Who approves payments and contracts in your Romanian subsidiary?

Bogdan Nastase

5 days ago

11 min read

Updated: 4 days ago

By Dr. Bogdan Năstase

The short answer

In a Romanian SRL, the directors (administratori) sign for the company. Each director can act alone unless the articles provide otherwise, and can pass that power on only if expressly allowed. Limits on the powers the law gives directors cannot be relied on against third parties, even if published. Group control must work before signature.

BPMN diagram with four lanes: group shareholders, directors, staff and attorneys, trade register. Start: does this apply to your company? Gate: Romanian SRL? Joint stock company rules on administration do not apply to an SRL (Companies Law, art. 197(4)); if not, not covered here (SA: art. 143, 143²). If yes: shareholders appoint the directors and set their powers, in the articles or by the general meeting; the articles state who represents, term, powers, jointly or separately (art. 197(1), 7(e), 77(1)). The director accepts expressly (art. 72). Registration of the change is requested within 15 days; opposable from registration; free data shows the representatives and whether they act jointly or separately; unregistered acts are not opposable unless known (Law 265/2022, art. 43(1), 46(1), 46(3), 12(1)(f)). Gate: alone or jointly? Default: each director represents; advantage fast, disadvantage no second signature; risk: internal limits on powers given by law are not opposable to third parties (Companies Law, art. 75, 197(3), 55(2)). Jointly, set in the articles: unanimity; if directors disagree, shareholders with an absolute majority of capital decide; advantage two must agree, disadvantage slower; risk: for urgent acts one director may decide alone (art. 76(1), (2)). Gate: delegate signing? Only if the power to delegate was granted expressly (art. 71(1)). If yes, an attorney or employee signs; advantage day-to-day signing; risk without express power: the director is jointly liable for damage and the company may claim the benefits (art. 71(2), (3)). Document each transaction: names and signatures of those responsible; in IT systems, procedures show who initiated, ordered and approved; fine RON 2,000 to 20,000 (Order 2634/2015, annex 1, points 2 and 11; Law 82/1991, art. 6, 41 point 2(c), 42(1)(c)). Towards third parties: the company is bound by the acts of its organs, even beyond its object; limits on powers given by law are not opposable, even if published (Companies Law, art. 55(1), (2)). The director approves the document circuit and is responsible for organising the accounts (Order 2634/2015, art. 4(3); Law 82/1991, art. 10(1)). End: the director answers to the company under the mandate rules, jointly liable for carrying out general meeting decisions and duties under the law and the articles; the general meeting decides to sue (Companies Law, art. 72, 73(1)(d), (e), 194(1)(c)). Working translation; the Romanian text prevails.

The diagram and the steps below are a working English translation of the Romanian texts cited next to each element. The Romanian text prevails.

The approval chain, step by step

Does this apply to your company? This guide covers the limited liability company (societate cu răspundere limitată, SRL) with its seat in Romania. The rules on the administration of joint stock companies do not apply to an SRL (Companies Law, art. 197 para. 4).
The shareholders appoint the directors and set their powers. The SRL is run by one or more directors, shareholders or not, appointed by the articles of association or by the general meeting (art. 197 para. 1). The articles state who represents and runs the company, the term of office, the powers conferred and whether the directors exercise them jointly or separately (art. 7 letter e). Unless the articles provide otherwise, shareholders holding an absolute majority of the share capital may choose directors and fix their powers, term and remuneration (art. 77 para. 1, applied to the SRL by art. 197 para. 3).
The director accepts expressly. An appointment is valid only if the person appointed accepts it expressly (art. 72).
The trade register records it. The company asks for the registration of changes within 15 days of the act or fact (Law 265/2022, art. 43 para. 1). Registrations can be relied on against third parties from the date of registration (art. 46 para. 1). The free basic data shows the legal representatives and whether they act jointly or separately (art. 12 para. 1 letter f).
Alone or jointly? Each director has the right to represent the company, unless the articles provide otherwise (Companies Law, art. 75; art. 75 and 76 apply to the SRL under art. 197 para. 3). If the articles require the directors to act jointly, decisions are taken unanimously; if they disagree, the shareholders holding an absolute majority of the capital decide. For urgent acts whose omission would cause great damage, one director may decide alone when the others cannot take part, even momentarily (art. 76 paras. 1 and 2).
Delegation to an attorney-in-fact or employee. A director with the right to represent the company can pass it on only if that power was granted expressly (art. 71 para. 1).
Each payment and contract is documented. Every transaction is recorded, when it takes place, in a supporting document (Accounting Law 82/1991, art. 6 para. 1). The document shows, among other elements, the names and signatures of the persons responsible for the transaction (Order 2634/2015, annex 1, point 2). In computerised systems, signature is not mandatory, but the company's own procedures must identify who initiated, ordered and approved each transaction (point 11). Supporting documents engage the responsibility of those who drew them up, endorsed and approved them, and of those who recorded them (Law 82/1991, art. 6 para. 2).
The director sets the document circuit. The flow of financial and accounting documents is set by the company's own procedures, approved by the director (Order 2634/2015, art. 4 para. 3). Responsibility for organising and keeping the accounts lies with the director (Law 82/1991, art. 10 para. 1).
Towards third parties. The company is bound by the acts of its organs, even beyond its object of activity, unless it proves that the third party knew or should have known, or the act exceeds the powers the law gives that organ. Publication of the articles is not, by itself, proof of knowledge. Clauses in the articles or shareholder resolutions that limit the powers conferred by law cannot be relied on against third parties, even if published (Companies Law, art. 55 paras. 1 and 2).
The director answers to the company. Directors' duties and liability follow the rules on mandate and the Companies Law (art. 72). Directors are jointly liable to the company, among other things, for carrying out exactly the decisions of the general meeting and for strictly performing the duties that the law and the articles impose (art. 73 para. 1 letters d and e). The general meeting decides whether to pursue directors for damage caused to the company (art. 194 para. 1 letter c).

Options compared: advantages, disadvantages, risks

Option	Advantages	Disadvantages	Risks
One director acting alone (the default)	Each director can represent the company without a co-signature (Companies Law, art. 75 and 197 para. 3)	The law does not require a second signature (art. 75)	Internal limits on the powers the law gives the director cannot be relied on against third parties, even if published (art. 55 para. 2)
Two or more directors acting jointly, set in the articles	Decisions require unanimity (art. 76 para. 1; art. 7 letter e)	If the directors disagree, the decision passes to shareholders with an absolute majority of the capital (art. 76 para. 1)	For urgent acts, one director may decide alone when the others cannot take part (art. 76 para. 2)
Limits set by the shareholders (approval thresholds in the articles or in a resolution)	Directors are jointly liable to the company for carrying out the decisions of the general meeting and the duties under the articles (art. 73 para. 1 letters d and e)	Restrictions sit in the articles or in the shareholder decision that fixes the directors' powers (art. 70 para. 1; art. 77 para. 1); changing the articles needs a general meeting decision (art. 194 para. 1 letter d)	Limits on the powers conferred by law cannot be relied on against third parties, even if published (art. 55 para. 2); the remedy lies against the director (art. 72, 73 and 194 para. 1 letter c)
Delegation to an attorney-in-fact or employee	Day-to-day signing without the director	Possible only if the director was expressly granted the power to delegate (art. 71 para. 1)	Without that power, the director is jointly liable with the substitute for any damage, and the company may claim the benefits of the transaction from the substitute (art. 71 paras. 2 and 3)
A head-office representative appointed as director	The group sits in the body that signs for the company (art. 197 para. 1); with joint action set in the articles, decisions require unanimity (art. 76 para. 1)	Express acceptance (art. 72); registration within 15 days (Law 265/2022, art. 43 para. 1); no mandate in competing companies without the shareholders' authorisation (Companies Law, art. 197 para. 2)	The director's duties and liability apply in full (art. 72 and 73); until the change is registered, the company cannot rely on it against third parties unless it proves they knew (Law 265/2022, art. 46 para. 3)

Key takeaways

In an SRL, each director can sign alone unless the articles say otherwise (Companies Law, art. 75 and 197 para. 3).
Approval limits bind the director towards the company, but limits on the powers the law gives directors cannot be relied on against third parties (art. 55 para. 2).
A change of directors or of powers counts against third parties once registered; the company asks for registration within 15 days (Law 265/2022, art. 43 and 46).
Supporting documents must show who is responsible for each transaction, and engage the responsibility of those who drew up, endorsed and approved them (Law 82/1991, art. 6; Order 2634/2015).