Legislative proposal for the amendment of the Companies Act

On Monday, 23 October 2023, the Romanian Senate adopted a legislative proposal for the amendment of Law No. 31/1990. In addition to the initial provisions of the draft regarding the possibility of electronic voting, it was also proposed to eliminate various formalities that hinder the functioning of companies, such as the requirement that the identification data of beneficial owners be included in the articles of association and the requirement that the resolutions of general meetings of shareholders be published in the Official Gazette.

The most important proposal is the adoption of electronic voting at general meetings of shareholders or associates. At present, public limited companies listed on the stock exchange can use electronic voting to take decisions, and this proposed change to the law is intended to unify the regulatory framework by allowing all types of companies to use electronic voting systems.

The removal of the requirement that the resolutions of general meetings be published in Part IV of the Official Gazette is another change under discussion. This requirement is currently mandatory and must be carried out after filing the resolutions with the Trade Registry Office. This amendment is considered necessary by senators, who argue that in practice shareholders get information about the corporate events of a company via other channels and that the current regulation is excessive, redundant, and inefficient.

Another proposed change seeks to remove the requirement for the identification data of beneficial owners to be included in the articles of association for reasons related to the processing of personal data, but also on the grounds that this procedure is problematic for public limited liability companies not only because of issues pertaining the power to amend articles of association but also because of the impossibility of managing changes to the data on beneficial owners in light of the very short period of time available for their registration.

The legislative proposal also envisages the following amendments:

• regulation of the ability to delegate to the board of directors the power to establish or close secondary offices in order to streamline the decision-making process within a company
• the possibility, where a company has its own website and where the articles of association provide for it, for the convocation of a general meeting of shareholders to be published on this site only through an announcement to this end that remains in place until the date of the meeting
• introduction of a new provision to Article 117, index 1 of the Companies Act, whereby the board of directors may subsequently amend such a convocation within 15 days of its publication

In order to come into force, the draft legislation must be debated and submitted to a final vote of the Chamber of Deputies, followed by promulgation by the President of Romania and publication in the Official Gazette. 

Source: Legislative proposal to amend Law no. 31/1990 (Companies Act)