Romania has been put in the spotlight by certain changes in tax regulation introduced at the beginning of 2017 and 2018. We are talking about the tax amount of only 3% on a turnover of up to 1.000.000 euros that makes Romania a very attractive option, even for online investors with higher incomes. The main options you may have as an entrepreneur in Romania are to register a limited liability company (or SRL according to the Romanian acronym) or a joint stock company (SA).
We are going to help you to make the best decision by highlighting the differences between them.
The joint stock company is the company whose share capital is divided into shares, and the social liabilities and debts are guaranteed by the social patrimony; shareholders are only responsible for their contribution. The joint stock company is a capital company, the key element is the share of capital invested by the shareholder.
In the limited liability company the social liabilities and debts are also guaranteed only by the social patrimony, but the founding of company is based on the trust and quality of the shareholders.
The number of stockholders in the joint stock companies may not be less than 2 (two). The law does not require for this type of company a maximum number of shareholders.
On the other hand, limited liability companies can have a sole shareholder. The law establishes that the number of shareholders may not exceed 50. Of course, most of the LLCs (SRLs) have no more than 4 or 5 shareholders.
In both cases, shareholders may be either Romanian or foreign natural persons or legal entities.
The required share capital for the establishment of a limited liability company can not be less than 200 lei (around 50 euros) and it is divided into equal parts; for the joint stock companies the share capital can not be less than 90.000 lei (around 19.000 euros).
Cash contribution is mandatory for both forms. Contributions in nature must be economically evaluable being admitted to both types of company and are paid by transferring the appropriate rights and by effectively delivering the goods in use of the company. Labor or service benefits cannot constitute contribution at the formation or increase of the share capital.
From the business management point of view, the joint stock company (SA) is managed by one or more administrators, the number being always uneven. However, companies whose financial statements are subject to a statutory audit obligation are required to be managed by at least 3 directors. When there are more directors, they constitute a board of directors.
LLC (SRL) is managed by one or more directors (administrators/managers), associates or non-associates, appointed through the Articles of incorporation or by the general meeting of shareholders. In practice, although the law does not explicitly raises this possibility, it is customary to set up a board of directors.
Regardless of the company type you choose to set up, you need to take into account the issues that differentiate them and the benefits from each business strategy. By contacting us, TAS Registration can guide you thorughout the entire process of launching a business.