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Law amending the Companies Law

We have summarized below the main amendments brought by law no. 163/10 July 2018 (the “Law”) to the Companies law no. 31/1991 (the “Companies Law”) and to the Accounting law no. 82/1991 (the “Accounting Law”).

The newly introduced legal framework enters into force within three days as of its publication, respectively on the 15th of July 2018.

General provisions

The Law amends the Companies Law in order to allow for the quarterly distribution (not only annual distribution) of dividends. The Accounting Law is also amended in order to allow for the new provisions of the Companies Law to be put in practice.

The quarterly distribution of dividends is optional

The quarterly distribution of dividends now becomes possible based on interim financial statements within the limit of the net accounting profit obtained quarterly, plus possible retained earnings and amounts withdrawn from reserves available for this purpose, from which any accumulated losses and amounts placed into reserves will be subtracted as per the applicable legal framework and corporate provisions.

The quarterly distributed dividends may be paid within the term determined by the general meeting of shareholders or, as the case may be, by the applicable provisions.

The quarterly distribution of dividends may be performed based on the interim financial statements approved by the general meeting of shareholders (a) audited, if the respective person is under the legal obligation to audit its annual financial statements or chooses to audit its financial states, as per the legal provisions, or (b) checked by censors if the annual financial statements are to be checked by censors as per the applicable legal framework.

Adjustment of the amounts resulting from the quarter distribution of dividends

The adjustment of the balance resulting from the distribution of the dividends performed during the year is to be made based on the annual financial statements.

The payment of the balance resulting from this adjustment is made within 60 days as of the approval of the annual financial statements corresponding to the ended financial year, regardless whether the payment obligation belongs to the shareholder with respect to the received dividends or to the company.

Sanctions

The criminal offense regulated by the Companies Law which sanctions the receipt or the payment of dividends, in any way, from fictitious profits or profits which could not have been distributed annually, as per the annual financial statements, are completed by provisions referring to the quarterly distribution of dividends, sanctioning: the receipt or payment of dividends, in any form, from fictitious profits or profits which could not have been distributed during the financial year based on interim financial statements.

For additional information, please contact:
Dragoș Radu, Partner – Head of Legal
Radu Diaconu, Associate Partner