Government plans big shake-up for Romanian companies

In early September 2025, the Government fast-tracked a wide-ranging Draft Law through Parliament, bundling fiscal recovery measures with one of the most ambitious updates to company law in recent years. The Draft Law is now[1] under constitutional review, with a ruling expected on 24 September. If cleared, the President is obliged to sign it into law within 10 days.

by Cosmina Simion, Managing Partner and Flavia Mincu, Associate la WH Simion & Partners

Flavia Mincu, Associate la WH Simion & Partners

Cosmina Simion, Managing Partner WH Simion Partners

The proposed package touches both limited liability companies (LLCs) and joint-stock companies, introducing new financial discipline rules that could significantly change how businesses are structured and financed.

What’s on the table

• a minimum share capital for LLCs,
• tighter rules for transferring control in LLCs,
• restrictions on intra-group loans,
• sanctions for maintaining a negative net asset position,
• stricter conditions for dividend distribution.

1. Minimum share capital makes a comeback

Although currently there is no legal minimum share capital for LLCs, starting from the law’s entry into force, the minimum share capital is set based on the level of net turnover reported in the annual financial statements for the previous financial year.

Specifically:

• For LLCs that have registered a net turnover exceeding RON 400,000, the minimum share capital is RON 5,000.
• For newly established LLCs, the minimum share capital is RON 500.

Deadline for the share capital increase

The share capital must be increased by the end of the financial year following the one in which the net turnover above RON 400,000 was reported.

Existing LLCs that exceed the mentioned threshold have a maximum period of 2 years from the law’s entry into force to align their share capital with the new legal minimum, by amending the articles of association.

Any subsequent decrease in net turnover does not affect the minimum share capital value – once increased to RON 5,000, it remains at that level.

Sanction for non-compliance

Failure to comply with the obligation to increase the share capital to RON 5,000 within the prescribed term may lead to the dissolution of the company ordered by the court at the request of any interested person or Trade Register Office (ONRC). However, the company will not be dissolved if, before the dissolution court decision becomes final, the share capital is brought to the legally required minimum.

2. Control transfers under tighter watch

The transfer of shares made by the shareholder who holds the control over an LLC is enforceable against the central tax authority under the following conditions:

• Notification of the central tax authority

Within 15 days from the date of the transfer, the transferor, transferee or company shall notify the central tax authority of (i) the share transfer agreement and (ii) the updated articles of association reflecting the identification details of the new shareholders.

• Creation of guarantees

If the company registers outstanding tax liabilities, as well as other budgetary claims recorded in enforceable titles issued according to the law and registered with the central tax authority for recovery, the company or the assignee must create guarantees according to the Fiscal Procedure Code.

The guarantees consist of cash deposit with a State Treasury unit and/or letter of bank guarantee / guarantee insurance policy and must cover the outstanding liabilities stated in the tax certificate.

• Approval from the central tax authority

To register the transfer of shares in the Trade Register, companies in the above-mentioned situation must provide proof of the central tax authority’s approval regarding the creation of guarantees.

Verification of conditions by the Trade Register

Compliance with these conditions is verified upon registration in the Trade Register of the controlling stake transfer.

What happens if the debts are not paid

If the payment obligations recorded in the tax certificate are not settled within 60 days from the registration of the transfer in the Trade Register, the central tax authority will enforce the guarantees created in relation to such obligations.

An important detail to note

This procedure does not affect the validity of the controlling stake transfer but may lead to delays or refusal of the registration in the Trade Register of the new shareholding structure, thus affecting the enforceability of the transfer against third parties.

3. Intra-group loans – restrictive rules

Companies distributing quarterly dividends cannot grant loans to shareholders or other affiliates until the differences resulting from the distribution of dividends throughout the year are regularized.

Companies which, based on their annual financial statements approved according to the law, record a negative net asset position (i.e. below half of the subscribed share capital) cannot repay loans received from shareholders or other affiliates.

Sanction for non-compliance

Failure to comply with these prohibitions results in the joint liability of the company and the shareholder who benefited from the payment of interim dividends (without regularization) or loan repayments while the company had negative net asset (i.e. below the limit provided by law).

The company and the shareholders are jointly liable for the company’s outstanding budgetary obligations managed by the central tax authority, up to the amount of the loans granted or repaid.

Furthermore, the company’s failure to comply with these prohibitions represents an administrative offense and is sanctioned by ANAF with a fine ranging from RON 10,000 to RON 200,000.

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4. Negative net asset – from civil risk to administrative offense

Current situation – the risk of dissolution

Currently, if it is found that, as a result of losses recorded in the annual financial statements approved according to the law, the net assets have decreased to less than half of the subscribed share capital, the company must either (i) decide its dissolution or (ii) if continues its activity, remedy the negative net asset by the end of the financial year following the one in which the losses were recorded.

Otherwise, any interested person may request the dissolution of the company by court’s decision. However, the company will not be dissolved if it remedies the negative net asset issue until the dissolution court decision becomes final.

New under the Draft Law – administrative offense

According to the Draft Law, the company’s failure to comply with the obligation to restore the net assets to at least half of the share capital within the prescribed term represents an administrative offense and is sanctioned by ANAF with a fine ranging from RON 10,000 to RON 200,000.

5. Mandatory debt-to-equity swap

Perhaps the boldest measure: if a company owes money to its shareholders and still fails to restore its equity, it will be obliged to convert those debts into shares within 2 years.

Specifically, companies that:

• have debts to shareholders resulting from loans or other financing granted by them and
• do not remedy the negative net asset issue within the legal term

are required to increase the share capital by converting these receivables into equity, with the observance of the shareholders’ pre-emption rights, within 2 years from the end of the financial year following that in which the losses were recorded.

Sanction for non-compliance

Failure by the company to comply with this obligation represents an administrative offense and is sanctioned by ANAF with a fine ranging from RON 40,000 to RON 300,000.

Who is exempt

This obligation does not apply to shareholders in the following situations, provided that, in any of these situations, the loans are not repaid to the shareholders within 4 years from their granting:

• They have the purpose or business scope of investing or managing alternative investment funds or qualifying venture capital funds and are entities that belong to groups such as alternative investment funds, qualifying venture capital funds or are managers of such funds;
• They have the purpose or main business scope of investing, holding participations in companies or financing on a professional basis the companies in which they hold shares (NACE 64);
• They qualify as professional investors, as defined under Directive 2014/65/EU;
• They are investors in a crowdfunding project, as defined under Regulation (EU) 2020/1503, either directly or indirectly, through an entity that directly holds a stake in such project; or
• They are natural persons who (i) have invested an amount between EUR 2,500 and EUR 200,000 in a micro or small enterprise and (ii) do not hold, directly or indirectly, more than 25% of such company’s share capital.

This obligation also does not apply to financing of companies through European or national funds allocated based on projects supporting the private sector, and from financing granted by international financial institutions.

6. No dividend distribution for struggling companies

Lastly, dividend distribution would be banned altogether for companies whose net assets have fallen below half their subscribed share capital, until they bring their books back into line.

Specifically, if the annual or, as the case, interim financial statements reflect a negative net asset, the company cannot distribute dividends (annually or quarterly) until the net asset is restored to the minimum legal value.

Why it matters

If adopted, the law would push Romanian companies towards stronger capitalization, limit “creative” intra-group financing, and give the tax authority more leverage over corporate restructuring. The companies may also face greater risks if they ignore the new rules, being exposed to civil or administrative penalties.

[1] Namely, on the date on which this article was prepared.