How to register a company in Romania?

In order to register a company in Romania, you need to choose the type of company form you want to incorporate, to prepare the necessary documents and to submit the application to the Romanian Trade Registry. Most common forms of companies in Romania are the Limited Liability Company (LLC), Joint Stock Company (SA) and sole trader (PFA).

How long does it take to open a company in Romania?

The company formation in Romania process will take 2 working days, since the date the incorporation application is submitted to the Romanian Trade Registry.

What is the main advantage to open a company in Romania?

One of the lowest taxation in EU: 1% turnover tax for the companies whose turnover does not exceed EUR 60,000 and have at least one employee or 3% turnover tax if the companies has a revenue exceeding EUR 60,000 or the companies is engaged in some specific activities.

Can I start a company in Romania as a foreigner?

Foreign citizens and legal persons can quickly and easily incorporate their own company in Romania, without any restrictions. There is no need for a Romanian shareholder and director

Company Deregistration, Business Winding Up Firm Dissolution

When operating a business in Romania, certain circumstances may lead to the need for company deregistration, dissolution, or liquidation. This guide provides a detailed exploration of the processes, costs, and legal implications associated with company deregistration, winding up, and liquidation in Romania

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Navigating the complexities of company deregistration and liquidation in Romania can feel overwhelming, but understanding the process is crucial for a smooth transition. Whether you need to deregister a company, wind up a business, or dissolve a partnership, this guide covers all aspects, from voluntary deregistration of a company to compulsory winding up. Learn about the winding up process, costs to liquidate a company, and how to handle VAT on deregistration, as well as the steps to reinstate a deregistered company if needed. Let’s break down everything you need to know about company dissolution, liquidation, and winding up in Romania.

Learn everything about company deregistration in Romania, including the process of voluntary and compulsory winding up, business dissolution, and company liquidation. Discover steps to deregister a company, liquidate assets, and understand costs, VAT implications, and legal requirements for winding up a business.

What Is Company Deregistration?

Company deregistration refers to the formal removal of a company from the official business register. This process signifies that the company ceases to exist as a legal entity and is no longer obligated to comply with corporate regulations, pay taxes, or file financial reports. Deregistering a company is often the final step in the process of business dissolution or winding up.

When to Consider Company Deregistration

Businesses may seek deregistration for various reasons under the Romanian law, including:

Completion of business operations.
Insolvency, bankruptcy or inability to meet financial obligations.
Shareholder agreement to voluntarily wind up the company.
Legal compulsion to close operations.
Exceeding the limited timeframe for which the company was initially incorporated,
Impossibility of fulfilling the company’s business objectives,
Annulment of the company through a decision of the General Shareholder Assembly, tribunal rulings on requests from associates citing well-founded reasons,
Conflicts between associates that result in the cessation of the company’s activity.

Steps to Deregister a Company in Romania

The company deregistration process under Romanian Companies Law no. 31/1990 involves specific legal steps, whether you aim for voluntary deregistration of a company or are compelled to wind up a business. Winding up a company means concluding its operations, settling debts, and distributing any remaining assets through liquidation. This process can include voluntary winding up of a company, compulsory winding up, or the dissolution of limited liability companies (LLCs).

Determine the Reason for Deregistration: Whether it is a voluntary deregistration of a company or a compulsory winding up, the purpose will influence the required steps and documentation.
File for Dissolution: Initiate the process by filing an application for company dissolution with the Trade Register.
Publish a Notice or the Shareholders' Decision Approving the Company Dissolution: Romanian law requires publishing a notice of dissolution in the Official Gazette, allowing creditors to submit claims.
Appoint a Liquidator (only if the company has assets): In many cases, the company must appoint a liquidator. The liquidator of the company oversees asset liquidation and the resolution of financial obligations.
Settle Liabilities: Ensure all debts, taxes, and obligations are paid. This step may involve the liquidation of company assets.
Distribute Remaining Assets: After debts are settled, any remaining assets are distributed to shareholders.
Submit Final Documents: File the necessary documentation, including the final balance sheet and liquidation report, with the Trade Register.
Receive Deregistration Approval: Once approved, the company is officially removed from the register.

Understanding Winding Up a Company Process

The process of winding up a company means bringing the business to an orderly end, including the settlement of liabilities, distribution of assets, and deregistration.

Types of Winding Up of a Company

Voluntary Winding Up of a Company. Voluntary Deregistration of a Company. Initiated by the company’s shareholders, often when the company is solvent. This process allows for the systematic resolution of all financial matters before deregistration, as we will see below.

Compulsory Winding Up. The compulsory winding up is ordered by a court, typically due to insolvency or legal violations. Creditors often play a key role in this process.

Key Steps in the Winding Up Process

Pass a resolution for winding up.
Notify creditors and stakeholders.
Conduct an inventory of company assets.
Liquidate assets to pay debts.
File all required reports and documentation with authorities.

Liquidation: Dissolving a Company’s Assets

Liquidation involves dissolving a company’s assets to settle debts and close its operations, often as part of the process of winding up a company. Whether part of voluntary winding up of a company or compulsory winding up, the liquidator of the company plays a key role in assets liquidation and managing creditor repayments. Company liquidation marks the final stage in company deregistration, where the business is deregistered after all liabilities are resolved. The cost to liquidate a company depends on its structure and financial complexity, whether you’re winding down a company, dissolving an LLC, or closing a partnership firm. Proper execution ensures a smooth winding up process and legal compliance.

Briefly, the company liquidation involves converting a company’s assets into cash to pay creditors. This process is integral to winding up a ltd company or dissolving an LLC.

Voluntary Winding Up and Voluntary Liquidation

Voluntary liquidation occurs when shareholders or directors decide to close the company, often after determining it is no longer viable. A liquidator oversees the process, ensuring all legal obligations are met.

Voluntary winding up of a company is a strategic choice for business owners looking to deregister a company efficiently. This process of winding up a company means formally ceasing operations, settling liabilities, and liquidating assets. Voluntary deregistration of a company involves appointing a liquidator of the company to oversee the assets liquidation and ensure compliance with legal requirements. Whether winding down a company, dissolving an LLC, or completing the winding up of a ltd company, this business deregistration method simplifies the process while minimizing the cost to liquidate a company. Proper planning ensures a smooth winding up process, leaving no unresolved financial or legal issues.

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Involuntary / Compulsory Liquidation. Compulsory Winding Up

Compulsory winding up of a company is a legal process initiated by a court order, often due to insolvency or failure to comply with statutory obligations. This process of winding up a company means ceasing its operations, settling debts through company liquidation, and deregistering the company. Unlike voluntary deregistration of a company, compulsory winding up involves court-appointed oversight, with a liquidator of the company managing assets liquidation and debt repayment. The cost to liquidate a company in this manner depends on its complexity, liabilities, and the legal process involved. Whether winding up a ltd company or dissolving an LLC, this method ensures that creditors’ interests are prioritized and the business is formally closed.

When a company is liquidated involuntarily, it’s usually due to insolvency. Courts appoint a liquidator to manage the process.

Costs to Liquidate a Company

The cost to liquidate a company in Romania varies based on:

The complexity of the company’s financial situation.
Legal and administrative fees.
Liquidator’s remuneration.

Our lawyers of Romanian Advocacy can provide expert guidance throughout the entire process of company deregistration and liquidation, ensuring compliance with legal requirements. The process, whether it involves voluntary winding up or compulsory winding up, is often influenced by the value of the company's debt and other financial obligations.

Company Dissolution vs. Liquidation

Company dissolution and liquidation are two distinct processes in business deregistration. While company dissolution refers to the formal closing of a business and the removal of its legal status, liquidation involves the sale of assets to settle debts before the company is deregistered. In the case of voluntary deregistration of a company, business owners may choose voluntary winding up, where a liquidator of the company handles assets liquidation. In contrast, compulsory winding up may occur when the company is forced into liquidation by creditors. Whether you're winding up a ltd company, dissolving an LLC, or managing the winding up of a business, understanding the differences between dissolution and liquidation is crucial for a smooth and legally compliant company wind up process.

Company Dissolution: Refers to the legal termination of a company’s existence.
Liquidation: Focuses on the sale of assets to settle debts before dissolution.

Both processes are intertwined but serve distinct purposes within the broader context of company deregistration.

Dissolving Different Business Types

Dissolve an LLC

The dissolution of a limited liability company (LLC) in Romania requires:

Filing resolutions with the Trade Register.
Settling all liabilities.
Distributing residual assets among members.

Dissolve a Partnership Firm

Firm dissolution involves:

Mutual agreement among partners.
Settlement of debts and liabilities.
Filing for deregistration.

Duration of the Deregistration Company Process in Romania

The duration of the company deregistration process in Romania, under the Romanian Companies Law no. 31/1990, varies depending on whether the company is undergoing voluntary or compulsory winding up. Voluntary deregistration of a company typically takes several months, as it involves the winding up process, including assets liquidation and settling liabilities. For a company to wind up, whether it's a limited company or an LLC, the winding up process must be completed before the company can be deregistered. Compulsory winding up, initiated by a court order, may take longer due to additional legal complexities. The cost to liquidate a company and the involvement of a liquidator can also impact the timeframe for company dissolution.

VAT on Deregistration Company

VAT on deregistration is an important consideration during the company deregistration process, particularly when winding up a business. Whether you're engaging in voluntary deregistration of a company or compulsory winding up, the VAT implications can affect how assets are liquidated and the final tax obligations. When a company is liquidated, the liquidator of the company must assess the VAT on any assets sold during the liquidation process. The winding up of a company means that all liabilities, including VAT, must be settled before the company is deregistered. Understanding VAT on deregistration helps ensure compliance with tax laws and prevents issues during the company dissolution, whether you're dissolving an LLC or winding down a company.

Businesses deregistering for VAT must:

Notify tax authorities.
Settle outstanding VAT liabilities.
Submit final VAT returns.

FAQs on Company Deregistration and Liquidation

1. What is the difference between compulsory winding up and voluntary winding up?

Compulsory winding up is court-mandated, often due to insolvency. Voluntary winding up is initiated by shareholders, typically when the company is solvent.

2. What happens to a company’s assets during liquidation?

Assets are sold, and the proceeds are used to pay creditors. Remaining funds, if any, are distributed to shareholders.

3. How long does the deregistration process take?

The timeline varies but generally ranges from a 1,5 months to a year, depending on the company’s complexity and outstanding obligations.

4. Can a company be reinstated after deregistration?

In rare cases, a deregistered company may be reinstated if errors occurred during the process or if creditors contest the deregistration.

5. What is the difference between company dissolution and company liquidation?

Both are phases of the company deregistration process which ends with the erasure of the company from the Trade Registry registrations. While company dissolution is related to the legal termination of a company’s existence, the liquidation of the company consists in the selling of assets to settle debts after the dissolution.

6. What happens when a company is liquidated?

When a company is liquidated, its assets are sold off to pay creditors. Any remaining funds are distributed to the shareholders, and the company is then deregistered. After liquidation, the company no longer exists legally, and it is considered a "wound up company."

7. What is the role of the liquidator during liquidation?

The liquidator of the company is responsible for managing the liquidation process. This includes selling the company’s assets, paying off creditors, and distributing any remaining funds to shareholders. The liquidator ensures compliance with all legal requirements and finalizes the company’s closure, including deregistering the company after liquidation.

8. How can I wind up a limited company, and what is the cost to liquidate a company?

Winding up a limited company involves initiating either a voluntary winding up or a compulsory winding up. During the winding up process, the company’s assets are liquidated, and liabilities are settled. The cost to liquidate a company varies depending on its size, debts, and complexity, but it starts from EUR 400 (lawyers fees) which to be added the administrative Trade Registry fees of EUR 100.

9. Can a company in Romania be dissolved without going through the liquidation procedure?

Yes, a company in Romania can be closed without going through the liquidation procedure if the shareholders agree to the dissolution of the company and decide how to handle the settlement of liabilities and distribution of assets. In such instances, the company must submit the required documents to the competent Trade Register for deregistration. These documents include the dissolution decision, the decision on executing liabilities, and the distribution of assets. By following this process, the company can be formally dissolved without undergoing a formal liquidation process.

10. How the bankruptcy procedure can lead to the company deregistration and winding up?

The bankruptcy procedure in Romania is a collective insolvency process regulated by Law 85/2014, designed to liquidate the debtor's assets to settle its liabilities and ultimately remove the debtor from the Trade Register. The process can be initiated by the debtor through the submission of an insolvency request. The goal of the bankruptcy procedure is to ensure that creditors are treated fairly and that the debtor’s assets are used to meet its obligations.

Throughout the bankruptcy procedure, a specialized lawyer in insolvency, restructuring, and bankruptcy law in Romania can provide crucial legal assistance. This includes advising on how to limit the consequences of bankruptcy, negotiating with creditors, and ensuring that the process complies with all legal requirements.

Final Thoughts on Company Deregistration and Business Winding Up Dissolution

Successfully navigating company deregistration, business deregistration, and liquidation in Romania requires a clear understanding of the legal framework and detailed planning. Whether undertaking a voluntary winding up of a company or dealing with compulsory liquidation, following the proper steps ensures a seamless process. If your company is liquidated or you’re considering the cost to liquidate a company, seeking professional advice can make all the difference. For those exploring reinstating a deregistered company or managing assets liquidation, preparation and compliance are key. Take charge of your business’s future with the confidence that comes from being well-informed about every aspect of winding up a company in Romania.

Company deregistration, winding up, and liquidation in Romania are intricate processes requiring meticulous planning and compliance. Whether it involves voluntary liquidation or compulsory winding up, understanding the legal and financial implications ensures a smooth transition. By following the outlined steps and seeking professional guidance, businesses can navigate these procedures efficiently and cost-effectively.

For any question regarding company deregistration in Romania, business winding up, dissolution and liquidation, feel free to reach out to us at tudor@roadvocacy.ro or use the contact form on our website at www.roadvocacy.ro. Your business, our mission.

Company Deregistration in Romania, Business Winding Up, Company Dissolution and Liquidation

What Is Company Deregistration?

When to Consider Company Deregistration

Businesses may seek deregistration for various reasons under the Romanian law, including:

Completion of business operations.

Insolvency, bankruptcy or inability to meet financial obligations.

Shareholder agreement to voluntarily wind up the company.

Legal compulsion to close operations.

Exceeding the limited timeframe for which the company was initially incorporated,

Impossibility of fulfilling the company’s business objectives,

Annulment of the company through a decision of the General Shareholder Assembly, tribunal rulings on requests from associates citing well-founded reasons,

Conflicts between associates that result in the cessation of the company’s activity.

Steps to Deregister a Company in Romania

Determine the Reason for Deregistration: Whether it is a voluntary deregistration of a company or a compulsory winding up, the purpose will influence the required steps and documentation.

File for Dissolution: Initiate the process by filing an application for company dissolution with the Trade Register.

Settle Liabilities: Ensure all debts, taxes, and obligations are paid. This step may involve the liquidation of company assets.

Distribute Remaining Assets: After debts are settled, any remaining assets are distributed to shareholders.

Submit Final Documents: File the necessary documentation, including the final balance sheet and liquidation report, with the Trade Register.

Receive Deregistration Approval: Once approved, the company is officially removed from the register.

Understanding Winding Up a Company Process

The process of winding up a company means bringing the business to an orderly end, including the settlement of liabilities, distribution of assets, and deregistration.

Types of Winding Up of a Company

Voluntary Winding Up of a Company. Voluntary Deregistration of a Company. Initiated by the company’s shareholders, often when the company is solvent. This process allows for the systematic resolution of all financial matters before deregistration, as we will see below.

Compulsory Winding Up. The compulsory winding up is ordered by a court, typically due to insolvency or legal violations. Creditors often play a key role in this process.

Key Steps in the Winding Up Process

Pass a resolution for winding up.

Notify creditors and stakeholders.

Conduct an inventory of company assets.

Liquidate assets to pay debts.

File all required reports and documentation with authorities.