Essential steps and costs for starting a new company

We start by mentioning that all the necessary steps needed in order to register a company can be made for a fee directly at the Trade Register Office from the county where the new company will have its registered office. 

In case you do not have the necessary time or do not wish to have direct contact with all the bureaucracy, you can refer to a lawyer or a consultant specialized in such operations, who will take over the necessary activities in this stage under a service agreement or an express mandate.  

The first step you need to take for opening an LLC is to go to the Trade Register Office and reserve the company name. At this time the cost for this document is 72 lei.

With the name availability proof provided by the Trade Register Office you will go to a lawyer or an attorney for the statuary declarations, respectively that the partners and directors meet the conditions stipulated by Law 31/1990. We would like to bring to your attention the following situation: if in the past you were a partner and/or director in a company that maybe did not have any activity or you simply did not file the tax return (even if with value zero) or the balance sheets in the terms stipulated by the law you may be surprised to have these facts registered in your tax record (attention! not your criminal record) and this might prevent you from being granted the quality of partner or administrator in a new company.

It is also important to know that you can be a sole shareholder in only one company. Hence, if you already have a business and you wish to open another company, you will have to choose a partner, even if only formally (with 5% of the shares). We are often asked if the Registered Sole Trader status falls into the same category and the answer is no; if you are a Registered Sole Trader and do not have a company you can be a sole shareholder in the new company.

In case the director(s) cannot be present at the Trade Register Office when you file the documents, you will be required to prepare the specimen signatures before an attorney.
An essential element while establishing a new company is the office. It can be your personal residence, a lawyer’s office, a rented space or received through a bailment agreement. Depending on the chosen option certain documents need to be prepared. 

Thus, if the space to be used as the office is not a store but a residential space you need to have the agreement of the neighbours or tenants' association to use it as headquarters of the company. If the area concerned is a house this agreement is necessary only if the house has common walls with another establishment or if a tenants' association exists in that area. 
 
If another company is registered in the same location, then you need to prepare a statuary declaration with an attorney that the conditions regarding the registered office are met. The declaration can be given both by the manager of the company that will be set up, as a user of the space, and by the owner of the premises. The Trade Register Office will verify how many companies are registered at each address.

If you choose to base your company at a lawyer, then you do not have to prepare these statements. 
 
If you have a lease for the space to be used as headquarters, you should know that the owner has the legal obligation to register the lease at the Public Finance Administration and to provide you with a copy of the contract together with the proof of registration. Without this evidence the registration of the company will not be accepted by the Trade Register Office judge.
Once you have established the headquarters you will have to prepare the articles of association. This is a document that defines the operational framework of the company; to be more precise it stipulates the associates and their contribution to the company, the directors, NACE codes etc. If there are specific references between the associates with regard to gains and losses, it is very important to detail them in the document.  
 
Even if at the time when you start the company you are considering a certain activity, we recommend specifying in the document all the NACE codes that do not have a special status, and later you will only activate the ones required for the desired activity. This way the costs of subsequent changes or activations of NACE codes will be smaller and the modification term reduced. If you choose a limited number of NACE codes and subsequently you wish to expand your business with an activity not included in your articles of association, you will have to recommence the formalities and draw up updated articles of association.   
 
The articles of association must also include the period of the administrator’s mandate which can be unlimited or for a specific period of time. It also has to specify the limits allocated to the director. If we do not discuss the context in which the management is ensured by third parties contracted for this particular function, then we recommend stipulating that the administrators individually have full powers of representation and administration. One of the questions we are usually asked in this situation is if the directors can become employees of the company later on, and the answer is yes. 

In order to set up the company you will have to open a primary capital account with a bank of your choosing in which the partners will have to transfer the subscribed capital. If such operation is delegated to a third party, the power of attorney will also stipulate that the delegate is authorized to deposit the money in cash, on behalf of the respective partner.  
Besides the documents mentioned above some other forms are also required, such as copies of documents, fiscal stamps and in particular cases other documents. A complete list of these documents can be found here.

The fees charged by the Trade Register Office for setting up a company are approximately RON 500-600.
After the registration of the file with the Trade Register Office, it normally takes 3 days to pick up the incorporation documents.
The previously described steps are valid both for the establishment of a company with 100% Romanian capital owned by individuals, and for a company with legal entities as partners. However, more documents need to be provided by the partner companies.

If you wish to associate with non-resident individuals, in addition to the above you should know that non-resident partners must sign the necessary documents (declarations, specimen signatures, articles of associations etc.) in the presence of an interpreter for the language of the residing country. If you are in this situation and your foreign partners will not be present at the signing of the documents, they can authorize you by power of attorney given in their country of residence or before the Romanian Consulate in that country; the power of attorney will have to be then translated and legalized. In this case we recommend that you get samples of the documents that they need to notarize, to send such samples to them so as to be accurate and to avoid wording mistakes or content problems in the documents you will file with the Trade Register Office.

If you need advice for setting up a new company, contact us here.