1. Types of commercial companies that may be established and operated in Romania:

        The Company Law regulates five types of commercial companies:

        - Limited liability company (“societate cu raspundere limitata - SRL”),

        - Joint stock company ( “societate pe actiuni - SA”),

        - General partnership ( “societate in nume colectiv - SNC”),

        - Limited partnership ( “societate in comandita simpla - SCS”),

        - Limited partnership on shares ( “societate in comandita pe actiuni - SCA”).

    In addition to these common types of commercial companies, there are some other specific forms of businesses/associations that may be as well established and operated, at various investment levels:

        - representative offices of foreign companies - ( “reprezentante ale societatilor straine”) – their scope is to promote parent company’s products or services, identify new business opportunities and/or intermediate international transactions for their parent company,

        - branches of foreign companies (“sucursale ale societatilor straine”) – with a slightly similar scope,

        - silent partnerships (“asociere in participatiune”) – a contractual form of association used by two/more companies to perform a specific commercial activity,

    Except for the silent partnerships, the representative offices and the branches, which are not legal entities, all the other types of commercial companies are considered as Romanian legal entities, have legal personality and may acquire land in Romania. Also, except for the silent partnership, all the other types of businesses are considered as residents and are subject to the Romanian fiscal and customs legislation.

     The most frequently used types of companies are the limited liability companies (“SRL”) and the joint stock companies (“SA”), which will be further on referred to.

    2. Limited liability company (SRL) and Joint stock company (SA) registration procedure.

Setting up a Limited liability company (SRL) and a Joint stock company (SA) is subject to a similar procedure (with few particularities for each type of company).

    Both types of companies are incorporated following its registration with the Trade Registry Office of the Tribunal under the jurisdiction of which the headquarters of the future company are located.

    The written application for incorporation shall be filed with the competent Trade Registry in a period of 15 days following the conclusion of the company’s Articles of Incorporation and shall be signed by the appointed administrator/other representative of the company.

    The application shall have attached the following documentation:

        - the Articles of Incorporation signed by the founders,

        - the proof of payment of the subscribed shares,

        - the proof of headquarters

        - the proof of company’s name availability – issue by the competent Trade Registry Office prior to start the registration procedure,

        - for in kind contributions to the share capital – the ownership title and, for the real estate, the certificate of charges,

        - the documents ascertaining the deeds performed in the company’s name and approved by the shareholders,

        - declarations of the founders, first administrators/directors and of the censors (if the case), that they meet he legal requirements to act in their capacity,

        - the specimen of signature of the administrators/directors and of the censors (if the case).

    As of the date of its registration with the Trade Registry Office the company acquires full legal capacity and is allocated a unique registration code (“CUI”). Starting with this date the company may enter into any commercial transaction, as per its declared object of activity.

    Up to the final point of the registration procedure, the company has only limited legal capacity, provided by law solely for the incorporation activities.

    The name of any Limited liability company (SRL) must be personalized and may contain the name of one or more shareholders. In any event, it shall also have the indication that the company is a Limited liability company (SRL).

    The name of a Joint stock company (SA) shall be composed of a personalized syntagm, different from other company names and shall be followed by the indication that the company is a Joint stock company (SA).

    If the new company’s name is not sufficiently differentiated from other existing company names, the Trade Registry may reject the request for that particular name.

    In any case, insertion of the words stiintific (“scientific”), academie (“academy”), academic (“academic”), universitate (“university”), universitar (“university”), scoala (“school”), scolar (“educational”) or their derivates are forbidden, while insertion of the words national ( “national”), roman (“Romanian”), institut (“institute”), their derivatives or syntagms characteristic to central authorities or institutions is allowed only upon the agreement of the General Secretary of the Government.

    3. Social capital and shares. Shareholders.

    For Joint stock company:

    The minimum share capital cannot be below 90,000 RON (the equivalent of at least 25,000 Euro) and is divided into shares having a minimum value of 0.1 RON. The amount of the minimum share capital may be modified by the Government so as to represent the equivalent of 25,000 Euro.

    The founders must subscribe to the entire social capital of the company and must pay at least 30% of its value, the rest of to 70% having to be paid within 12 months following the incorporation of the company (in case the shares have been subscribed in cash) and within 2 years following the incorporation of the company, in case the shares have been subscribed by contributing with a plot of land.

    The minimum number of shareholders is two.

    For Limited liability company (SRL):

    The minimum share capital is of 200 RON (approximately 70 Euro) and is divided into social parts that cannot have a value lesser than 10 RON. The founders are obliged to integrally pay the subscribed share capital prior to the incorporation.

    The number of shareholders cannot be higher than 50. It is possible to set up an SRL with a sole shareholder (either a natural or a legal person, Romanian or foreign). In this case, the Company Law no. 31/1990 forbids a person to be a sole shareholder in more than one Limited liability company (SRL). The same interdiction is for the Limited liability company (SRL) with a sole shareholder to establish another Limited liability company (SRL) having it as sole shareholder.

    Usually, the Limited liability company (SRL) with a sole shareholder is used as an investment tool (e.g. for buying real estate, which cannot be directly acquired by foreign persons).