A European technology company opens a Romanian subsidiary to access talent and EU funding. Six months in, its parent board discovers that none of the local board resolutions were properly documented, the articles of association were never updated after a director change, and the registered office address lapsed. The result: blocked bank accounts, an unenforceable shareholder resolution, and a forced extraordinary general meeting – all while a competitor closes the same market opportunity. Corporate governance failures in Romania carry direct commercial costs. They are also almost entirely preventable.
Corporate governance in Romania is governed by Romanian corporate legislation, which sets mandatory obligations for boards of directors, shareholder meetings, and the maintenance of constitutional documents. A company must keep its articles of association current, hold documented general meetings at least annually, and file material changes with the Oficiul Registrului Comerțului (Trade Registry) within prescribed deadlines. Non-compliance can render board decisions void and expose directors to personal liability under Romanian law.
This guide explains the step-by-step governance process, the documentary requirements at each stage, the most frequent errors made by international clients, and a practical decision checklist for structuring governance across different business scenarios in Romania.
The Romanian corporate governance system: what international boards need to know
Romania operates a civil law system. Its corporate legislative regime draws on continental European traditions, with strong influence from French and Italian company law. International clients familiar with common law concepts – board resolutions by written consent, flexible articles, informal governance – face a meaningful adjustment.
Romanian corporate legislation distinguishes between two principal company forms used by international investors. The societate cu răspundere limitată (SRL, or limited liability company) is the most common vehicle for subsidiaries and joint ventures. The societate pe acțiuni (SA, or joint stock company) applies to larger operations and regulated entities. Each form carries distinct governance obligations, particularly regarding board structure and decision-making thresholds.
The SRL is managed by one or more administrators (administratori), who hold powers equivalent to executive directors under common law. The SA may adopt either a unitary governance model – with a board of directors (consiliu de administrație) – or a two-tier model with a directorate (directorat) and a supervisory board (consiliu de supraveghere). The choice between these models must be stated in the articles of association and registered with the Trade Registry.
Romanian corporate legislation places personal liability on directors for decisions that cause loss to the company or its creditors. This liability is direct: it does not require piercing a corporate veil. Practitioners in Romania note that courts have applied this provision actively in insolvency proceedings, reaching director assets even where the company was properly capitalised at incorporation.
For international businesses structuring Romanian operations. Understanding corporate law in Romania at the outset. rather than retrofitting governance after problems arise. determines whether the entity functions as a reliable commercial tool or becomes a source of liability.
Step-by-step: establishing and maintaining governance in a Romanian company
The governance lifecycle in Romania runs through four distinct phases: incorporation and constitutional documents, ongoing board and shareholder obligations, filing and registration of changes, and annual compliance. Each phase has its own procedural requirements and timelines.
Phase 1 – Incorporation and constitutional documents
Company registration in Romania begins with drafting the articles of association. This document must be authenticated by a Romanian notary public (notar public) for an SA. Alternatively. Authenticated or concluded in private written form for an SRL, depending on whether immovable property is contributed as share capital. The articles must specify the registered office address, the identity and powers of directors, the share capital, and the decision-making rules for the general meeting.
The registered office must be a real, physically accessible address in Romania. A virtual office address is permissible under Romanian law, but the company must be able to receive official correspondence there reliably. Failure to maintain an active registered office can result in the Trade Registry initiating dissolution proceedings.
Once the articles are executed, the founding shareholders adopt an act constitutiv (constitutional act) that also records the first shareholder resolution appointing directors. This resolution, together with the directors' declarations of eligibility and proof of share capital deposit, is submitted to the Trade Registry. Registration typically takes five to fifteen business days. Foreign directors must provide apostilled identity documents and, where required, a criminal record certificate.
Phase 2 – Ongoing board and shareholder meeting obligations
After incorporation, Romanian corporate legislation imposes a continuous cycle of governance obligations. The board of directors must meet with the frequency required by the articles, but at minimum whenever a decision falls within its competence. Each meeting must produce written minutes, signed by all participants or by the chairman, depending on the form chosen in the articles.
The general meeting of shareholders (adunarea generală) must convene at least once per year to approve the annual financial statements, the profit distribution or loss allocation, and the discharge of directors. For an SRL, the general meeting is the principal governance body: it approves all matters exceeding the day-to-day administration of the company. Shareholder resolutions must be documented and, where they affect the articles of association, notarised and filed with the Trade Registry.
The convening notice for a general meeting must be sent to shareholders within the timeframe specified in the articles – typically ten to thirty days before the meeting. The notice must state the agenda. Resolutions on matters not included in the agenda can be challenged and set aside by Romanian courts. This is a frequent trap for international clients who add items at the meeting itself.
Phase 3 – Filing changes with the Trade Registry
Any amendment to the articles of association. change of directors, change of registered office, change in share capital. Change in company objects. must be filed with the Trade Registry within fifteen days of the relevant decision. Late filing triggers administrative fines. More critically, until the change is registered, it cannot be relied upon against third parties.
Director appointments and removals deserve particular attention. A new director may begin acting for the company from the date of the shareholder resolution. However, the appointment is effective against third parties only from the date of Trade Registry registration. An outgoing director who is not removed from the register – even if dismissed by shareholder resolution – may still bind the company to third parties acting in good faith. International boards often overlook this gap between internal and public effectiveness.
Phase 4 – Annual compliance obligations
Every Romanian company must submit annual financial statements to the relevant public authority within prescribed deadlines after the financial year end. Listed companies and larger entities have additional reporting obligations. Companies that fail to submit financial statements for two consecutive years risk Trade Registry dissolution proceedings. Practitioners in Romania note that such proceedings are increasingly enforced, and reinstating a dissolved company is both costly and time-consuming.
For a detailed view of transaction-level governance obligations, including merger approvals and shareholder rights in acquisition contexts, the firm's analysis of mergers and acquisitions in Romania addresses these scenarios specifically.
To receive an expert assessment of your company's governance position in Romania, contact us at info@ferrazwhitmore.com.
Common errors by international clients – and their consequences
International businesses entering Romania frequently make the same category of mistakes. Each has a predictable cost.
Treating the articles of association as a one-time document. Many foreign investors draft articles at incorporation and never revisit them. In practice, business reality diverges from the articles within twelve to eighteen months: new directors are appointed informally, decision-making thresholds become outdated, and the share capital structure changes through side agreements. When a dispute arises – or a bank requires certified governance documents – the gap between the articles and actual governance creates immediate exposure. Romanian courts apply the articles as written. Decisions that contradict the articles can be annulled.
Appointing non-resident directors without understanding their obligations. A director does not need to reside in Romania to be appointed. However, a non-resident director must still sign Romanian-law documents, be available for Trade Registry filings, and hold personal liability under Romanian corporate legislation. Many international companies appoint a nominee director to satisfy local presence requirements, then discover that the nominee has no authority to act on substantive matters – creating a governance paralysis at the point of execution.
Relying on oral board decisions. Romanian corporate legislation requires written minutes for all board and general meeting decisions. An oral agreement between all shareholders – even if unanimous – has no legal effect on company decisions. Where a company has operated on oral consensus for years. Retroactively documenting those decisions is possible but requires care: backdated minutes that do not match the actual chronology of events can raise questions of authenticity during due diligence or litigation.
Missing the fifteen-day Trade Registry filing window. The fifteen-day deadline for filing changes is strict. Administrative fines for late filing are relatively modest individually, but they accumulate and are recorded in the company's Trade Registry file. During an M&A due diligence process, a history of late filings signals governance weakness and can affect valuation or trigger conditions precedent.
Overlooking the beneficial ownership register. Romanian legislation requires companies to maintain a register of ultimate beneficial owners and submit this information to the relevant authority. Non-compliance carries fines and, in serious cases, can affect the company's ability to participate in public procurement and access EU funding. Foreign parent companies often discover this obligation only when their Romanian subsidiary applies for a contract that requires a clean compliance certificate.
A non-obvious risk for groups with multiple Romanian entities: intercompany transactions and cash pooling arrangements require proper board authorisation and may trigger conflict-of-interest provisions under Romanian corporate legislation. A director who is also a director of the contracting counterparty must disclose that interest and may be prohibited from voting. Failure to comply renders the transaction voidable and creates director liability.
Self-assessment checklist before initiating or restructuring governance in Romania
This governance approach in Romania is applicable if the following conditions are present. Use this checklist before engaging counsel or filing any documents.
Initial setup – applicable if:
- The entity is being incorporated for the first time in Romania
- A foreign company is opening a Romanian branch or subsidiary
- An existing Romanian company is being acquired and governance is being reset
Verify before proceeding:
- The chosen company form (SRL or SA) matches the commercial and ownership structure
- The articles of association reflect actual decision-making authorities and thresholds
- The registered office is an active, legally compliant address in Romania
- All directors have provided apostilled identity documents and eligibility declarations
- The beneficial ownership register has been completed and filed
Ongoing governance – applicable if:
- A director has changed, resigned, or had powers modified since incorporation
- Share capital or shareholder composition has changed
- The company's business activities have expanded beyond its registered objects
Decision framework by scenario:
Scenario A – Single-shareholder SRL with one non-resident director: All board decisions must be in writing. The shareholder's resolutions serve as both the general meeting and the board where no separate board is constituted. Any change to director powers must be reflected in an updated articles of association and filed within fifteen days.
Scenario B – Joint venture SA with two-tier governance: The supervisory board must approve all matters reserved to it by the articles. The directorate acts within its delegated authority. Conflicts between the two bodies must be resolved by the general meeting. Practitioners in Romania note that poorly drafted competence boundaries between the directorate and supervisory board are the most common source of JV governance disputes.
Scenario C – Romanian subsidiary of a listed foreign parent: Romanian corporate legislation imposes its own disclosure and approval requirements alongside those of the parent's home jurisdiction. Related-party transactions, director conflicts of interest, and material changes to the subsidiary's governance require dual compliance. When the trigger is a trade sale or restructuring. The matter may shift from routine governance into M&A transaction governance. typically indicated when any shareholder acquires or disposes of more than a threshold percentage of share capital.
For comparison with governance obligations in other EU civil law systems, the firm's guide to corporate governance in Portugal examines analogous requirements under Portuguese corporate legislation and highlights where the two regimes diverge.
For a tailored strategy on governance restructuring or ongoing compliance in Romania, reach out to info@ferrazwhitmore.com.
Frequently asked questions
Q: How long does it take to register a company in Romania and set up its governance documents?
A: Company registration in Romania typically takes between five and fifteen business days once all documents are submitted to the Trade Registry. Drafting the articles of association, resolving the registered office address, and obtaining any required apostilles for foreign directors can add two to four weeks. International clients should budget four to six weeks for the full process from initial instruction to a fully operational entity.
Q: Must Romanian board meetings be held in Romania?
A: Romanian corporate legislation does not require board meetings to be held physically on Romanian soil, unless the articles of association specify a location. However, minutes must be recorded and signed in the manner prescribed by the articles, and the registered office must be maintained in Romania. Many international boards hold meetings remotely, but the minutes must still comply with Romanian formality requirements to be valid.
Q: A common misconception is that a sole director can run a Romanian company without any governance formalities – is that accurate?
A: This is a misconception. Even a sole-director limited liability company in Romania is bound by corporate legislation obligations: resolutions on key matters must be documented. Annual financial statements must be approved by the general meeting. Additionally, any changes to the articles of association require notarisation and Trade Registry filing. Failure to observe these formalities can expose the director personally and render corporate decisions unenforceable.
About Ferraz & Whitmore
Ferraz & Whitmore is an international law firm based in Lisbon, advising business clients across 46 jurisdictions. Our team combines Portuguese civil law expertise with English common law tradition to deliver cross-border legal solutions in corporate governance, board compliance, and company registration matters in Romania and across the EU. We work with international entrepreneurs, institutional investors, and in-house legal teams who need results-oriented counsel across multiple legal systems. Engaging a lawyer in Romania with cross-border experience matters when governance failures carry direct personal and commercial consequences. As an international law firm supporting Romanian operations, Ferraz & Whitmore assists clients at every stage – from drafting the articles of association to restructuring the board of directors of an established subsidiary. The firm's corporate law practice covers 46 jurisdictions, supported by a network of local counsel in Romania and Central and Eastern Europe. Our attorneys have advised on governance and corporate compliance matters across both civil law and common law systems. To discuss your situation, contact us at info@ferrazwhitmore.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.