Legal aspects of the usufruct agreement in Romanian civil law

The usufruct agreement in Romania grants a person (usufructuary in Romania) the right to use and benefit from the fruits of a property belonging to another person (bare owner in Romania), without having the right to dispose of it. It is a frequently used solution in various fields, such as the real estate market in Romania, agriculture in Romania, or managing family assets in Romania. Given the complexity and significant implications of this type of contract, drafting, reviewing, and negotiating such a legal document requires the expertise of a civil lawyer in Romania. Therefore, the Romanian Law Firm Pavel Margarit and Associates recommends consulting a civil lawyer in Romania to provide complete legal assistance in drafting a usufruct agreement in Romania.

Contracts lawyer in Romania. What is the usufruct right?

According to the Romanian Civil Code, usufruct in Romania is defined as “the right to use another’s property and collect its fruits, with the obligation to preserve the substance of the property.” This is a primary real right and differs from other forms of use, as the usufructuary in Romania does not become the owner of the property, but only holds the right to use and benefit from the fruits (profits) the property produces. Usufruct in Romania can be established over both immovable and movable property. To understand the importance of a well-drafted usufruct agreement, it is essential to analyze its main components, namely the subject matter, the duration of the usufruct in Romania, which can be either temporary or for the lifetime of the usufructuary in Romania, as well as the rights and obligations of the parties. Given the contract’s complexity, usufruct in Romania poses multiple legal challenges, and the involvement of a civil contracts lawyer in Romania is crucial to protecting the parties’ interests at every stage of the contractual process, from drafting a usufruct agreement in Romania that details the conditions of use and maintenance of the property in Romania, to reviewing and negotiating the contract in the client’s favor.

Civil lawyer in Romania. Usufruct of shares and usufruct of dividends in Romania

The usufruct of shares in Romania and usufruct of dividends in Romania represents particular forms of usufruct involving rights over intangible assets, such as shares or interests in a company and the financial benefits generated by them. Since these rights have different characteristics compared to the usufruct of tangible goods, Romanian legislation imposes specific rules.

Commercial attorney in Romania. Usufruct of shares in Romania

The usufruct of shares in Romania refers to the right of a person to use and collect the fruits associated with the shares held in a company in Romania, without having the right to dispose of them. This form of usufruct in Romania can arise either through a contract or as a result of a testamentary provision in Romania. The usufructuary in Romania can participate in the company’s profits (LLC in Romania), having the right to collect the fruits associated with the shares over which the usufruct is established. The bare owner in Romania retains the right of disposal over the shares, being able to transfer them, but this operation cannot affect the right of usufruct in Romania. Additionally, the bare owner in Romania retains voting rights in the company’s General Meeting of Shareholders (GMS) in Romania unless otherwise agreed in the usufruct agreement in Romania. The usufructuary may be granted voting rights in the General Meeting of Shareholders (GMS) in Romania, but this must be clearly stipulated in the usufruct agreement in Romania or agreed upon by the parties. In the absence of an express clause, the voting right remains with the bare owner in Romania.

Commercial attorney in Romania. Usufruct of dividends in Romania

The usufruct of dividends in Romania is a specific form of usufruct that exclusively refers to the right to receive money distributed as dividends by a company, without involving any other rights over the shares in Romania that generate these dividends. The usufructuary acquires the right to receive the dividends in Romania associated with certain shares in Romania but does not hold any other prerogatives related to them, such as voting rights or the right of disposal over the shares. Moreover, dividends in Romania will be distributed only if decided so by the General Meeting of Shareholders (GMS) in Romania, as if the company in Romania does not distribute dividends in Romania in a given year, the usufructuary cannot claim other compensations.

The usufruct of shares in Romania and the usufruct of dividends in Romania provides a flexible and advantageous legal solution for managing the assets of an LLC or joint-stock company in Romania, but it requires careful analysis and meticulous drafting of agreements due to the complexity of the technical and legal aspects involved. In this context, a civil contracts lawyer in Romania, along with a commercial attorney in Romania, will support the client in Romania by drafting and negotiating the usufruct agreement in Romania, providing advice on fiscal implications and assisting in case of disputes ensuring efficient and proper management of the entire process.

The Romanian Law Firm Pavel Margarit and Associates offers specialized legal consulting and assistance in establishing usufruct of shares in Romania and usufruct of dividends in Romania, including managing the relationship between the usufructuary in Romania and the bare owner in Romania. Our team of commercial attorneys in Romania and civil lawyers in Romania can support you throughout the entire process, from drafting and negotiating usufruct agreements in Romania to resolving disputes that may arise between the parties. To benefit from our legal consulting in Romania, we invite you to complete the contact form available on our website at https://avocatpavel.com/contact/.

“Consulting an attorney specialized in the usufruct of shares and dividends in Romania is essential, as this type of agreement involves complex aspects related to voting rights, dividend distribution in Romania and related tax obligations. Legal assistance is essential to ensure compliance with all legal regulations and protect the interests of the parties involved,” stated Dr. Radu Pavel, Managing Partner at The Romanian Law Firm Pavel Margarit and Associates.

The usufruct agreement in Romania is a complex legal instrument that requires a solid understanding of legal norms and careful analysis of documentation. Legal assistance provided by a civil contracts lawyer in Romania is indispensable to ensure that the drafting of the usufruct agreement in Romania covers everything and complies with current legislation. Additionally, the involvement of a commercial attorney in Romania is essential in concluding the usufruct of shares or the usufruct of stocks agreements, as well as the dividends resulting from them in Romania. This type of usufruct in Romania raises special issues, such as managing voting rights in the General Meeting of Shareholders (GMS) in Romania, dividend distribution in Romania and compliance with fiscal requirements. The team of lawyers specialized in civil and commercial law in Romania at Pavel, Margarit and Associates Romanian Law Firm is available to provide personalized legal consulting at any stage of the process of drafting, reviewing and negotiating the usufruct agreement in Romania.