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On 10th of June 2020, the Chamber of Deputies, as the decisional body of the Romanian Parliament, adopted a draft bill (the "Draft bill") for the amending the Law 129/2019 regarding the prevention and control of money laundering and terrorism financing, as well as amending other bills ("Law 129").
Currently, in accordance with the provisions of article 56(1) of the Law 129, the obligation to submit the declaration regarding the ultimate beneficiary occurs in any of the following three (3) cases:
when the company is incorporated;
annualy;
whenever a modification to the beneficial owners already registered in the Trade Registry intervenes, in which case the declaration regarding the ultimate beneficial owner is submitted within 15 days os of the occurence date.
According to the Draft Bill, the declaration regarding the beneficial owner is to be submitted in any of the two (2) cases:
at the incorporation date and/or
whenever a modification to the beneficial owners already registered in the Trade Registry intervenes.
Where the individuals registered with the Trade Registry are not the real beneficiaries or where the control is exercised by other means, we consider that the obligation to submit the declaration regarding the beneficial owners should continue to exist.
Another amendment which we consider to be opportune is the fact that the declaration regarding the ultimate beneficiary will be submitted only by the companies held by legal persons (thus exempting the companies which are held by individuals). This amendment is expected to be well received, as, in accordance with the explanatory notes to the Draft Bill, 96,3% of the limited liability companies are set up by individuals, which makes the identification of the ultimate beneficiary very straightforward.
The Draft Bill was sent to the Romanian President for promulgation. After the promulgation, it will be sent to the Official Gazette for publication in order to enter into force.
We remind you that on 15th May 2020, other amendments regarding the declaration of the ultimate beneficiary entered into force, namely:
the extension of the fifteen (15)-day term until 1st of November 2020 (applicable in case of annual statements or the modification of existing beneficiaries);
extension until 1st of November of the term for the companies registered until the entry into force of Law 129, to declare their ultimate beneficiaries.
the possibility to submit the declaration of the ultimate beneficiary under private signature and/or in electronic form (with electronic signature) and/or by post and/or by courier.
It is to be seen if the Draft Bill will bepromulgated in the form in which it was adopted. It is obvious however, that the Romanian business environment requires more than ever a legislative, concise, clear, predictable and digitalised legislative frame, based on the collaboration between institutions.
Starting from the recent events occurred in Romania, as well as in all over the world, it became more and more necessary to properly regulate the contractual clauses, analyze and adapt them in order to protect both contractual parties in case of an event that destabilizes the contractual balance as well as the relations between the parties.
The appearance of the pandemic caused by the Covid-19 virus led to the total or partial impossibility of execution of the contractual obligations for at least one of the parties. In order to minimize the consequences of this unfortunate event, the parties must analyze and rethink their contractual clauses regarding the force majeure and unforeseeability.
In this context, the question arises – how should these contractual clauses look like? It is indicated, from our point of view, that the parties should consider either a general regulation of these contractual clauses (to be supplemented with the Civil Code) or a very detailed one, covering at least 99% of the situations that the parties may face.
According to the law, the force majeure represents any external event, unpredictable, absolutely invincible and inevitable. On the other hand, the unforeseeability implies the fact that the execution of the contract has become excessively onerous due to an exceptional change of circumstances which makes it manifestly unfair to oblige a party to the execution of its obligation.
Both of the events that underlie the force majeure and the unforeseeability can lead to the adaptation of the contract or even to the exoneration of contractual liability.
Unlike in the case of contractual unforeseeability, in the case of force majeure, insofar as the parties fail to adapt the contractual clauses, the party that has not performed its obligation will not be able to obtain this in court. Instead, in case of unforeseeability, as we will see below, the parties will be able to appeal to the court in order to restore the contractual balance.
Also, in case of force majeure, the guilty party will be exonerated (exempt) only from the contractual liability that would have occurred during the period in which the event in question existed (for example, termination of the contract due to non-payment of the price, penalties for non-delivery of goods or non-payment for the provided services). In other words, the exoneration will not be total, respectively, the guilty party will not be totally/partially exonerated from his contractual obligation, but, its execution will be postponed until the end of the event called force majeure.
How should the contractual clauses be adapted?
A first and – perhaps the most important – way is represented by the negotiation of the contractual clauses by the parties.
The negotiation of the contractual clauses was also encouraged by the Romanian authorities, which established a set of fiscal measures, which would benefit both parties.
Thus, the Romanian authorities have adopted a series of regulations – from exemption of specific tax for the period in which taxpayers interrupt the activity totally or partially during the state of emergency (for example, in the hotel industry) to tax amnesties having as object interests, penalties and other accessories owed by taxpayers.
Also, the legislator provided the reduction of the annual tax on buildings by up to 50% for commercial spaces insofar as the owners of the spaces negotiated with the tenants the reduction of the rent by at least 50%, proportionally with the decrease of the space destined for economic activities. At the same time, according to other legal provisions, the legislator gave the tenant the possibility to obtain the postponement of the rent payment for a certain period.
All these legal benefits were based on the contractual negotiation between the two parties materialized in amendments submitted to the state authorities.
Regardless of the legal benefits, the parties have the freedom to assess the contractual clauses, to analyze the event itself and the effects it has on the contract, but also to decide on the termination of the contract.
The negotiation will be considered as being conducted in good faith, as long as its purpose will be the fair and reasonable adaptation of the contract.
The attempt to renegotiate the contract naturally results from the contractual solidarity and the principle of good faith, which includes the duty of loyalty between the contracting parties. This duty gives rise to the obligation to negotiate in case of an event that leads to the breaking of the contractual balance.
Contractual negotiation is also a preliminary stage of the judicial process. Thus, a second way to obtain the adaptation of the contract is achieved by submitting a claim in court. In this case, the court will analyze whether the execution of the contract has become excessively onerous due to an exceptional change of circumstances which makes it manifestly unfair to oblige a party to perform its obligation.
To the extent that the court agrees with the ones stated above, even if the other party opposes, it will issue a decision in order to adapt the contract, distributing equitably between the parties the losses and benefits resulting from the change of circumstances or even order the termination of the contract.
An important condition that must be met in order to be successful with such an approach is that the party has not waived by contract the benefits of contractual unforeseeability.
In conclusion, in order to choose for an option, it is necessary a pertinent analysis of the contractual clauses, of the occurred event and of the effects it produces on the contract (effect – cause analysis), as well as of the relationship with the other contractual party.
Following the press releases issued by the Romanian Government and the President of Romania regarding the relaxation of the restrictive measures adopted in the context of the COVID-19 pandemic, a series of measures were adopted for courts and prosecutor's offices for the period after May 14, 2020.
By far, the most important aspect is the reinstatement of the suspended cases based on the Presidential Decree issued on 16.03.2020. Although the courts received as a recommendation the fixing of the trial hearings within 10 days from the expiration of the state of emergency, as a result of the modifications made to the legal registers, some of them established trial hearings even around the day of 15.05.2020.
The cases on the sitting lists are to be grouped at different time intervals so as to respect the rules of social distance. Leaving the cases to the end of the hearings will be done only exceptionally, respecting the established time intervals, and the parties/lawyers will be able to submit documents in the public hearing only exceptionally, this being left to the discretion of the full president.
Also, the courts and prosecutor's offices have submitted a proposal to align – regarding the judicial vacation – to those decided by the High Court of Cassation and Justice, respectively the establishment of the judicial vacation only in August 2020. We look forward to have a decision in this regard.
Lawyers and litigants:
In order for the litigants and lawyers to be allowed to enter in courts/prosecutor's offices, it is recommended that they complete a questionnaire/statement with clear and simple questions, in which they mention the purpose of entering the institution, the activity that they carry out, the file number, the panel, etc., but also the fact that they undertake that as soon as they reach the purpose of the trip, they will leave the courts/prosecutor's offices. People who have symptoms of COVID-19 or who have been in contact with a patient with COVID-19 in the last 14 days will not be able to enter the institutions.
For lawyers, legal advisers, experts and interpreters, the president of the court may allocate different time intervals for consulting the ourt files.
At the same time, thermoscanners will be used at the entrance of the institutions and at the entrance and exit of each institution the delimitation will be made on the floor with bands visibly colored. At the archive and registry services visibly colored stripes will be used for 1.5 m away from each other and people will enter in the building only if they comply the clear access rules. The recommendation is that, for the beginning, the courts and prosecutor's offices should consider the extension of the working hours with the public so that each litigant/lawyer can exercise his rights. Also, the courts and prosecutor's offices take into account the option of communicating the procedural documents electronically, including on whatsapp.
Activity in courts and prosecutor's offices:
Regarding the effective activity in courts and prosecutor's offices, in accordance with the public policy document prepared by the Ministry of Justice, several recommendations were made, respectively:
observance of the social distance (minimum 1.5m), direct contact only maximum 15 minutes both between lawyers and the parties and with the staff of the courts/prosecutor's offices;
carrying out the activity in different time intervals, using even Saturday, as the case may be;
limiting public access to the courtroom and limiting the number of cases per court hearing;
prioritizing the solution of cases that are judged without summoning the parties in order to decongest the spaces from time to time;
prioritization of judicial cases or reduction of the number of cases pending in courts, with the observance/observation of the principles governing the criminal trial and the civil trial;
the use of the videoconferencing system, if it is technically possible and insofar as the nature, the object of the judicial case are compatible with this system, which implies the sacrifice of the principle of directness, extremely important in the phase of evidence administration;
Digitization is an integrated process of technical solutions based on information technology. According to a Press Release from 06.05.2020, published on the website www.just.ro, by Ministerial Order no. 1582/C/2020, the process of digitization of the Ministry of Justice`s activity was initiated. This ministry will initiate and suggest a partnership with the Public Ministry, the Superior Council of Magistracy and the liberal legal professions in order to digitize the administrative and judicial activities carried out at the level of courts and prosecutor's offices. This process will include both technical solutions and legislative solutions, designed and developed in parallel, within the mentioned partnership framework.
The digitization of institutions with attributions and competences in the field of justice is the necessary premise for initiating and achieving coherent and integrated digitalization of justice, in accordance with the fundamental principles and guarantees of the civil and criminal process, fully in compliance with the fundamental rights and freedoms of citizens.
The digitalization of justice as a public service implies a preliminary and serious public debate. It is interesting to analyze in the future whether or not this digitization will affect the basic principles of civil and criminal proceedings, the fundamental rights and freedoms, to what extent or at what stages of the process will be used, to what extent the client-lawyer relationship will be affected or if this will bring major changes in the lawering field.
imposing the wearing of masks or gloves or disposable equipment and the use of disinfectant products for the staff of the courts and prosecutor's offices; it should be mentioned that in the courts, since the first presidential decree was signed, some of these measures were taken as well as towards litigants or lawyers;
installation of disinfection tunnels in courts/prosecutor's offices with high traffic;
encouraging those who can work from home to stay at home, insofar as they can perform part of the activity in this way;
establishing the obligation to wear protective equipment and/or the installation of plexiglass partition panels in the event that the social distance cannot be ensured;
the obligation to wear protective masks or gloves inside the judicial institutions;
suspension of activities at certain time intervals for ventilation or disinfection of work spaces/meeting rooms, auditoriums, etc.;
placing services that serve the public in larger spaces than usual work (egg – a registry moved to a courtroom).
Regarding the staff of the courts and prosecutor's offices, the vulnerable persons from each group will be identified (for example, those who have medical conditions certified by the doctor), following that they will carry out individual/independent activities or ithey will work in telework regime.
In criminal matters, the transfer of detainees to the court will be made only in well-justified cases, the transport of large groups of people being avoided, the videoconferencing system being the one indicated in such cases.
The Decree of the Romanian President 195 of 16 March 2020 regarding the state of emergency in Romania imposed various measures, including the limitation of the public's access in the spaces of the public authorities as well as the use of the electronic means of communication with them.
In order to avoid the direct contact among people, the local and central authorities in Romania took various measures in order to respect the social distancing. As an exemple, the activity of the Commercial Registry and its territorial offices continues in respect of the registrations for natural and legal persons which are registered with the Commercial Registry, but all such registrations are made in electronic form, both on portal of the National Office of the Commercial Registry ("NOCR") (portal.onrc.ro) or via e-mail, the relevant address being available on the website of NOCR (www.onrc.ro).
What is the electronic signature?
The issuance and the use of the electronic signature are both regulated by the Law 455/2001 regarding the electronic signature ("Law 445") together with the Decision no. 1259/2001 regarding the approval of the technical and methodological norms for the application of Law 455/2001 regarding the electronic signature.
Two (2) typyesof electronic signature are being stipulated by Law 455, namely:
The simple electronic signature which represents data in electronic form (data being representations of information in a conventional form corresponding to the creation, processing, sending, receipt or storage thereof, through electronic means), the data beingattached or logically associated with other data in electronic form and which serve as an identification means.
The extended electronic signature is the signature which cumulativelly fulfills the following conditions: (i) it is connected in an unique way to the signing party; (ii) it ensures the identification of the signing party; (iii) it is created, by means, exclusivelly controlled by the signing party; (iv) it is connected with the data in electronic form, to which it relates in such a way so that any subsequent modification thereof is identifiable.
What is the legal regime of the documents bearing an electronic signature ?
Any document to which an extended electronic signature has been associated, which is based on a qualified unsuspened certificate and which is generated with the help of a secured device for the creation of an electronic signature, is assimilated, as regards its conditions and effects, with a document concluded under private signature.
The document in the electronic form, which has an electronic siganture associated to it and which is acknowledged by the person it is opposed to, has the same effect as the authentic act between the contracting parties.
Likewise, if the written form is requested as a proof or as a validity condition of a legal act, a document in electronic form fulfills such condition (either proof, or validity) if it has been associated or incorporated an extended electronic signature, in accordance with the provisions of Law 455.
Therefore, the extended electronic signature is required in case of all documents which can be sumbitted online with the authorities, regardless if such documents are lodged during the state of emergency or during the period when the restrictions are lifted. Asadar, semnatura electronica extinsa este necesara in cazul tuturor documentelor ce pot fi depuse online la autoritati, indiferent ca acestea se depun in timpul situatiei de urgenta sau in timpul perioadei cand restrictiile sunt ridicate. The authorities which, to our knowledge, accept the documents bearing such type of electronic signature are: The National Fiscal Administration Authority, the Territorial Labor Inspectorate, the National Office of the Commercial Registry and the Official Gazzette.
The extended electronic signature is obtained through a simple procedure, on the basis of an application sent to a supplier of certification services (e.g. Digisign, Certsign) togethether with a copy of the personal identity card of the applicant. A tax will be paid by the applicant on the basis of the invoice issued by the respective supplier of certification services.
The extended electronic signature is applicable also during the contentious phase. Thus, in accordance with the provisions of article 25 of the EU Regulation 910/2014, the electronic signature has a legal effect and it is accepted as a proof during the judiciary proceedings, regardless of the fulfilment of the requirements for qualified electronic signatures.
Leaving aside the rules of the social distancing which have been imposed by Covid-19 pandemic, are there incontestable advantages for the use of electronic signature?
Even if we have started talking more and more about the electronic signature once the Covid-19 pandemic has burst, the electronic signature had already been used in dealing with certain public authorities, such as the National Agency of Fiscal Administration.. In the context of a society insuficiently digitalised, the standard form of signing documents is preferred. Nevertheless, the electronic signature has incontentested advantages for the business environment, such as:
Using resources in an efficient manner
Any document must be printed before affixing the holographing signature. Bearing in mind the bureacracy and the commercial relations, there is sometimes the need to print a big volume of documents which implies the consumption of various equipment and assets (toner, paper, printer), as well as the time required for printing and signing them. Sometimes, such documents must be sent by courier, which implies other costs (time and courier charges). The electronic signature allows the quick signature of a big number of documents and sending them to the receiving party at once.
Increased security
Documents bearing an electronic signature cannot be amended, as each electronic signature is protected.
We know that in European Union, a qualified electronic signature obtained in a member state is recognised as such in all other member states.
More than that, by enhancing an increased degree of security, the electronic signature is a guarantee both for foreign business partners and for foreign gouvernments.
Until 15 May 2020, when the emergency state ceases, it is obvious that the contact with various authorities will be done through electronic signature. It is not clear either how the restrictions will be relaxed, or how the social interaction will look like (not only with the authorites, but also with the business partners). It is obvious that the rules regarding the social interaction will be maintained at a certain level, while the business environment will change. As such, considering the advantages of an electronic signature, we believe that it is recommended for it to be used even more by the business environment.
Covid-19 pandemic (the "Pandemic") has significant effects on the economy of the European Union, leading thus to the necessity to evaluate the Foreign Direct Investments in the member states ("FDI"). The FDIs are considered to establish or maintain lasting and direct links between investors from third countries including State entities, and undertakings carrying out an economic activity in a Member State.
On 13 March 2020 the European Commission (the "Commission") issued a Communication regarding the Guidelines for the member states regarding the FDIs and the free movement of capital from third countries and the protection of Europe's strategic assets, ahead of the application of the Regulation (the "Communication").
What is the rationale of the Communication?
In the framework of the pandemic, the Commission highlights the risk of acquisition of the strategic industries, including of the healthcare industry, this acquisition being made on the basis of the FDI. Moreover, the Commission wishes to protect the healthcare capacities (the ones for the production of medical equipment and/or protection equipment) and/or of the adjacent industries (with a focus on the ones developing vaccines) so that the loss of assets and critical technologies inside EU is avoided.
By issuing the Communication, the Commission requests the member states to be vigilant and to use all means which are put at their disposal both at an European and national level so that the critical technologies and the assets remain in the European space, as they are considered essential for the economy of the European Union as a whole.
As such, the Commission invites the member states to use all available mechanisms to evaluate all FDIs which could endanger the healthcare system or other critical industries. If the member states have not established at a national level independent bodies to assess the FDIs from the impact on the essential industries or healthcare industry, then, the respective member state must set up such an independent body.
The Regulation will be applicable in the member states starting with 11 October 2020. It establishes a set of standards and invites the member states to cooperate for the evaluation of FDIs from third countries, including state entities and undertakings carrying out activities in the member states. This type of evaluation is essential, the more so as in 2019, there have been significant investments from third countries in ITC and automotive industries, without any substantial evaluations having been made by European and/or national authorities. The Commission intends to analyse in depth future FDI which might affect essential industries such as healthcare, including the industry for the production of drugs, equipment or vaccines.
The Commission leaves at the appreciation of each member state the evaluation of the FDIs which would represent a threat for the essential industries.
According to the Communication, the member states may take different measures to prevent an investor from a third country to take control over a national enterprise if such investment would represent a threat to the security of the member states and of the European public order. A circumstance which endangers the security of the member states is the Pandemic.
How can the member states appreciate the risk for the security and public order?
To this extent, the member states and the Commission will analyse the effects which the respective FDI will have on the critical infrastructure, technologies and on the essential elements for maintaining the public order, the changes of which will lead to a significant impact inside the EU and/or the respective member state.
In light of this criterion, we consider that a FDI from a third country in an European undertaking which develops in an advanced stage a vaccine against Covid-19, might be rejected by the national and European authorities in this field.
However, the Communication provides the fact that the assessment of the respective FDI from the third countries does not automatically lead to the prohibition of the respective investment, as there are certain situations in which the respective investment might be performed but with a series of mitigating measures imposed by the authorities (in the above mentioned example, the FDI in the undertaking which focuses on a vaccine against Covid-19, this being in an advanced stage, may be allowed if certain conditions are fulfilled such as: the supply of the vaccine which has been tested, it being patented in the member state etc). In other cases, the member state may detain the so called "golden shares" in the respective undertakings, in view of exercising a "veto right' against a FDI. Such enjoyment must be necessary and proportionate in view of protecting a public order interest.
The Communication states that the verification mechanisms for FDIs are available in 14 member states. In Romania, the assessment is performed in accordance with the provisions of Law 21/1996 on competition and the verification authority is the Competition Council.
Are there any other types of investments which may be performed in an European undertaking if there are good chances that a FDI is rejected by a national and/or European authority?
There are other types of investments which are not considered to be a FDI, respectively "portofolio investments". These are analysed in accordance with the free movement of capital and do not award a right of control over an undertaking, meaning that they do not pose a significant risk on the order and security of the European space.
However, there are situations where, according to the national laws, the acquisition of a certain percentage in a company may guarantee to the respective investor certain rights which contradict the national and/or European public order.
As such, we are of the view that the portofolio investments regarding for example the listed companies will be carefully analysed in order to check as thoroughly as possible its consistency with the public order.
See paragraph 9 of the Regulation 2019/452
There is no doubt that Covid-19 pandemic is continuously creating significant challenges to which the business environment needs to respond quickly, in a manner mitigating the losses and fighting against the disruptions. The virus threat is likely to diminish, but businesses will be affected on medium and long terms. Therefore, the reorganization thereof may be seen as a way to help the businesses strengthen their resilience and adjust to the new environment.
In the current conditions, our opinion is that we will experience an increase of the corporate restructuring and reorganizations operations in the near future.
Please see below general remarks on corporate restructuring.
Why corporate restructuring?
First of all, corporate restructuring is an operation undertaken with the purpose to reorganize the structures of a company from legal, operational and management perspectives, so that the company becomes more profitable and organized for its current needs.
There are a number of reasons for which a company needs restructuring, these being: (i) reducing costs; (ii) incorporating new technology; (iii) focus on essential products; (iv) spin off as a subsidiary of a company; (v) merger with another company.
Which corporate restructuring mechanism is the most suitable?
For companies who are in financial distress, a corporate restructuring is a way to diminish the costs, thus avoiding the filing for insolvency. In this scenario, the company may identify its valuable assets, dispose of them and obtain thus liquidity to pay off its creditors or a secure a loan from a financial institution and avoid an imminent insolvency with all related consequences.
In this scenario, an asset sale is involved and/or a financial package in place, in which case the creditor generally requests that certain security is given by the debtor.
In other cases, the financial distress is not the cause of the corporate restructuring, but the need to consolidate its market position and/or become stronger by reorganizing its debts and operations. In this scenario, it is possible to renegotiate the terms of the debt with the creditors and/or spinning off those operations which are not at core of its business. Therefore, the company may focus on its essential operations and/or services and/or products.
The current economic and financial framework triggers one of the most dramatic consequences for the business environment, this being the "out of cash" date, where the respective company has a negative cash flow and is losing money every month as it does not have positive cash flow from its operations. In this scenario, the management team and/or the shareholders may need to take measures to save the business by cutting costs aggressively. As a consequence, the company may obtain loans to save the business. This was one of the preferred ways for the technology companies to save the businesses during the tech bust in the early 2000s.
Legal framework applicable in Romania
In Romania, the equivalent of the term "restructuring" is "reorganization". The principles of reorganization of legal entities are established by:
the provisions of articles 232-243 of the Civil Code;
the provisions of the Law 85/2014 on insolvency prevention procedure and insolvency (the "Insolvency Law"). In this case, the reorganization of the legal person is performed through a judicial procedure only for economic reasons of the debtor.
In the hereinafter, we will provide an overview of the legal framework provided by the Civil Code in respect of the reorganization of the legal entities.
The reorganization is the procedure is the legal operation having as purpose the establishment, modification or extinction of the legal person. The reorganisation provided by the Civil Code is not dependent upon the financial state of the company. There are various ways to achieve the reorganisation of a Romanian company, namely: 1) merger; 2) division; 3) transformation.
General aspects pertaining to each of the three (3) are summarized below:
Merger is the operation by which a company is being acquired by another company or represents the operation where several entities are merged in order to create a new company.
This operation is performed in two stages, namely
The first stage implies drafting a project of merger approved in accordance with the provisions of the constitutive act of the companies involved. The merger project must comprise various elements provided by Law 31/1990 on commercial companies ("Law 31").
The second stage implies the implementation of the merger by the management bodies. The merger will be lodged with the office of commercial registry where each involved company is registered.
Generally, a merger as a means to reorganize a company is used when a company intends to consolidate its position on the market, or when the intention is to have a higher quota on the local market, or to expand in other regions. One of its advantages towards other forms of reorganisation is the fact that it saves the business and the employees of the company. The protection of the workers in the context of the transfer of undertakings is to be taken into account.
By division, the entire patrimony of a legal person is divided between two existing legal persons or through legal persons who are set up through the division:
The division is total when the patrimony of the legal person is divided equally between the companies involved in the division, unless there is a contrary provision in the division project.
The division is partial when a part of the patrimony of an existing legal person is detached and is transferred to one or various existing legal entities or who are established to this extent.
In case of partial division, the effect of the division is the reduction of the patrimony, both from the perspective of its rights and assets on one hand and of its obligations on the other hand.
We emphasize that the effect of a division cannot be a legal entity with a different form than the one which is being divided (e.g. a not for profit entity like an association or foundation cannot be divided in limited liability companies).
The division is made when the group of companies is being reorganised or when the company intends to save costs by outsourcing support activities (such as IT, administrative) or when it closes its operations on a market for certain services in order to focus on another attractive market.
Whether the division is partial or total, the contracts will be transferred to all legal persons resulted from the division process so that the performance of each contract is made entirely by one legal acquiring legal entity.
Transformation of the legal person is the operation by which a legal person ceases to exist, whilst simultaneously a legal person is created. The rights and obligations of the legal person who ceased to exist are transferred to the newly created legal entity, safe for the case where the act on which the transformation was created, provides otherwise.
General aspects related to the transfer of rights and obligations pursuant to the reorganization of the legal person in Romania
It is useful to note that in all cases of reorganization of a Romanian legal entity, the transfer of the rights and obligations takes place at the date when this operation has been registered with the Commercial Registry. Starting with the registration date, the transfer between the parties and the effects towards third parties take place.
In case the immovable assets are object of the transmission, the ownership right as well as any accessory rights are acquired only after the registration with the relevant Land Book Registry on the basis of the reorganization act concluded in authenticated form, or, as the case may be, on the basis of the administrative act on which basis the reorganization has been made.
Covid-19 pandemic. What is next in the business environment?
Maintaining businesses or putting them back on track might require them to show great resilience.
A form of reorganization could be considered, to such extent that a business might emerge stronger after such an uncertain period.