Legal forms

Individual Entrepreneurship

Anyone can create an individual business. The creator does not receive legal personality, so the person is responsible for the obligations assumed by him, both with the assets set aside for the enterprise and with his/her own personal assets. In the case of a sole proprietorship, the entrepreneur may work for another undertaking or employ other persons (maximum 8). Self-employed persons and employees also have the right to participate in pensions, health insurance, unemployment insurance, and other social security schemes. The creation requires professional qualifications or proof of professional knowledge or proficiency (the ANP (authorized natural person) may carry out up to 10 types of economic activity — code 10 CAEN). In the case of an individual business, there are two types of tax regimes to choose from.

Authorized natural person

The authorized natural person, better known Romanian name PFA (persoană fizică autorizată), as the name suggests, also does not receive legal personality, he is also responsible for the commitments entered into with the property set aside for this purpose and his/her personal assets. That undertaking may work on a cooperative basis with other authorized natural persons, self-employed persons, or family businesses,

You can also hire staff (maximum 3). In addition, it is important to know that the authorized natural person must have the appropriate professional knowledge/qualification for his/her work (PFAs may carry out up to 5 types of economic activity — they may have 5 CAEN codes).

Family Business

A family business is useful if you don‘t want to work alone or you don’t have the capital to operate, but you don’t want to hire or associate with unknown people. To be a member of a family business you must be at least 16 years old. You may not employ workers other than family members. The family business is also not given legal personality, its assets are the goods given by its members.

General Trade Company

A public partnership is essentially an undertaking of two or more persons, which has legal personality, the undertaking itself may acquire rights and obligations, but the associates also assume unlimited and equal liability. The company has its assets, the extent of which depends on the contribution of each member. The upper and lower limits of the founding capital are not regulated. The advantage of the public partnership is that its formation and operation is simple, but its disadvantage is that the members have unlimited liability for the obligations arising.

Simple limited partnership

Like a public partnership, a simple limited partnership can be set up by two or more persons for a common purpose, to acquire legal personality and own assets. The difference is that there are partners and generals in the company. An internal member has full responsibility, i.e. it can be a worker, a decision-maker, etc., whereas a foreign member only contributes to the company’s assets, and its liability is limited to that. It is mandatory to have at least 1 internal member and 1 partner. Members shall benefit from the company’s profits in proportion to the contribution to the share capital.

Limited Partnership

A limited partnership is similar to a simple limited partnership, the only difference being that it issues shares that can be purchased on the stock market. It also has internal and external members, in this case, the internal members are fully liable, but they cannot hold shares, while the external members also contribute only to the assets of the company and are limited to that, and may hold shares. According to the law, the capital must not be less than 90,000 lei.

Joint Stock Company

A limited liability company may be set up by at least two persons (the founding members may be physical and legal persons). What is very important is that it is legally defined how much the company should have minimum basic assets: that can’t be less than 90,000 lei. It also follows that public limited companies are established in cases where large investments are involved, and a large amount of capital is required for the economic activity concerned. The company must have an instrument of incorporation and a statute. A memorandum of association contains the details of the founders, the company’s data and its objectives, and the company’s assets. The Statute is essentially an internal policy under which the company operates. The members of the company receive dividends from the company’s profits in proportion to the shares they own. The controlling role within the public limited company is performed by the so-called censors (at least one of these must be an accountant).

Limited Liability Company (KFT)

A limited liability company can be created by anyone, unlike any other company, even a single person (with a maximum of 50 founding members). It requires a minimum share capital (200 lei) and, as its name suggests, the associated members are not responsible for their assets, the liability of the members is limited. It also receives legal personality, a memorandum of association is required for the establishment of a business.

Start-up Limited Liability Company

The start-up limited liability company has the same structure as that of a limited liability company, but this form of company can be created by persons who have never registered a business or had no shareholders in a company. The status of an initially limited liability company is converted into a limited liability company when the annual turnover exceeds half a million euros, if it has failed to fulfill its obligations towards the State for more than 45 days, or if the registration has already elapsed for 3 years. It has the advantage of receiving social security rebates for most of the 4 employees over 3 years and no registration costs have to be paid. In addition, you can apply for a non-repayable EUR 10 000 state grant. The grant applies to half of the application, 50 % of the contribution must be presented.