The Law no. 265/2022 introduces within art. 91 of Law 31/1990 a new paragraph, par. (2):

• the obligation to deposit 30% of the subscribed share capital amount, in maximum 3 months from the company`s establishment date, but before beginning any operations in the name of the company;
• the obligation to deposit the difference of the subscribed share capital, in maximum 12 months (in case of cash share capital) or within maximum 24 months (for in kind share capital).

The normative text implies interesting legal interpretations regarding the legal competence of the LLC to conclude legal documents and the LLC`s potential nullity. This is the case for companies with a considerable share capital amount, that exceeds the value of current operations (or even annual turnover) of the company and for which the newly established company may require loans from the shareholders.

The LLC`s legal competence to conclude legal documents (contracts) before depositing the 30% of the subscribed share capital

Not depositing the 30% subscribed share capital is in fact an issue that would affect the LLC`s legal competence to conclude legal documents (e. g. contracts)?

In our opinion this is not an issue impacting the LLC`s legal competence.

Law no. 265/2022 does not stipulate and express sanction for the infringement of the obligation to not begin company operations before the 30% of the share capital is deposited. Therefore, we must find an answer considering the applicable legal framework.

Whereas:

• the persons that hold the positions of directors within the LLC fulfill the legal requirements to hold those positions;
• it is not any legal flaw regarding the company establishment that would affect the company`s legal competence,

the executive bodies of the LLC (the sole director, the board of directors etc.) can legally conclude contracts on behalf of the company before the shareholders deposit the 30% of the subscribed share capital.

Therefore, depositing the subscribed share capital does not constitute a pre-condition for the LLC`s legal competence to exercise right and assume obligation by concluding legal documents (e.g. contracts). Such documents cannot be invalidated by invoking this argument.

Not depositing the subscribed share capital is in fact an LLC nullity case.

Not fulfilling the obligations provided by art. 91 par. (2) of the Law no. 31/1990 – an LLC nullity case

Art. 91 par. (2) of Law no. 31/1990 is in the category of legal dispositions regarding the minimum subscribed and deposited share capital and, in consequence it is a nullity case, as art. 56 let. g)1 of the Law no. 31/1990 stipulates.

Not depositing (or not to not fully deposit) the subscribed share capital, without observing the terms and percentages prescribed by the art. 91 par. (2) of the Law no. 31/1990, is a nullity cause that may lead to the LLC`s being annulled by the Court. Of course, this can be avoided by depositing the full subscribed share capital value, until the moment the Court shall rule a decision on the merits of the case.

Conclusions and suggestions for a future regulation

As a consequence of the amendment to art. 91 of the Law no. 31/1990, the deposit of the subscribed share capital amount, after the company is established, has an important effect in case it is breached, as the LLC may be annulled.

The LLC annulment opens the process of the LLC dissolution and liquidation with effects only for the future, without impacting on the contracts concluded with third parties of good faith. According to the law, the third parties of good faith are the ones that did not know the nullity cause (the subscribed share capital not being deposited) at the date the contract was concluded.

Therefore, it is useful that the third parties could verify if the LLC`s share capital was deposited or not. In this regard, the law should implement a legal mechanism to check, through the medium of the Trade Registry, whether the subscribed share capital was deposited.

Regarding the interdiction to not operate before the subscribed share capital is deposited, if this rule shall be kept in the future, for the law provision to be clear and predictable, a sanction must be regulated in case this obligation is breached. If such an amendment shall not be adopted, the legal requirement should be abolished as it is not correlated with the current legal framework.

Robert Trăilescu

Lawyer

Trailescu și Asociații SPARL