Whatever we refer to foreign or domestic investors, the most common form of doing business in Romania is through a Limited Liability Company (SRL). Benefits speak for themselves: quick registration with low administrative obligation, low cost of registration, a minimum social capital of 200 RON, shareholders cannot be held personally liable for the debts or actions of the corporation.
In the following guideline we will provide you information regarding the revocation procedure or, the case may be, cancellation of the administrative act, the time frame when these measures can be taken and an indication of the competent authorities.
In the following paper we present various types of debt recovery methods, according to the Romanian legislation, focusing on the specific features of each method, duration, costs and risks.
When it comes to debts recovery, the Romanian and also the European legislation allow us to decide among several options depending on factors such as the amount of the debt, its due date, the legal relationship of the parties, creditworthiness of the debtor and so on.
Our first advice is to try to solve amicable the dispute, as a negotiated solution keeps a door open for future business relationships with your partners; and if you set-up this solution in a notarized payment agreement (“angajament la plata”) you have a direct enforceable title against the debtor. This means you can directly execute the debtor without going to court.
Furthermore, a court trial can be very costly and is generally a time-consuming process. The average length of a trial in Romania takes about three months for summons for payment procedures (“Ordonanta de plata”, “Cerere cu valoare redusa”, “Somatie europeana de plata”, “Procedura europeană cu privire la cererile cu valoare redusă”) and more than one year for the Common Law Procedure (“Procedura de drept comun”).
Seeking an amicable solution may also be a mandatory preliminary procedure before going to court, as in the case of some summons for payment procedures and a few Common Law Procedures.
Thus, if the debt is not confirmed by an enforceable title which is directly executable, the creditor must obtain a court decision. The creditor, depending on the source of the debt, can choose between the following procedures:
I. Common Law Procedure
This procedure is governed by the Civil Procedural Code. It represents the common law and it is applicable to any dispute for which there is no special procedure foreseen.
The procedure provides a written and an oral stage. The parties can use any kind of proves necessary: documents, witnesses, interrogation, and expertise.
The competent court: The petition shall be submitted with the court that has the competence to judge on the merits of the case in the first instance, which is established according to the general rules of competence.
The material competence belongs to Judecatorie (lowest court in Romania) for claims up to 200.000 RON (app 45.000 EUR). Claims that go beyond this amount will be judged by the Tribunal.
In principle, the territorial competence is where the headquarters of the defendant is situated.
Costs: The claim is subject to a stamp duty regulated by Government Ordinance 80/2013, depending on the value of the claim, as the following:
a) up to the value of 500 RON – 8%, but not less than 20 RON;
b) between 501 RON and 5,000 RON – 40 RON + 7% for exceeding 500 RON;
c) between 5.001 RON and 25,000 RON – 355 RON + 5% exceeding 5.000 RON;
d) between 25.001 RON and 50,000 RON – 1.355 RON + 3% exceeding 25.000 RON;
e) between 50.001 RON and 250,000 RON – 2.105 RON 2% for exceeding 50.000 RON;
f) over 250.000 RON – 6.105 RON + 1% for exceeding 250.000 RON.
Remedies: Against the court decision the parties can file an Appeal at the Tribunal within 30 days after the court Decision was communicated. Against a Decision ruled in the Appeal, the parties can file a second appeal (Recurs) within 30 days after the court Decision was communicated.
Observation: According to Art. 83 from the New Civil Procedural Code, under penalty of nullity, the party who filed a second appeal (Recurs) must be assisted by a lawyer or legal adviser.