Donated by a Lex Mundi member firm. LEX MUNDI, LTD. The World's Leading Association of Independent Firms. http://www.lexmundi.com Main relevant requirements for a joint stock and a limited liability company as per the Company Law

Nestor Nestor Diculescu Kingston Petersen www.nnkp.com Lex Mundi Member for Romania

Form of company No. Topic Joint stock company (SA) Limited liability company (SRL) 1 Limitation on the number of - Minimum number – 5 - Minimum number - no limitation; an SRL can be established shareholders/associates by a sole associate - Maximum number – no limitation - Maximum number – 50 2 Main restrictions regarding - No restriction as to nationality - No restriction as to nationality shareholders/associates - A natural or may be sole associate in only one SRL - An SRL with sole associate may not have as sole associate another SRL with sole associate - Restrictions with respect to the possibility of an associate to be associate in competing 3 Minimum registered capital ROL 25,000,000 ROL 2,000,000 Registered capital payment - At least 30% of the nominal value of the shares subscribed must be - Entirely paid in at subscription requirements (at capital paid-in at subscription by each subscribing shareholder, and the increases) balance has to be paid-in within maximum 3 years from the date when the decision of the General Meeting of Shareholders for the approval of the capital increase was published in the Official Gazette - When there is an issuance premium, it must be entirely paid-in at subscription 4 Minimum nominal value of ROL 1,000 ROL 100,000 shares/social parts Form of company No. Topic Joint stock company (SA) Limited liability company (SRL) shares/social parts

5 Shares/social parts - Shares are typically ordinary shares (nominative or bearer) - Social parts are of only one type - Preferential shares, with priority dividends but without voting rights; the number of such shares may not exceed _ of the registered capital - Shares may be pledged and may be subject to usufruct rights - Social parts may not be pledges and usufruct rights may not be granted 6 Rights granted by the Equal rights Voting rights and dividend rights may be different shares/social parts 7 Transferability of shares/social Shares may be negotiable titles Social parts may not be negotiable titles parts Transfer is, by law, free The transfer of social parts is allowed between associates; the transfer of social parts to third parties is allowed only with the approval of associates (representing _ of the registered capital) 8 Bonds An SA may issue bonds (maximum amount _ of the registered capital) An SRL may not issue bonds 9 Governing and management - General Meeting of Shareholders (GMS) - General Meeting of Associates (GMA) bodies - Sole Administrator/Council of Administration - Sole Administrator/Council of Administration - Directors’ Committee - [Censors’ Commission] - Censors’ Commission 10 General meeting of GMS can be ordinary or extraordinary – split of responsibility and Decisions of associates are made within GMA shareholders/associates competencies specified by law Form of company No. Topic Joint stock company (SA) Limited liability company (SRL)

Quorum/decision making requirements for Ordinary GMS: - GMA decides by the vote representing the absolute majority of associates and of social parts, unless the constitutive act - for the first summoning – the presence of shareholders representing provides otherwise 1 at least half of the registered capital; decisions can be made with the vote of shareholders representing the majority of the registered - Modifications of the constitutive act are made with the vote capital present at the meeting, unless the company’s Constitutive of all associates, unless the law or the constitutive act Act or the law provides for a higher majority provides otherwise - for the second summoning – in the case the GMS at first summoning - Decision to transfer social parts to third parties (non- did not meet the quorum requirements as mentioned above, the associates) must be made with the vote of associates GMS which shall be convened, after a second summoning, may representing _ of the registered capital decide on the problems on the agenda of the first meeting - In case the legally constituted GMA cannot make decisions irrespective of the percentage held by the present shareholders, and due to failure to meet the necessary majorities, the GMA re- the decision making is valid with the majority of votes summoned may decide on the issues on the agenda irrespective of the number of associates present and the percentage of registered capital they represent Quorum/decision making requirements for Extraordinary GMS: - for the first summoning – the presence of the shareholders representing _ of the registered capital, unless the company’s Constitutive Act provides otherwise; decisions can be made with the vote of the shareholders representing at least half of the registered capital - for the subsequent summoning – the presence of shareholders representing half of the registered capital, unless the company’s Constitutive Act provides otherwise; and decisions can be validly made with the vote of shareholders representing at least one third of the registered capital 1 An amendment to the Company Law in April 2003 modified the double majority requirement by adding “unless the constitutive act provides otherwise”. Due to certain inconsistency triggered by the said amendment by correlating different provisions of the Company Law, the meaning of such modification may be debatable. In the absence of a practice (which has not had time yet to have been created) we generally advise our clients which are associates in a limited liability company to maintain the double majority requirement for avoiding potential challenges based upon the interpretation that the amendment to the Company Law would refer to “unless the constitutive act provides for a higher majority” rather than to a loosening of the legal requirements. Form of company No. Topic Joint stock company (SA) Limited liability company (SRL) made with the vote of shareholders representing at least one third of the registered capital

11 Administrators - Can be natural or legal persons - Can be natural or legal persons - One or more administrators (consequently, Sole Administrator or - One or more administrators (consequently, Sole Council of Administration) Administrator or Council of Administration) - Administrators are elected and revoked by the GMS - Administrators are elected and revoked by GMA - No restriction with respect to nationality - No restriction with respect to nationality - A person may not be a member of more than three Councils of - Restrictions with respect to the possibility of an administrator Administration at the same time to be administrator in competing companies - Council of Administration shall meet at least once a month - The decisions are validly made in the presence of at least half of the number of administrators, unless the Constitutive Act provides for a higher number - The decisions are made with the majority of the present members - Unless the constitutive act provides otherwise, the president of the Council of Administration shall have the casting vote in case of equality; if the president does not have such authority by the constitutive act, then the proposal submitted to the vote shall be considered rejected - The GMS can delegate part of its responsibilities (expressly listed by the Company Law) to the Sole Administrator/Council of Administration 12 Directors’ Committee The Council of Administration may delegate some of its competencies to a Directors’ Committee, which consists only of administrators members of the Council of Administration 13 Censors’ Commission Compulsory to have a Censors’ Commission (3 members + 3 Not compulsory for SRLs with less than 15 associates (optional replacements) for the verification and control of a company’s financial an external auditor can be appointed) administration or and/or a financial auditor (as the case may be) Form of company No. Topic Joint stock company (SA) Limited liability company (SRL) administration or and/or a financial auditor (as the case may be) Compulsory for SRLs with more than 15 associates

14 Minority - Shareholders representing 10% of the registered capital, or a lower - Associates representing at least 25% of the registered capital shareholders’/associates’ rights quota in case the Constitutive Act so provides, can request the can request the summoning of a GMA summoning of a GMS - The shareholder which, in a certain operation, has directly or - An associate may not exercise its voting right in the GMA indirectly an interest contrary to that of the company must refrain with respect to its own in kind contributions or with respect from voting that operation to legal acts concluded between itself and the respective company - GMS decisions contrary to the law or to the company’s constitutive - GMA decisions contrary to the law or to the company’s act may be challenged by any shareholder that was not present at the constitutive act may be challenged by any associate that was meeting or that voted against and required this to be mentioned in not present at the meeting or that voted against and required the minutes of the meeting this to be mentioned in the minutes of the meeting - A shareholder may complain to the censors about any fact which it - In the absence of censors, any associate which is not thinks may need verification, and the censors must undertake the administrator shall exercise certain verification rights verification; if the complaint is made by shareholders representing more than _ of the registered capital, or a lower percentage if the constitutive act provides for it, the censors must disclose the findings of their verification - Provision of information to shareholders - If the administrator executes legal acts which damage the company and the company, due to the position he holds, does not act towards the recovery of the damage, any minority shareholder has the right to initiate court action on behalf of the company for the recovery of the damage