Corporate governance and registration with the Romanian Trade Registry during COVID – 19 – emergency kit required
As of 16 March, the day when the state of emergency was declared in Romania, the Government has adopted an impressive number of pieces of legislation aimed at preventing and limiting the spread of the new coronavirus, on one hand, and at reducing the negative impact on economy of the implemented solutions, on the other hand. To be specific, we are talking about 75 acts (primary and secondary legislation) adopted in the course of approximately 1 month.
In addition to the above, the Parliament also has its own agenda and it has recently passed several bills which contain measures that overlap with those adopted by the Government. Due to a long list of unconstitutionality concerns, some of these bills are currently subject to constitutionality control before the Romanian Constitutional Court, being unable to predict if or when they will enter into force.
The result? Divided and overlapping legislation, normative acts that were subsequently amended, some of them one day after being adopted; overall, a substantial package of acts which are extremely difficult to navigate.
However, despite the intense law-making exercise, the Romanian state has yet failed to adopt some straightforward measures to enable the functioning of the decisional corporate bodies of Romanian companies or to facilitate registrations into the Trade Registry.
More specifically, the long promised emergency ordinance addressing the possibility for the shareholders meetings to be held by correspondence/videoconference has not yet been adopted, even though a first draft was made available by the Government a month ago. Despite all support from the industry the so-much-needed regulation has not yet been passed, although it is a matter of utmost urgency for the corporate life of the companies.
The Government’s solution to this blockage? A retroactive provision included in the last published draft aimed at validating the shareholders’ meetings held before the entry into force of the proposed government emergency ordinance by breaching the provisions of the Companies Law no. 31/1990, provided such observe the provisions of the ordinance to be adopted. Although we understand the alleged practicality of such solution we still believe that the best solution is to address urgent issues in due time and within the limits prescribed by the Constitution, all the more during times when rights are subject to severe restrictions.
In addition, due to the extreme formalism and bureaucracy of Romanian authorities, simple operations such as registrations in the Trade Registry in case of companies having foreign shareholders are in many instances currently blocked. The main cause of such blockage resides in the absence of an exemption from the supralegalization and apostillation requirements which concern all official acts issued by foreign states with which Romania did not enter into bilateral conventions providing otherwise.
Even though the second presidential decree extending the state of emergency (the Decree no. 240/2020) waives the authenticated form for sworn statements and signature specimens to be submitted with the Trade Registry, it failed to consider other documents requested by such authority. For example, the Trade Registry requires proof of signature powers of the persons signing all decisions which are subject to registration, even if such persons are already included in their data base, proof that is usually made based on excerpts issued by the chambers of commerce or trade registries from the country of origin of the shareholder.
Given that the above documents qualify as official acts, apostillation or supralegalization is necessary. However, similarly with Romania, most of the affected countries suspended all their apostillation and superlegalization procedures due to the COVID-19 pandemic. Hence, until a temporary derogation from these requirements is adopted, companies having foreign shareholders face serious blockages in performing the necessary registration with the Trade Registry.
For these reason, in our view, delay in adopting these simple measures by the Romanian time is aggravating the effects of COVID-19 pandemic on economy. In this context, as we believe that the interest of economy actually prevails, we trust that appropriate measures will be adopted in due time.