Transfer of shares, mergers and spin-offs – halted during the state of emergency31 March 2020
The exceptional context of the spread of the SARS-CoV-2 virus has led to the enacting of the state of emergency in Romania, as per the Presidential Decree no. 195/2020 (hereinafter referred to as “Decree no. 195/2020”). This Decree provides for the suspension or interruption of some statutory periods for the duration of the state of emergency.
Corporate operations affected by the measures
For companies, the measures affect a series of corporate operations that involve the observance of statutory periods, such as:
» the transfer of shares in limited liability companies to new shareholders,
» the restructuring of the companies by way of merger or spin-off, or
» the voluntary dissolution of companies.
In the case of these corporate operations, the measures provided for by the Decree suspend the lapsing of the term in which third parties (including tax authorities) have the possibility to formally oppose to those operations (commonly referred to as the opposition term). The opposition term, most often having a duration of 30 days, begins to lapse from the date of publication in the Official Gazette of the resolution regarding the respective corporate operation or, as the case may be, of the merger or spin-off project.
The immediate consequence is that the time frame required for completing the projects involving such corporate changes, regardless of whether they have been already started or they will be started under the state of emergency, will be prolonged. Nothing prevents the commencement of new operations of this type, but the extension of the deadlines caused by the state of emergency should be taken into account.
Summary of consequences
The suspension of the statutory periods leads to the following consequences for the aforementioned corporate operations:
» the operations already started, but for which the opposition term has not entirely lapsed before the commencement of the state of emergency, are suspended during the state of emergency, and the opposition term will resume upon the cancellation or expiry of the state of emergency.
» the operations started or intended to begin after the commencement of the state of emergency will be halted until the cancellation or expiry of the state of emergency, and the mandatory opposition term will start to lapse after the cancellation or expiry of the state of emergency.
» registration fees paid for suspended operations will not be reimbursed and will be held on account until the operation is completed following the cancellation or expiry of the state of emergency.
» the opposition terms will resume ex officio upon the cancellation or expiry of the state of emergency, thus it will not be required to submit a new application or to pay additional fees.
Corporate operations NOT affected by the measures
Other operations relating to commercial companies, that do not require the observance of an opposition term, are not affected by the measure described before. Therefore, operations like the sale of shares in joint-stock companies, the transfer of shares in limited liability companies between existing shareholders, appointments, revocations or extension of mandates of administrators, directors or auditors, share capital increases, opening or closing of secondary offices or branches, remain unaffected by the measures introduced by Decree no. 195/2020.
Obligations concerning UBO declarations
Similar measures were enacted in relation to the submission of affidavits concerning the ultimate beneficial owners (UBOs). The relevant legal obligations are suspended during the state of emergency and the deadline for submission was extended for a period of 3 months from the date of cancellation or expiry of the state of emergency. For more information on the measures taken in relation to the declaration of UBOs, please refer to the material available here.