Business Structures in Romania

Congratulations on your decision to embark on the exciting journey of starting a business in Romania! One of the crucial first steps involves choosing the right legal structure. This essentially determines how your company will be organized, managed, and how financial responsibility is shared. Don’t worry, this guide will break down the most common business structures in Romania, explaining them in clear terms to help you make an informed decision.

Limited Liability Company (Societate cu raspundere limitata – S.R.L.)

The reigning champion of popularity in Romania, the S.R.L. is a favorite for many businesses due to its flexibility and affordability. Here’s what makes it so attractive:

Minimum Share Capital: Incredibly low, just 1 Romanian Leu (RON). That’s practically a symbolic gesture!
Number of Shareholders: Can be as few as 1 person (you!) or can expand to accommodate up to 50 shareholders. Perfect for both solopreneurs and partnerships.
Shareholder Liability: This is a key benefit. Your financial risk is limited to the amount you contribute to the company’s share capital. So, if the company encounters financial difficulties, your personal assets are generally protected.

Joint Stock Company (Societate pe actiuni – S.A.)

This structure is more suitable for large-scale businesses with ambitious plans to raise money by selling shares to the public (like issuing stocks). Here’s a breakdown of its key features:

Minimum Share Capital: This is a higher hurdle compared to the S.R.L., requiring a minimum investment of at least the equivalent of €25,000 in RON.
Number of Shareholders (Stockholders): You’ll need at least 2 people to form an S.A.
Shareholder Liability: Similar to the S.R.L., your financial risk is limited to the amount you invest in the company’s shares. This offers a degree of protection for your personal finances.

Delving into Other Business Structures

Depending on your specific needs and goals, here are some additional business structures to consider:

General Partnership (Societate in nume colectiv – S.N.C.) and Limited Partnership (Societate in comandita simpla – S.C.S.): These structures are well-suited for smaller businesses with a close-knit group of partners. It’s important to note that partners share some personal financial risk for the company’s debts.
- General Partnership (S.N.C.): All partners have a say in management and share unlimited liability for the company’s obligations.
- Limited Partnership (S.C.S.): This structure offers more protection. It involves two types of partners:
  - Limited Partners: They contribute capital but have no management role and their liability is limited to their investment.
  - General Partners: Manage the company and hold unlimited liability for the company’s debts.
Company Limited by Shares (Societate in comandita pe actiuni – S.C.A.): This structure shares similarities with the Limited Partnership (S.C.S.) but uses shares instead of capital contributions.
Branch (Sucursala): This is essentially an extension of an existing foreign company operating in Romania. The parent company assumes full responsibility for the branch’s finances.
Sole Entrepreneur (Persoana Fizica Autorizata – P.F.A.): This is the simplest option, ideal for a one-person business. You are the sole owner and take complete responsibility for everything.

Choosing the Structure that Suits You Best

The ideal business structure for you will depend on several factors, including:

Number of Owners: Are you going solo or venturing with partners?
Financial Investment: How much capital are you willing to invest upfront?
Growth Plans: Do you envision raising money from external sources in the future?
Risk Tolerance: How comfortable are you with potential personal financial liability?

If you’re feeling overwhelmed by the options, don’t hesitate to seek professional guidance. Consulting with a business advisor can provide valuable insights and help you navigate the legalities involved in choosing the most suitable structure for your unique business goals.

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