Important changes brought to Companies Law No. 31/1990
4 November 2020
On 30 October 2020, the Law on simplification and debureaucratization of the transfer of shares and the payment of share capital amending the Companies Law no. 31/1990 was promulgated, published in the Official Gazette of Romania no. 1018/02.11.2020. The normative act, which shall enter into force on 5 November 2020, brings, among others, a long-awaited change by the business environment regarding the simplification of the transfer of shares in a limited liability company (LLC) to persons outside the company.
The main changes brought by the new law are:
a) Elimination of the opposition term in a transfer of shares process to persons outside the LLC
The most important change brought by the new legal act consists in the elimination of the opposition term in a transfer of shares to third parties. From the entry into force of the law, the transfer of shares to a third party may take place immediately, based on the agreement concluded between the parties.
The statement of reasons attached to the law mentions that the old legislation was among the most rigid in the European Union and led to an unjustified extension of the duration of the transfer process and to the agglomeration of the courts with cases concerning oppositions of which a very small percentage were resolved with the admission of the oppositions.
b) Introduction of the right of the shareholders to approve a share transfer to a third party in a LLC with an agreed majority, lower than ¾
The transfer of shares to third parties may be approved by any voting majority expressly included in the articles of association. It is therefore introduced the possibility to derogate in the articles of association from the rule that the transfer of shares to third parties must be approved by a majority of ¾ of the share capital.
c) Elimination of the requirement to have a minimum share capital and a minimum nominal value of each share in a LLC
The law eliminates the obligation to constitute at the incorporation of a LLC a share capital of at least Lei 200, as well as the requirement that the nominal value of a share in a LLC exceeds Lei 10.
In addition to the above, the law also clarifies the fact that the provisions of art. 57 of Companies Law (which regulates the cases that remove the effects of the claim in declaring the company null and void) are not applicable to the opposition claims.
New competition regulations
GEO no. 170/2020 on actions for damages in cases of violation of the provisions of competition law, as well as for amending and supplementing the Competition Law no. 21/1996 (GEO 170/2020) was published in the Official Gazette no. 952, dated October 16, 2020.
GEO 170/2020 transposes the provisions of the European Directive no. 2014/104 and thus creates, in national law, the regulatory framework for the effective exercise of the right of any person to seek full compensation for the harm suffered by an infringement of competition law by an undertaking or an association of undertakings.
a) Procedural aspects
The jurisdiction to solve such requests belongs to the Bucharest Tribunal. The decision of the tribunal can be appealed to the Bucharest Court of Appeal, and an appeal can be declared against its decision to the High Court of Cassation and Justice. The Competition Council may assist the court at its request.
The statute of limitations is 5 years, and it is suspended for the period during which a competition authority is conducting investigations regarding the alleged infringement, as well as for the duration of the alternative settlement process.
Regarding the temporal application, it is provided that the substantive provisions of the Geo 170/2020 do not apply retroactively, while procedural provisions apply to actions for damages filed with the court after the 26th December 2014.
b) Establishing the infringement of competition law
An infringement of competition law found by a final decision of the Competition Council or the European Commission or by a final decision of a Romanian court, is considered to be established irrefutably, for the court invested with the settlement of an action for damages under competition law.
A final decision of a competition authority or court taken in another Member State of the European Union shall prove, until proven otherwise, that there has been an infringement of competition law and, where appropriate, can be assessed together with other evidence submitted by the parties.
c) Full compensation
The principle evoked by GEO 170/2020 is the joint and several liability of undertakings which have caused damage to the applicant by infringing competition law through joint behaviors, the injured party having the right to claim full compensation from any of them until it is fully compensated. However, there are provisions that derogate from this principle in cases where one of the undertakings is an SME or is an immunity recipient, without prejudice to the right to full compensation.
GEO 170/2020 contains special provisions on the passing-on of overcharges, in order to ensure the full effectiveness of the right to full compensation, regardless of whether the injured party is a direct or indirect buyer of the infringer. Thus, the compensation for the actual loss, at any level of the supply chain, will not exceed the overcharge harm suffered at that level.
d) Quantification of harm
As regards the quantification of harm caused by the infringement of competition law, the legislation establishes that the court is empowered to estimate the amount of harm in the disputes pending before it. At the same time, two relative presumptions are established in this respect:
- It is presumed that cartel infringements cause harm consisting in increasing the price of the products or services covered by the cartel by 20%;
- Infringements in the form of abuse of a dominant position are presumed to cause harm.
e) Amendments to Competition Law no. 21/1996
In addition to the provisions concerning the procedure for recovering the harm suffered as a result of infringements of competition law, GEO 170/2020 also brings amendments to Competition Law no. 21/1996, including the following:
- Introducing the obligation for companies to submit, at the request of the Competition Council, the selling prices of the products sold by them, in order to perform analyzes, market studies or price comparisons included in online platforms for informing consumers; the sanction for non-compliance with this obligation is the contravention fine between 20,000 lei and 50,000 lei;
- The right of competition inspectors to copy, during dawn-raids, information stored or archived on electronic medium and to collect this information electronically, with the application of seals, following which the collection of information necessary for the investigation shall be carried out in the presence of a representative of the undertaking or an association of undertakings, at the Competition Council’s headquarters;
- The possibility for microenterprises to pay half of the minimum fine imposed in the field of competition;
- The fine imposed by the Competition Council shall not exceed 10% of the total worldwide turnover achieved by the undertaking or association of undertakings in the financial year preceding the sanctioning certain acts, committed intentionally or negligently;
- The minimum threshold of 0.5% of the fine will be calculated by reference to the total revenues realized on the Romanian territory of the undertaking or the association of undertakings in the financial year prior to the sanction.