The setting up of commercial companies

1. the conclusion of the constitutive act; 2. the incorporation of the company in the Register of Trade; 3. the publicity of the companys setting up.

1. The conclusion of the constitutive act

Any commercial company is set up by a company contract. This contract must fulfill the validity conditions requested for any contract, as follows: the capacity of the parties, the assent, the object and the consideration. Beside these general conditions, the company contract must fulfill three specific conditions: a. the contributions of the associates to the capital of the company; b. affectio societatis, meaning the will of the associates to participate in the performance of the common activity in order to obtain profits; c. the purpose obtaining and sharing the profits.

 The company contract has the following features: 1. it is a multilateral contract, meaning that it is concluded by two or more persons and each party undertakes certain obligations;

2. it is contract made by onerous title, because each associate wants to obtain a patrimonial benefit, namely the profits obtained through the performance of the common activity; 3. it is a commutative contract because the associates know from the very moment of concluding the contract which are their mutual obligations;
4. it is a formal contract, because it must be concluded in one of the forms required by the law.

The constitutive act of the company and its form

For the setting up of different types of companies are needed some forms:

general partnership or a limited partnership company contract company by shares, limited liability company company contract and articles of association limited liability company with sole associate articles of association

 As an exception, the constitutive act of the company must be concluded in authentic form (it must be authenticated by a public notary) in the following cases:

- land is contributed in kind to the registered capital of the company;

- the company by shares is set up by public subscription; - it refers to the setting up of a general partnership or a limited partnership.

The founders of a commercial company

The term founders is a common element for all the juridical forms of commercial companies. In order to become a founder, the person must fulfill two conditions, as follows: - he must have full concrete capacity; - he must not have been convicted of any criminal offence related to commercial activity such as forgery, use of forgery, breach of trust an so on.

The content

Regardless of the juridical form of a commercial company, its constitutive act must contain the following common elements:
- the identification elements of the associates;

- the firm of the company, its juridical form, the headquarters and the emblem of the company, if any;

- the companys object of activity, specifying the main field of activity; - subscribed and paid-up registered capital; - the bodies of decision, management and control of the company; - the manner in which the associates share the profit and the loss of the company;

- the time limit of the company; - the branches, agencies or other divisions without legal personality; - the ways for the dissolution and the liquidation of the company.

Beside these general elements, the constitutive act of a limited liability company must provide the number and the nominal value of the social parts as well as the number of social parts acquired by each associate on the basis of his contribution. The constitutive act of a limited partnership or a limited partnership by shares must provide in a distinctive manner the two categories of partners: active partners and sleeping partners.

The constitutive act of a company by shares or a limited partnership by shares must also mention:

- the number and the nominal value of shares; - the type of shares, meaning bearer shares or registered shares;

- the specific advantages of the sharesholders.

Beside these general elements, the constitutive act of a limited liability company must provide the number and the nominal value of the social parts as well as the number of social parts acquired by each associate on the basis of his contribution. The constitutive act of a limited partnership or a limited partnership by shares must provide in a distinctive manner the two categories of partners: active partners and sleeping partners.

The constitutive act of a company by shares or a limited partnership by shares must also mention:

- the number and the nominal value of shares; - the type of shares, meaning bearer shares or registered shares;

- the specific advantages of the sharesholders.

Specific aspects concerning the setting up of companies by shares

The companies by shares may be set up either by simultaneous subscription or public subscription. Concerning the simultaneous subscription, the setting up procedure is the same as for any other juridical form of commercial company. The setting up of a company by shares by public subscription means that the founders call for public funds in order to set up the company. Concerning the public subscription, the Law no. 31/1990 provides additional steps in the setting up procedure, as follows:

 1. drawing up the issue prospectus by the founders.

the prospectus must contain all the elements that are compulsory for the constitutive act of the company It must also provide the date when the subscription is closed. The prospectus has to be concluded in authentic form and be signed by all founders It must be registered within the Office of the Register of Trade prospectus which does not fulfill the above-mentioned conditions is sanctioned with the absolute nullity

 2. the subscription of shares

By subscription the subscriber accepts the offer of the founders as to become a shareholder of the company and to contribute in money to its registered capital, in exchange for shares.

 3. the Constitutive Meeting

Within 15 days from the date when the subscription is closed, the founders are obliged to convene the Constitutive Meeting by public notice published in the Official Monitor and in two newspapers.

Upon subscription, each subscriber must pay up at least 50 % of the value

of subscribed shares, while the rest may be paid within 12 months form the
date of companys incorporation

The founders are liable towards the company and third parties for: - the full subscription of the registered capital and its payment; - the existence of goods that are contributed in kind; - the accuracy of the publicity made in order to set up the company.

2. The incorporation of the commercial companies in the Register of Trade

Within 15 days from the conclusion of the constitutive act, the founders, the administrators or their representatives are bound to apply for the incorporation of the commercial company in the Register of Trade The incorporation is made on the basis of an application filled by the applicant and registered within the Office of the Register of Trade from the county where the company has the headquarters. After incorporation, the applicant is bound to obtain the necessary approvals provided by the law for the functioning of the company

3. The publicity of the setting up of commercial companies

After the incorporation, the applicant is obliged to publish the judgment of authorization provided by Register of Trade in the Official Monitor of Romania
This publicity has an opposability function, meaning that the law considers that the existence of the company is known by third parties form the date of the publication