not operate at its declared tax domicile.

Under later legislation in this area, companies also commit administrative offences if they fail to issue fiscal receipts, issue receipts that do not match the price of the goods or services, fail to keep a register of activity and issue receipts when the cash register is out of order, or make the sale conditional on a tip.

The sanctions include suspension of the business until it is equipped with an electronic fiscal cash register and proof of payment of the fine (or half of it) is presented, and — for unexplained sums over RON 300 and over 3% of the total recorded sales, from the second such sanction within 24 months — suspension for 30 days.

To record temporary suspension of activity in the Trade Register, you will need:

• the registration application (original);
• a standard statutory declaration that the company will not carry on its declared activities at its registered office, secondary offices or elsewhere, for up to three years;
• the original decision of the general meeting or the sole shareholder on temporary suspension;
• the certificates issued on the basis of the statutory declarations;
• proof of payment of the legal fees.

Where applicable, a special authenticated power of attorney, a lawyer’s power of attorney or a delegation for the persons appointed to complete the formalities.

Once the suspension is recorded, the company may no longer carry on the activities for which it was authorised — in practice it can no longer issue invoices.

A temporarily inactive company can still do certain things: for example, collect money from contracts concluded before the suspension or defend itself in court.

Companies declared inactive by the tax authority may continue their authorised activities and remain liable for taxes, but lose the right to deduct expenses and VAT on purchases.

A company whose temporary inactivity is recorded in the Trade Register must apply to the Trade Register to resume activity, filing the same documents, this time for resumption. It does not have to wait for the end of the declared period.

A company declared inactive by the tax authority can be reactivated when it has no outstanding tax obligations, the authority finds that it operates at its declared tax domicile, and it meets all its legal obligations.