A joint stock company (JSC, or SA in Romanian) can be set up by at least two shareholders. The share capital of a JSC may not be less than RON 90,000. Every 2 years, the Government can change the minimum value of the share capital by reference to the exchange rate, to keep this amount at the RON equivalent of EUR 19,355.

The share capital is divided into shares (in Romanian, ”actiuni”), each with a value of at least RON 0.1. The initial capital paid by each shareholder may not be lower than 30% of the subscribed capital. The remaining 70% of the subscribed share capital must be paid over a period which must not exceed 12 months from the incorporation date, where the shares have been issued in exchange for contributions in cash and 2 years where the shares have been issued in exchange for contributions in kind.

The shares are marketable titles and they can be nominal or bearer shares. Unless otherwise specifically provided by the Articles of Incorporation, shares are considered nominal. Ownership of nominal shares can be transferred under a statement made in the shareholders’ corporate register, with this transfer to be registered in the share certificate, whereas ownership of bearer shares can be transferred by simple remittance.

The General Meeting of Shareholders may be ordinary or extraordinary. An ordinary meeting is called at least once every year and no more than five months after the end of the previous financial year in order to:

  • discuss, approve and modify the annual financial statements after presentation of the report by the Board of Directors, or by the Management Board or Supervisory Board, by the censors or, as applicable, by the financial auditors and to establish the distribution of dividends;
  • appoint and revoke the members of the Board of Directors, or, as applicable, members of the Supervisory Board, and of the censors ;
  • set the remuneration of the Board of Directors’ members, or, as applicable, of the Supervisory Board‘s members and of the censors;
  • evaluate the performance of the Board of Directors, or of the Management Board, as applicable;
  • establish the budget and business plan for the next fiscal year;
  • decide on the pledging, leasing or dissolution of one or several of the company’s business units;
  • discuss any other issues on the agenda. In an ordinary general meeting, resolutions are adopted with the majority of the votes cast, on condition that the shareholders, whether present or represented at the meeting, represent at least ¼ of the share capital. The Articles of Incorporation may contain a higher quorum and majority. If an ordinary general meeting is unable to adopt the resolutions because the minimum quorum has not been met, the meeting is called for the second time and may then decide irrespective of the quorum, with the majority of the votes cast. For the second calling, the Articles of Incorporation may not contain a minimum quorum or higher majority.

An Extraordinary General Meeting of Shareholders is called whenever it is necessary to adopt a resolution for the amendment of the company’s Articles of Incorporation or to debate any resolution which requires the approval of an extraordinary general meeting.

A resolution to amend the company’s main object of activity, to decrease or increase the share capital, to change the company’s legal structure or to merge, spin-off or dissolve the company can only be taken with a majority of at least 2/3 of the voting rights exercised by present or represented shareholders, if a higher majority is not stipulated within the Articles of Incorporation.

The Company Law provides certain protective measures for shareholders such as:

  • The right to challenge in court the resolutions of the General Meeting of Shareholders if irregularities have taken place ( non-compliance with the procedures for the calling of the General Meeting of Shareholders, resolutions adopted without meeting the quorum requirements etc.).
  • The right of the shareholders who vote against a resolution of the General Meeting of Shareholders to withdraw from the company and to require the purchase of their shares by the company, where the object of such a resolution is related to the amendment of the company’s main object of activity, relocation of the company’s registered office abroad, change of the company’s legal structure, or a merger or spin-off of the company.
  • The right to consult, at the company’s registered office, the annual financial statements, the Board of Directors’ annual report, or, as applicable, the report of the Management Board and of the Supervisory Board, as well as any proposal concerning the distribution of dividends, starting from the calling date of the General Meeting. On request, shareholders can obtain copies of these documents
  • Shareholders holding at least 10% of the share capital may apply to a court for the appointment of an expert to analyse certain activities of the company and to present the conclusions to the Board of Directors, the Management Board or Supervisory Board, as well as to the censors or the internal auditors of the company, as applicable, in order to propose appropriate measures.
  • Shareholders holding at least 5% of the share capital may raise complaints to the censors or internal auditors about facts which, they believe need to be checked. If the complaint is well founded, the censors, the Board of Directors, or the Supervisory Board, as applicable, must call a General Meeting
  • Shareholders who, individually or together, represent at least 5% of the share capital may lodge a compensation claim in court in their own name, but on behalf of the company, against the founders, directors, and managers, or against the members of the Management Board and Supervisory Board, for any prejudice caused to the company.

Joint stock companies may now choose between two alternative management systems, i.e. the one-tier or the two-tier management system, depending on which best serves their interests.

The one-tier management system

The company’s management is made up of a sole director or a board of directors (at least 3 directors for companies subject to a mandatory financial audit) who can delegate the company’s management to managers and/or the General Manager. The board of directors may be formed of nonexecutive members, i.e. those who have not been appointed as managers, as well as executive members, who thus combine two offices; that of a director with that of a manager of a company.

The two-tier management system

Management is ensured by a supervisory board and a management board. The management board bears exclusive responsibility for the management of the company and is formed of one or several members, with a minimum of 3 members for companies subject to a mandatory financial audit.

Where a director has been designated to hold such a position from among the company’s employees, the employment contract will be suspended during the director’s term of office. The directors and the members of the Management Board or of the Supervisory Board must conclude professional liability insurance agreements.

The managers of joint stock companies in the one-tier management system and the members of the Management Board in the two-tier management system must be individuals. Legal entities can be appointed as directors or members of the Supervisory Board of joint stock companies, but in this case they must appoint a permanent individual representativ

The Board of Directors may delegate the executive management of the company to one or several managers, with one of them appointed as general manager. Where the actual management of a joint stock company is delegated to one or several managers, most of the Board of Directors members will be non-executive members.

The delegation of a company’s management is mandatory for companies whose annual financial statements must be subject to financial auditing. Managers are responsible for the day-to-day operations of the company within the limits of the company’s object of activity.

The Supervisory Board may set up advisory committees formed of at least two members of the Supervisory Board who are in charge of making investigations and recommendations in areas such as audit, the remuneration of the Management Board and Supervisory Board members and of employees, or the nomination of candidates to management positions. At least one member of the Audit Committee should be an independent director and at least one member should have accounting financial experience.

Joint stock companies whose annual financial statements are not subject to a financial audit by law or by resolution of the shareholders must appoint at least three censors and one deputy. Censors must certify the annual financial statements and present a report to the annual general meeting of shareholders.

The financial statements of companies subject to a financial audit must be verified and certified by financial auditors registered with the Romanian Chamber of Financial Auditors, and in this case the provisions on censors’ activity will no longer be applicable.