√ Corporate law amendments take effect on 18 December 2025
√ Introduction of stricter controls on ownership changes in LLCs
√ Higher share capital requirements for LLCs
√ Restrictions on dividend distributions
√ Mandatory debt-to-equity conversions
In the context of the fiscal reform, the current Romanian Government has enacted a new set of measures amending various pieces of legislation, including Law No. 31/1990 (the Companies Law). These amendments introduce, inter alia, stricter rules for the operation of limited liability companies (LLCs) and impose more stringent capitalisation requirements.
1. Share transfers in an LLC by a controlling shareholder
- A transfer of shares by a shareholder of an LLC which results in a change of control (as defined by the Fiscal Procedure Code) is effective against the fiscal authority only if all of the following conditions are met:
- 15-day notice: the seller, buyer, or the company notifies the fiscal authority of the transfer within 15 days as of the date it was operated and files the updated articles.
- Guarantees for outstanding debts: if the company has outstanding debts to the state budget, the buyer or the company must constitute guarantees to cover the amount of such debts, as listed in the fiscal certificate.
- Registration with the Trade Registry: Where debts to the state budget exist, registration of the share transfer with the Trade Registry must be accompanied by confirmation that the required guarantees have been duly constituted.
- The detailed procedure is to be further set out in a joint order of the fiscal authority and the Trade Registry.
Why it matters: This revives a pre-2020 style constraint, now via guarantees instead of court opposition, so M&A/exits in indebted LLCs will likely need specific tax checks and security baked into the timetable.
2. Minimum share capital for LLCs now linked to turnover
- The minimum capital of LLCs has been changed and is now tiered, being dependent on the turnover of the company. Specifically, LLCs need to have a share capital of:
- RON 500 (approx. EUR 100) if the company’s net turnover is below RON 400,000 (approx. EUR 80,000) as per the last approved annual financial statements.
- RON 5,000 (approx. EUR 1,000) if the company’s net turnover is equal to or exceeds RON 400,000 (approx. EUR 80,000) as per the last approved annual financial statements.
- For newly incorporated LLCs, the minimum share capital will be RON 500 (approx. EUR 100), which is an increase from the current level of RON 1.
- Additional rules:
- If an LLC crosses the RON 400,000 (approx. EUR 80,000) turnover threshold, then it must increase its share capital to RON 5,000 (approx. EUR 1,000) by the end of the next financial year following that in which such threshold has been reached, as per the approved annual financial statements.
- Once the RON 400,000 (approx. EUR 80,000) threshold is reached, the RON 5,000 (approx. EUR 1,000) share capital condition is maintained irrespective of whether the turnover dips below such threshold in a subsequent financial year.
- Transition & sanctions: Existing LLCs must update their share capital within 2 years of entry into force of the law; failure allows any interested party or the Trade Registry to seek court dissolution, with a cure possible up to final judgment.
- Cost relief: If an LLC increases its share capital in order to ensure compliance with the new rules by 31 December 2026, the Official Gazette publication fees are reduced by 50%.
3. Interim dividends & shareholder loans — tighter guardrails
- The Companies Law now expressly:
- Bans loans to shareholders or affiliates until differences from interim dividends are regularized against year-end results; the company and the benefiting shareholder are jointly liable for debts towards the state budget owned by the company, limited to the value of the loan granted and may face fines ranging between RON 10,000 – 200,000 (approx. EUR 2,000 – 40,000) without the possibility of paying half of the fine within 15 days.
- Restricts repayment of existing shareholder loans while net assets are below half of share capital. The company/shareholders breaching this face the same liability and fine range.
Why it matters: The new rules introduce more significant constraints on the flow of funds within a company. The law now explicitly bans loans to shareholders until interim dividends are regularized, which can severely impact a buyer’s ability to extract cash immediately after a deal closes. Furthermore, companies with low net assets are restricted from repaying existing shareholder loans.
4. Dividends blocked by losses or low equity — now explicit
- Companies with current-year profit but accumulated losses may distribute dividends only after covering the losses and statutory reserves.
- If net assets fall below ½ of the share capital, then no dividends (including interim dividends) may be distributed until the equity level is restored.
- The same prohibition applies to interim dividends if net assets as per the interim financial statements are below the legal threshold.
Why it matters: Profit distribution is now subordinated to financial stability. Businesses will need to prioritise loss coverage and capital restoration before remunerating shareholders.
5. Mandatory debt-to-equity swap in prolonged low-equity situations
- Where a company’s net assets remain below ½ of its share capital for two (2) consecutive financial years following the date when such situation has been observed and it carries shareholder loans/financing, the company must convert such debts into share capital.
- Recapitalization obligations do not apply to companies that have been declared inactive.
- Non-compliance with the obligation to bring the net asset back over the legal threshold triggers fines ranging between RON 10,000 – 200,000 (approx. EUR 2,000 – 40,000) while non-compliance with the obligation to convert debts into share capital triggers the application of fines ranging between RON 40,000 – 300,000 (approx. EUR 8,000 – 60,000) without the possibility of paying half of the fine within 15 days. The sanctions become applicable from 2027, but based on violations identified the financial statements for financial years starting on or after January 1, 2025.
- The following companies shall be exempt from the sanction consisting of the obligation to restore net assets above the statutory threshold, namely the recapitalization through the conversion of loans, provided that such loans have a maturity of more than four (4) years:
- Companies that carry out investments or manage alternative investment funds or eligible venture capital funds, including entities belonging to groups of alternative investment funds or their managers;
- Companies whose principal object of activity falls under NACE code 64 (Financial intermediation) – namely investment, holding of participations in other companies, or the professional financing of companies in which they hold shares or equity interests;
- Professional investors, as defined under Directive 2014/65/EU (MiFID II);
- Investors in crowdfunding projects, as regulated by Regulation (EU) 2020/1503, either directly or through intermediary entities;
- Natural person investors, investing amounts between EUR 2,500 and EUR 200,000 in a microenterprise or small enterprise, provided that they do not hold more than 25% of the share capital.
Why it matters: Prevents prolonged undercapitalisation funded by shareholder debt and strengthens the permanent capital base, improving creditor protection.
6. Our take
These amendments will directly affect M&A deals currently in the gap between signing and closing, particularly where the target LLC has outstanding debts. The new requirement to notify the fiscal authority and constitute guarantees before registration introduces procedural steps that can delay closing, however, in the absence of specific guidelines it is rather unclear how long such delays would be. For future deals, parties should plan for these timing implications and ensure deal documentation allocates responsibility for providing guarantees and obtaining the relevant fiscal certificates.
In addition, the new rules introduce several structural risks that buyers and sellers will need to address in deal planning and documentation:
- Dividend restrictions: Post-closing cash extraction through dividends may be blocked where there are accumulated losses or low equity. This limits the buyer’s ability to upstream profits immediately after acquisition.
- Shareholder loans: Repayment of shareholder loans is restricted when the company is undercapitalised, complicating pre-closing restructurings and affecting how leakage or vendor financing is structured.
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