Considerations on nullity in case of companies under Romanian law

• Author: Cristina Cojocaru
• Pages: 45-51

Considerations on nullity in case of companies under Romanian law

Lecturer Cristina COJOCARU1

Abstract

The company acquires legal personality after a series of formalities required by law

are fulfilled, formalities that concern the constituent acts on which it is based. For this

reason, it is very important to know the legal status of the company's constitutive acts and

the consequences of their irregularities. Hence, both the essential conditions and the form of

the company’s constitutive acts are analyzed based on the legal provisions. It is also

necessary to distinguish between the nullity resulting from the unlawful drafting of these

constitutive acts and the nullity of society as such. Therefore, this paper is focused on these

differences, as well as on certain practical issues about nullity starting from a recent court

decision handed down by the Romanian Supreme Court.

Keywords: Romanian law, company, companies’ law, nullity.

JEL Classification: K22

1. Introduction

The effect of a company’s incorporation is that a new legal entity, a new

statutory body emerges in the business area and such entity needs to comply with

several requirements provided by law in order to ensure the security and stability of

legal relations.

Such legal requirements cover conditions to be complied with by the

company at the time of incorporation, that is formalities provided by law which must

be fulfilled, as otherwise, the company may not be incorporated.

At the same time, the constitutive act(s) of incorporation based on which the

company is established and which regulates (regulate) the legal relations between

shareholders must be concluded as provided by law, as otherwise the company may

not be legally set up.

A recent case handled by the High Court of Cassation and Justice2 reveals

certain difficulties that might be encountered in the judicial practice, when a

company’s nullity might be mistaken for the absolute nullity of a company’s

memorandum of association. The paper does not pretend to analyze exhaustively this

topic, but rather to underline certain important aspects.

1 Cristina Cojocaru – Department of Law, Bucharest University of Economic Studies,

cristina.cojocaru@cig.ase.ro

2 High Court of Cassation and Justice, Civil Division II, Decision No. 1063 of 7 June 2016.