The Romanian legislation provides a series of rules and obligations on the Romanian administrator regarding the conduct of his activity. According to the legislation in force, in Romania, the directors (called administrators in Romania) are personally responsible and liable for the damages caused. On the other hand, the administrator will be personally and jointly and severally liable and may be forcibly executed in respect of his personal property (and not of company). Under these conditions, a lawyer specialized in administrative law, litigation and insolvency in Romania can offer you advice and legal assistance and representation in order to ensure and resolve the legal regulations that are the subject of the dispute.
During his mandate, the administrator’s duties may attract various forms of liability (civil, criminal, contravention).
The liability of the administrator of a Romanian company can be committed in five ways: the liability in front of the tax bodies in Romania for the company debt, the liability of the administrator for the company insolvency or bankruptcy in Romania, engaging in criminal liability and white-collar crimes in Romania, the removal or dismissal of the director (administrator) in Romania, civil liability of the director/administrator (tort law in Romania) during his mandate in Romania.
The Romanian Fiscal Procedure Code regulates this type of liability, so that if the insolvent debtor has outstanding payment obligations to the fiscal authorities in Romania, the administrators/directors or any other persons who, in bad faith, they determined the non-declaration and / or non-payment at maturity of the fiscal obligations in Romania, in practice, this being the most common reason for attracting the administrator/director liability in front of the tax bodies in Romania.
The essential condition for attracting liability is for the tax body to demonstrate the bad faith of the company’s administrator in Romania. Although the law applied in Romania provides express ways of committing the deed that justifies the involvement of personal liability, it does not exempt the tax authorities from proving both the deed and the requirement of bad faith. However, fraud unaccompanied by insolvency or insolvency has no effect on joint and several liability in Romania. According to the judicial practice, bad faith cannot be highlighted only by the person’s passivity, but must be based on a concrete attitude, based on evidence, and not on mere presumptions, reason why the Law Firm Pavel, Margarit and Associates recommends to persons who have the status of administrator in Romania the ask for advice from a lawyer specialized in administrative law, litigation and insolvency in Romania, in order to provide you with clear information on the regulations in force and to fulfill the obligations imposed by law in carrying out administrative activities in Romania for the liability in front of tax bodies in Romania, the liability of the administrator for the company insolvency or bankruptcy in Romania, criminal liability and white-collar crimes in Romania, the removal or dismissal of the director (administrator) in Romania, civil liability under the tort law during his mandate in Romania.
Regarding the second category, the personal patrimonial liability of the administrator for the Romanian company insolvency and bankruptcy provided by the Romanian legislation is conditioned by the existence of unpaid debts to creditors in Romania. The request to attract personal patrimonial liability of the administrator for the Romanian company insolvency and bankruptcy shall be made by the judicial administrator / liquidator in the general insolvency proceedings in Romania, the general bankruptcy proceedings or the simplified bankruptcy procedure or, as the case may be, by the creditor holding at least 30% of the amount of receivables.
The liability court action to attract personal patrimonial liability of the administrator in Romania is valid within 3 years from the date on which the person who contributed to the insolvency of the company in Romania was known or should have been known, but not later than the date of publication in the Romanian Bulletin of Insolvent Companies of the report of the insolvency practitioner/liquidator on the causes and circumstances that led to the inability of the Romanian company to pay is debts in Romania.
Following their analysis, a report shall be drawn up on the causes and circumstances which led to the insolvency of the Romanian company to be indexed at the request for liability as evidence.
Pavel, Margarit and Associates Romanian Law Firm recommends to any investors, shareholders or directors of companies in Romania to seek for legal advice from a lawyer specialized in administrative law, litigation, bankruptcy and insolvency in Romania, in order to provide you with clear information on the regulations in force and to fulfill the obligations imposed by law in carrying out administrative activities in Romania for the liability of the director (administrator) in front of tax bodies in Romania, the liability of the administrator for the company insolvency or bankruptcy in Romania, the criminal liability and white-collar crimes of director (administrator) in Romania, the removal or dismissal of the director (administrator) in Romania, the civil liability under the tort law of the director (administrator) during his mandate in Romania.
The civil liability of the administrator/director in Romania, of the management bodies of the Romanian company, being a species of tort law in Romania, it is necessary to meet the four conditions requested by the Romanian Civil Code: damage, unlawful act, the causal link between the unlawful act and the damage and the guilt of the administrator/director in Romania.
With regard to the breach of certain legal obligations, compensation may be claimed in the Romanian Courts for attracting the civil liability of the administrator/director in Romania for the damage caused or certain sanctions may arise such as the exclusion/dismissal of the shareholder who is also director or administrator, the revocation of the Romanian administrator/director, the termination of the employment/management/administration contract of the general manager in Romania.
According to the legislation in force, in Romania, any damage gives the right to repair. The compensation must include the loss suffered by the injured party in Romania, the gain/capital which he could have made under normal conditions in Romania and which one/Romanian company has been deprived of, as well as the expenses he made to avoid or limit the damage.
Pavel, Margarit and Associates Romanian Law Firm recommends to any investors, shareholders or directors of companies in Romania to seek for legal advice from a lawyer specialized in administrative law, tort law and litigation in Romania regarding the civil liability of the director (administrator) during his mandate in Romania, under the tort law in Romania.
Also, according to the tort law in Romania, if the unlawful action in Romania under the tort law in Romania, also led to the loss of the chance to obtain an advantage or to avoid damage in Romania, the repair will be proportionate to the probability of obtaining the advantage in Romania or, as the case may be, to avoid damage, taking into account the circumstances and the concrete situation of the victim.
Based on the legislative provisions applied in Romania, it can be requested to exclude/dismiss of the director/administrator who is also a shareholder in Romania on the grounds the actions carried out in connection with the company in which the person holds the status of a shareholder and administrator, fraud has been committed to the detriment of the Romanian company concerned, the director/administrator who is also a shareholder in Romania being able to be considered any intentional action or inaction committed by the director/administrator who is also a shareholder in Romania and has as a sanction its exclusion/dismissal as a shareholder in Romania. Negligence or inability in business cannot be considered fraud as long as these facts lack the volitional element that allows them to be classified as facts of deception.
Pavel, Margarit and Associates Romanian Law Firm recommends to any investors, shareholders or directors of companies in Romania to seek for legal advice from a lawyer specialized in exclusion/dismissal of the director/administrator who is also a shareholder in Romania, administrative law, litigation in Romania, in order to advice on the regulations in force and to fulfill the obligations imposed by tort law in Romania for the removal or dismissal of the director (administrator) in Romania and the civil liability of the director (administrator) during his mandate in Romania.
The excluded/dismiss shareholder in Romania is liable for losses and is entitled to benefits until the day of his exclusion/dismiss in Romania (after the final waiver of the exclusion/dismissal decision in Romania), but will not be able to request their liquidation and waiver for responsibility, until their mandate is being verified by the General Shareholders Assembly in Romania according to the provisions of the articles of association.
If the actions of the administrator/director in Romania of a company qualify as white collar crimes, the penalty is usually imprisonment or a criminal fine. As a general rule, criminal action against the liability of the administrator/director in Romania is initiated by criminal investigation bodies in Romania. The criminal action is initiated by the Company and continued by the Romanian Authorities, the prosecutor, by ordinance, during the criminal investigation in Romania, when he finds that there is evidence that a person has committed a white collar crime and that there is none of the cases of impediment provided by law. In some cases, the law provides that criminal action against the liability of the administrator/director in Romania may be brought only upon prior complaint of the injured party (the Romanian Company), at the complaint formulated by the person provided by law or with the authorization of the Romanian Company provided by the Romanian Companies Law.
The prior complaint against the liability of the administrator/director in Romania must be lodged within 3 months of the day on which the injured party (the Romanian Company) found out about the fraud or criminal action in Romania. In the case of the fraudulent management offense in Romania, the criminal action in Romania is initiated only after the prior complaint of the injured person in Romania.
The criminal offenses for which an administrator/director in Romania could be investigated are: embezzlement in Romania (art. 295, Romanian Criminal Code), fraudulent management in Romania (art.242, Romanian Criminal Code ), blackmail in Romania (art.207, Romanian Criminal Code ). Pavel, Margarit and Associates Romanian Law Firm recommends to any investors, shareholders or directors of companies in Romania to seek for legal advice from a lawyer specialized in white collar crimes, criminal law, administrative law, litigation, bankruptcy and insolvency in Romania, to advise and represent in case of the administrator/director criminal and white-collar crimes in Romania.
Therefore, the Romanian legislation imposes a specific legislative framework for company administrators/directors involved in criminal and white-collar crimes in Romania, who can request the personal and joint and several liability administrators/directors in Romania by non-compliance with their mandate or by breaking the Romanian Companies Law or Criminal Code. Thus, the liability of the administrators/director involved in criminal and white-collar crimes in Romania are complex legal matters that requires compliance with the legal environment, all procedures and related requirements.
Thus, the shareholders and investors in Romania and also the administrators/directors in Romania, are advised to seek legal assistance and representation of lawyers specializing in criminal and white-collar crimes in Romania administrative law, litigation and insolvency in Romania, because non-compliance with applicable law entails civil liability, criminal or criminal offense of the administrator of a company in Romania.
The present study has made a short presentation of the Five ways a director (administrator) could be held personally liable in Romania. Pavel, Margarit and Associates Romanian Law Firm recommends to any investors, shareholders or directors/administrators of companies in Romania to seek for legal advice from a lawyer specialized in administrative law, litigation, bankruptcy and insolvency in Romania, in order to provide you with clear information on the regulations in force and to fulfill the obligations imposed by law in carrying out administrative activities in Romania for the liability of the director (administrator) in front of tax bodies in Romania, the liability of the administrator for the company insolvency or bankruptcy in Romania, the criminal liability and white-collar crimes of director (administrator) in Romania, the removal or dismissal of the director (administrator) in Romania, the civil liability under the tort law of the director (administrator) during his mandate in Romania.