Romanian Justice Ministry Says Parliament To Blame For Company Law Infringement

The ministry added it will propose a government emergency ordinance to pass the amendments.

The European Commission decided Thursday to pursue infringement procedures against Romania and four other member states over failure to transpose into national law a Directive simplifying the raising of capital and the restructuring of capital ownership in public limited liability companies.

The Justice Ministry said in a press release Friday that the European Commission issued a reason opinion, the second stage in infringement procedures, on Romania’s failure to transpose into national legislation provisions of Directive 2006/68EC amending Directive 77/91/EEC regarding the formation of public limited liability companies and the maintenance and alteration of their capital.

Romania has two months to transpose the Directive into national law and notify the European Commission, otherwise it will be referred to the European Court of Justice.

The Romanian Justice Ministry said the Government notified the Senate in June on amendments to company laws, which the Senate adopted later that month. The amendments were then debated in the Chamber of Deputies in September and October, but the Chamber failed to meet quorum and vote on the law.

The Ministry of Justice added it will propose that the government adopt the amendments by means of emergency ordinance in the next Cabinet meeting.

"The Commission will send reasoned opinions to Belgium, Spain, Luxembourg, Portugal and Romania regarding the Directive simplifying the formation, maintenance and alteration of companies’ capital,” the European Commission said in its press release Thursday.

The Directive modifying the regime of formation, maintenance and alteration of companies’ capital was adopted in 2006 and aims at facilitating and simplifying the raising of capital and the restructuring of capital ownership in public limited liability companies.

The Directive enables member states, under certain conditions, to discharge companies from specific reporting requirements and to facilitate the restructuring of capital ownership.

The Directive also provides for harmonized safeguards for creditors in the context of capital reduction.

The transposition deadline for the Directive was April 2008.