Your Romanian-based company can award shares to its personnel easier. Here's how

TL;DR - following new changes to Romanian Company Law, you can now be more granular in the allocation of company shares to your employees or collaborators.

Versiunea în limba română a articolului este disponibilă aici.

As a result of some welcomed changes to the Romanian Companies Law, share capital can be allocated with more granularity to different individuals and entities and, as a result, may make your company more attractive to investors.

The problem with a company’s share capital in the context of an investment

Investors usually expect you to be able to allocate shares in your company soon after an investment is being made - this is commonly referred to as setting up a stock option plan.

Until recently, the level of granularity you could achieve in setting this up was quite restricted if you had a limited liability company. Since the minimum share capital of a limited liability company needed to be RON 200, and each share held a nominal value of at least RON 10, with all shares needing to be equal in value, this meant that, when setting up a company with the minimum share capital according to law, one share equaled to 5%. This made it impossible to achieve a more granular share capital split without depositing a larger share capital to begin with.

New provisions eliminated both the minimum value of the share capital and that of shares taken individually. The only requirement still standing is that shares need to be equal in value.

How we can help

In the context of new changes, we’ve configured a service that helps you multiply the number of shares in your company in a matter of days by a significant multiplication factor, without raising your share capital. This comes in handy both for startups, but we see it as creating the opportunity for companies across industries to create incentives for their team in the form of shares allocation.

All you need to do to make this happen for your company is get your hands on the updated version of your company’s articles of incorporation and, ideally, a recent resolution of the general shareholders' meeting. After reviewing those, we take care of the updates. If no major roadblocks occur (such as a large number of shareholders that need to approve the resolution or additional documents that you have specifying preliminary steps that need to be taken), you receive your Trade Registry resolution in about a week after we review your initial documents.

Let’s prepare your company for its upcoming investment

If you want to benefit from this, drop me an e-mail so I get a a bit of context on how we can make this happen for your company.

Photo by Brooke Cagle on Unsplash

Share our post

comments powered by Disqus