Legal obligation to organize internal auditing
All Romanian companies whose annual financial statements are subject to statutory auditing must organize an internal audit in accordance with the applicable legal standards. However, this can also be beneficial for others.
Competition law: focus on abuse of a superior negotiating position
In June 2024, the Romanian Competition Council announced for the first time an ex officio investigation into the alleged abuse of a superior bargaining position by a supplier of liquid oxygen to the detriment of a hospital. This was followed shortly afterwards by an unannounced audit of a company in the pharmaceutical industry. The Competition Council also focused on other situations, such as car repair shops, whose repair invoices must be accepted in full by the insurer in the context of liability insurance claims, in accordance with the law. Until recently, only the abuse of a dominant market position fell under the jurisdiction of the Competition Council. In addition, there is now the exploitation of a “superior negotiating position".
Prolongation/relocation of registered offices - a difficult procedure?
It is often the “simple” issues that can cause problems in practice. This concerns, among other things, the duration of the right to use a company's registered office in Romania. If this expires, the Romanian tax authorities can quickly take drastic measures with regard to the company. The same applies to the relocation of the registered office that has to be entered in the commercial register. Currently, however, the extension or relocation of a company's registered office has become more difficult.
Electronic signature in employment relationships
The urge for flexibility in labor relations, which has been omnipresent since the coronavirus at the latest, has led to an increasing number of legal transactions in labor law being concluded in absentia. In this context, electronic signatures are playing an increasingly important role. Although new basic regulations regarding e-signatures came into force on 08.10.2024, some special regulations apply in employment law.
CBAM reporting: A new step in EU environmental policy
What does CBAM reporting involve? The Carbon Boundary Adjustment Mechanism (CBAM) was introduced by the EU as part of its ongoing efforts to combat climate change. Regulation (EU) 956, which comes into force in October 2023, aims to regulate carbon emissions from goods imported into the EU and prevent carbon leakage - a phenomenon that occurs when industries relocate their production to countries with less stringent environmental regulations.
Lending in Romania. What is professional lending and when does lending become professional?
This article is the third in our series on lending to/by companies and related issues. It deals with general aspects of lending in Romania and when it becomes “professional lending (creditare cu titlu profesional) subject to authorization. This is particularly relevant for companies that grant loans to other companies or persons in Romania.
Large open-space photovoltaic parks caught between two legal areas
Large ground-mounted photovoltaic parks (i.e. over 50 MW) represent an important solution in the fight against climate change and for achieving the energy targets from renewable sources adopted by Romania. In recent years, the development of numerous large ground-mounted photovoltaic parks has begun, some of which have already received authorisation for connection to the public grid. In Romania, ground-mounted photovoltaic parks connected to the national electricity grid must comply with two types of regulations: those relating to energy and those relating to construction and urban planning. There are therefore two authorisation procedures for the construction of a photovoltaic project: (i) one for the construction project (pursuant to Construction Law no. 50/1991 and Law no. 350/2001 on urban planning and territorial development) and (ii) one for all energy production capacities (pursuant to Energy Law no. 123/2012 and the secondary regulations issued by ANRE).
Managing director contract. Advantages and disadvantages
It is well known that in Romania, board members of public limited companies are not allowed to conclude employment contracts with the company concerned during their mandates, but must be given mandate contracts. Any existing employment contracts are suspended during the term of office. For a Romanian SRL (limited liability company), such a prohibition is not provided for by law, so in practice the parties often waver between a mandate contract or an employment contract. There is often a certain reluctance on the part of prospective managing directors to abandon the known employment relationship, which is reinforced by a current discussion about seniority (vechime în muncă) in mandate contracts. Below we present some basic principles and background information that companies can use when negotiating contracts.
Tax amnesty for outstanding taxes until 25 November
In view of the insufficient collection of contributions for the state budget, but also for the purpose of supporting businesses, the Romanian government has adopted some tax relief for all categories of debtors through Emergency Ordinance no. 107/2024. These measures concern the cancellation of default interest and penalty surcharges (dobanzi si penalitati) that were due on obligations to the state budget outstanding on 31 August 2024 if certain conditions were met.
The heat apparently also paralyses the commercial register
This summer was supposed to bring positive changes for entrepreneurs and freelancers. The authorities had announced a revolution in the commercial register portal and the services offered through it. Among the promises giving hope to those who frequently deal with the commercial register was a reduction in the processing time for company start-ups, simpler and faster issuing of documents and the expansion of information offered. However, entrepreneurs, lawyers and all those affected were confronted with a harsh reality: the revolution began with an obstacle.