Authors – Simona Ungureanu (Associate), Daria Olteanu (Associate)
On 26 November 2022, Law no. 265/2022 on the trade register and for amending and supplementing other legislative acts impacting the registration with the trade register, published in the Official Gazette, Part I no. 750 of 26 July 2022 (hereinafter “Law 265/2022”) entered into force, transposing into national law Directives (EU) no. 1132/2017 and no. 1151/2019 regarding the use of digital tools and processes in the context of the companies law.
Amongst other significant changes in the companies law, Law 265/2022 aims to introduce and implement certain current procedures to make it easier for citizens and companies to communicate remotely with the National Trade Register Office and the trade registers in the territory (hereinafter referred to as the “Trade Register”). It is a legislative act which is intended to be a reform in terms of cooperation with the Trade Register, while at the same time repealing a number of legislative acts concerning the activity of the Trade Register and standardising them by centralising them in a single law.
The submission of documentation and applications via the online portal of the Trade Register using a qualified electronic signature is already a common practice, which has proven to be very effective, tested in the pandemic. At that time, the simplification of communication with the Trade Register was proposed on a temporary basis by the legislator facing the challenges brought about by the pandemic (mainly to quickly and efficiently identify ways to allow continuity of procedures and smooth communication with the authorities). Law 265/2022 is intended to provide more permanent solutions.
In the following, we will analyse the main novelties of the new regulation in terms of simplifying communication with the Trade Register.
- Procedure for setting up companies via the online platform
One of the innovations introduced by Law 265/2022 is the possibility to set up companies with just a few clicks on the online platform of the Trade Register. This platform provides users with standard forms of articles of association containing standard clauses with predefined options (available in both Romanian and English for information purposes), as well as other model documents used in the company incorporation procedure, which applicants can fill in on the spot by simply accessing the platform. In other words, under this newly introduced procedure, the articles of association and the other necessary documents do not need to be drafted in advance but can be completed in real time after accessing the online platform. To benefit from this mechanism, we anticipate that, first of all, the applicant must have an account on the online platform of the Trade Register (www. portal.onrc.ro), which is obtained free of charge. It is required that the applicant for the incorporation of a company (who may be one of the founders, a lawyer on the basis of a power of attorney or a proxy under a power of attorney in authentic form) has a qualified electronic signature in the form regulated by the regulations in force. Please note that it is not necessary for all founders of the company being set up to have a qualified electronic signature in order to sign the standard form of the articles of association on the platform, as it can still be signed by hand and uploaded as a separate document. However, there is also the possibility for the founders to sign the document electronically, but in this case, it is required that all founders sign the document with a qualified electronic signature (in other words, holographic and electronic signatures cannot be cumulated).
We believe that this procedure will prove to be of great help in particular to companies with a simple associative structure, which do not intend to adopt complex corporate mechanisms and specific rules for the management of the company but prefer to set up the company as quickly and simply as possible and to operate according to the general provisions of Law no. 31/1990 on companies.
As regards companies with a more complex structure, whose founders wish to implement customised mechanisms to support decision-making and collaboration (e.g., contractual mechanisms for the transfer of shareholdings such as drag along/tag along clauses, pre-emption rights or own statutory rules on the quorum and majority required for decision making at general meeting level, and the examples could go on), the online procedure will not add value, so documents will most likely still be agreed separately and then uploaded to the platform for submission of the incorporation file. It remains to be seen, however, to what extent there will be the option of inserting additional clauses or terms to the predefined ones in order to make the procedure more widely used. In any case, we are waiting to see how the procedures laid down in Law 265/2022 will be detailed in the methodological rules.
- Sole registration certificate (CUI) – electronic version
While until now companies have been used to holding the sole registration certificate in physical format, with the entry into force of Law 265/2022, such certificate can also be issued in electronic format by attaching a qualified electronic signature to it. It follows from the new legal provisions that, depending on the company’s choice, the registration certificate may be received either as a physical document or as an electronic document. However, please note that in recent practice the Trade Register has accepted the issue of two original sole registration certificates (CUI) – in physical and electronic formats.
The change is welcomed and will spare companies the administrative procedure of obtaining a new CUI in physical form in case of loss or destruction. It also makes it possible to communicate with the authorities only remotely, in cases where the original registration certificate is requested.
We are waiting to see whether and how soon this option will be adopted in practice by other authorities and banking entities, which have been used to complying with stricter formalities – will they accept the submission of the CUI by a simple e-mail?
- Documents issued by the Trade Register – delivered either in physical or electronic format
Until recently we were used to having the possibility to request in relation to any file submitted through the online platform of the Trade Register the release of documents both in physical format, signed by hand (following to be delivered by post to the address for service or collected from the Trade Register), and electronically, with a qualified electronic signature attached. According to the legislative changes (anticipated also by the practice of the Trade Register from the recent months), the registrar’s decision (in Romanian: încheierea registratorului), the certificate of registration of entries and the ascertaining certificate (in Romanian: certificat constatator) will be issued only in one of the two versions mentioned above, at the choice of the applicant indicated in the request to the Trade Register, without being able to cumulate them.
The best option seems to be to request that documents be issued in electronic format, so as to avoid unpleasant situations where documents issued by the Trade Register in physical format (single copies) get lost amongst other documents or are not collected on time from the Trade Register office. Of course, this option is helpful to the extent other authorities will also accept documents issued electronically as proof of relevant operations.
- Communication of trade registers at EU level
The new regulation brings new benchmarks regarding the system of interconnection of the Trade Register with the trade registers of the member states of the European Union, a concept that has been introduced into national law with applicability since July 2017.
However, the benefit of this system in terms of general public access to documents from other trade registers in EU Member States is not yet very clear. Will interested persons be able to access, for example, extracts of documents of a company established in an EU member state or other similar documents directly through the interconnection system? If the answer is affirmative, the interconnection system would be of great interest, as it would significantly simplify and streamline certain procedures. In practice, registration procedures with the Trade Register have often been slowed down even for weeks/months while waiting for documents issued by authorities in other countries (e.g., extracts of a foreign legal entity participating in the incorporation of a company in Romania, apostilled or legalised, as the case may be).
- Electronic Bulletin of the Trade Register – a new instrument facilitating access to information
The Electronic Bulletin of the Trade Register (BERC) (https://portal.berc.onrc.ro/home) is a new tool that functions as a database, but also as a central electronic platform through which, among other things, the publication of documents issued by the Trade Register (e.g., company registrations and any other entries in the Trade Register) is carried out.
Thus, by accessing BERC, electronic copies of the decisions (former resolutions) issued in any file submitted for a company can be obtained by simply searching for a company identifier (such as CUI). The platform is easy to access, has a user-friendly interface and allows easy identification of historical corporate operations. However, we note that for some companies, full historical information (since incorporation) is not currently available, but the information will most likely be updated in the coming period. In any case, it will be a useful tool in a general due diligence analysis and in the case of a takeover of a company whose records are not well established. This bulletin can be accessed by persons who have an account on the online platform of the Trade Register, and there is even the possibility of accessing the platform via a mobile application on their phone.
- Other relevant aspects introduced by Law 265/2022
In addition to the aspects detailed above, we highlight below other novelties introduced by Law 265/2022 which we hope will facilitate good cooperation between traders and the Trade Register:
- The Trade Register makes available to the public, free of charge, in Romanian and also in English, on its website or on the online services portal, information on the applicable legislation (e.g., on the qualification as a director, manager, or on the general powers and duties of the board of directors and managers, or of the supervisory board and the management board etc.) – an approach that will be particularly appreciated by foreign investors (please note that at the moment these features are not yet available on the online platform, as the website is still being prepared with the new information and procedures introduced by Law 265/2022);
- The procedure for registering branches set up by companies having their head office in an EU member state is simplified by eliminating the documents and information that will be accessible through the Business Registers Interconnection System – BRIS.
In short, Law 265/2022 is an instrument that takes a modern approach, by aligning the procedures before the Trade Register with those already existing at EU level – the legislator’s goal being, of course, the digitization and de-bureaucratization of procedures. It remains to be seen how the procedures will be implemented in practice, and we look forward to the adoption of the new methodological rules in this respect. In any case, we hope that in the near future the congestion in front of the physical counters of the Trade Register will be considerably reduced and that most applications will be submitted online, through the platform created for this purpose, and that communication with the Trade Register will be generally more expeditious.