Latest updates

Directors' confidentiality obligations
Schoenherr
  • Company & Commercial
  • Romania
  • 07 October 2019

Under Romanian law, the scope and duration of a director's confidentiality obligations must be agreed in the mandate agreement to be concluded between the director and their company. In order to mitigate any risks in this regard, mandate agreements should set out the specific circumstances in which directors can disclose confidential information to their company's parent undertaking or subsidiaries.

Exit strategies: registering a share transfer when target shares are encumbered by third parties
  • Capital Markets
  • Romania
  • 02 April 2019

The stock market's flexibility is its greatest selling point for publicly traded companies, as it allows a fast flow of capital while still enabling majority shareholders to implement fundamental corporate changes should they wish to exit the market. However, even with all of this flexibility, shares may not always be free of other encumbrances, and the sale of such shares may be opposed by interested parties or even refused to be recognised as a genuine sale by the Trade Registry.

Enforceability of drag-along mechanism for limited liability companies
Schoenherr
  • Corporate Finance/M&A
  • Romania
  • 13 February 2019

In Romania, joint stock and limited liability companies continue to be the most common type of corporation. Limited liability companies are an important backbone of the local economy, with many becoming large enough to qualify as targets in M&A transactions. However, debate exists as to whether classical exit-related provisions (eg, put or call options or drag-along or tag-along clauses) may be implemented in M&A transactions involving shares in limited liability companies.

All board decisions made by delegation of powers can be challenged in court
Schoenherr
  • Company & Commercial
  • Romania
  • 15 October 2018

Although the Companies Law created flexible mechanisms and procedures allowing specific shareholder powers to be delegated to a company's management, it also provides that only some decisions made in this regard can be subject to an annulment action. Specifically, the law excludes decisions which concern an increase in a company's share capital from being challenged. However, the Constitutional Court recently recognised shareholders' right to request the annulment of such decisions in court.

Companies can now distribute dividends on a quarterly basis – but will they?
Schoenherr
  • Company & Commercial
  • Romania
  • 20 August 2018

Until recently, Romanian companies could distribute dividends to shareholders only on an annual basis and on approval of their annual financial statements at the end of each financial year. This paradigm has changed and companies can now opt to distribute their dividends annually or quarterly. Although these newly acquired corporate rights have been widely welcomed within the Romanian business markets, they may initially be treated with suspicion by entrepreneurs.

One step closer to enforcing Fourth AML Directive: changes for private companies regarding ownership transparency
Schoenherr
  • White Collar Crime
  • Romania
  • 02 July 2018

The government recently approved a draft legislation transposing the Fourth Anti-money Laundering Directive and introducing, among other things, important changes for private companies with regard to their reporting duties and transparency of ownership. Some of the new requirements for non-listed companies are of particular importance, as they will be key for combating money laundering and terrorism financing. The bill will also introduce stricter reporting duties and penalties for non-compliance.

Squeeze-outs of minority shareholders: methods and pitfalls
Schoenherr
  • Company & Commercial
  • Romania
  • 07 May 2018

The squeeze-out of minority shareholders in closely held companies is a controversial issue made more complex by the large number of Romanian companies with minority shareholders. Historically, state-owned companies were privatised through the management-employee buy-out method, which allowed employees to receive shares in former state-owned companies. As such stakes were often granular, many minority shareholders are dormant or even unaware of their participation in these companies.

Secret voting in general shareholders' meetings
Schoenherr
  • Company & Commercial
  • Romania
  • 26 February 2018

The corporate functioning rules for joint stock companies have been repeatedly altered by Romanian legislation, especially in relation to the governing structures of companies, such as shareholders' assemblies and management bodies. However, some situations create problems in practice or generate inconsistencies within jurisprudence. One such example is the use of secret voting in general shareholders' meetings.

Share capital increases – a practical solution
Schoenherr
  • Company & Commercial
  • Romania
  • 29 January 2018

Creditors and investors assess the level of a company's net assets when deciding whether to grant a loan to or invest in that company. Further, the Companies Law requires companies to maintain a certain level of net assets. However, an increasing number of companies on the Romanian market are struggling with low net assets to total asset ratios. Luckily, such companies can redress their situation through a share capital increase, which is a straightforward procedure.

Impact of environmental authorisation in transfer of assets or business
  • Corporate Finance/M&A
  • Romania
  • 29 November 2017

Regulatory approval plays an important role in the transfer of assets or lines of business. In general, where permits are issued in consideration of assets being sold, the transfer will entail a new authorisation procedure to be undertaken by investors. This is also the case for environmental authorisation; however, as local authorities do not consistently deal with the applicability of the various regulations in this regard, mitigating potential hurdles will generally require coordination with the respective authorities involved.

Mortgage Bonds and Securitization Laws Finally Pass Parliament
  • Securitisation & Structured Finance
  • Romania
  • 04 April 2006

Parliament has finally adopted the long-awaited Law on the Securitization of Receivables and the Law on Mortgage Bonds. Although the Mortgage Bonds Act appears to provide a suitable tool for issuing covered bonds, the Securitization Act appears to be overly regulative.

Madalina Neagu
Schoenherr
  • Bucharest
  • Romania
Monica Cojocaru
Schoenherr
  • Bucharest
  • Romania
Cristina Tudoras
Schoenherr
  • Bucharest
  • Romania
Martin Ebner
Schoenherr
  • Vienna
  • Austria
Alexandra Munteanu
Schoenherr
  • Bucharest
  • Romania
Iulia Caizer
Schoenherr
  • Bucharest
  • Romania
Andra Jegan
Schoenherr
  • Bucharest
  • Romania
Schoenherr
Schoenherr
Vlad Săndulescu
Schoenherr
  • Bucharest
  • Romania