Commercial Companies The commercial companies are regulated by

Commercial Companies

The commercial companies are regulated by Law no. 31/1990 on commercial companies, republished, amended and completed, which is the general law that regulates the matter. Beside this general law, there are special laws which regulate specific companies, such as banking companies, insurance companies and so on. These provisions are to be completed by the Commercial Code and the Civil Code. In addition, because commercial companies are legal persons, they are also regulated by the Decree no. 31/1954 on natural and legal persons.

The Law no. 31/1990 regulates the following types of companies: - general partnership; - limited (sleeping) partnership by shares; - limited liability company; - company by shares or joint stock company. It contains general rules that are applicable to any commercial company and special rules related to each category of commercial companies.

The commercial companies are not defined either by the Law no. 31/1990 or by the Commercial Code. In this case, we have to look for a definition in the Civil Code. The Civil Code regulates the company contract, meaning the civil association. Thus, according to article 1491 Civil Code, the company is a contract by which two or more persons (the associates) agree to put together some goods in order to perform together a certain activity for the purpose of obtaining and sharing the profits. This definition refers to the civil association, but certain elements may also be used for defining the commercial company. Although the two forms are not similar, there are four elements that must be fulfilled by any of them: - they are set up by a company contract; - the existence of a common fund, constituted by the contributions of the members; - the goal of the associates is to obtain and share the benefits; - affectio societatis, meaning the will of the associates to participate in the performance of the common activity and the common use of contributions and capital in order to obtain profits.

Anyway, the commercial company has some distinctive features in relation to the civil association, as follows: - the economic activity of the commercial company, meaning the performance of objective commercial facts; - the commercial company has legal personality, it is a legal person. As a consequence, taking into account all these elements, the definition of the commercial company is the following: The commercial company is a group of persons, set up by a company contract and having legal personality, in which the associates agree to put together some goods in order to perform objective commercial facts for the purpose of obtaining and sharing the profits.

The juridical forms of commercial companies According to article 2 form the Law no. 31/1990 republished, the commercial companies can only be set up in one of the following juridical forms: general partnership; limited (sleeping) partnership by shares; limited liability company; company by shares (joint stock company). Thus, it is not possible to constitute a commercial company in other form than those provided by article 2 from the Law no. 31/1990 republished. The differences between the forms of commercial companies are determined by the extent of liability of associates for the debts of the company. Therefore: a. the obligations of the general partnership are secured by its patrimony and the unlimited and joint liability of all associates. b. the limited partnership has two categories of partners: active partners and sleeping partners. The obligations of the limited partnership are secured by its patrimony and the unlimited and joint liability of active partners; the sleeping partners are liable only within the limits of their contribution to the capital of the partnership;

C. THE LIMITED PARTNERSHIP BY SHARES HAS ALSO TWO CATEGORIES OF PARTNERS: ACTIVE PARTNERS AND SLEEPING PARTNERS. ITS REGISTERED CAPITAL IS DIVIDED INTO SHARES AND ITS OBLIGATIONS ARE SECURED BY THE PATRIMONY OF THE PARTNERSHIP AND THE UNLIMITED AND JOINT LIABILITY OF ACTIVE PARTNERS; THE SLEEPING PARTNERS ARE LIABLE ONLY WITHIN THE LIMITS OF THEIR CONTRIBUTION TO THE CAPITAL OF THE PARTNERSHIP; D. CONCERNING THE COMPANY BY SHARES, ITS REGISTERED CAPITAL IS DIVIDED INTO SHARES AND THE OBLIGATIONS OF THE COMPANY ARE SECURED BY ITS PATRIMONY; THE SHAREHOLDERS ARE LIABLE ONLY WITHIN THE LIMITS OF THEIR CONTRIBUTION TO THE REGISTERED CAPITAL OF THE COMPANY; E. THE OBLIGATIONS OF THE LIMITED LIABILITY COMPANY ARE SECURED BY ITS PATRIMONY AND THE ASSOCIATES ARE LIABLE ONLY WITHIN THE LIMITS OF THEIR CONTRIBUTION TO THE REGISTERED CAPITAL OF THE COMPANY. HOWEVER, THE PERSONS WHO WANT TO SET UP A COMMERCIAL COMPANY ARE FREE TO CHOOSE BETWEEN THE FIVE JURIDICAL FORMS PROVIDED BY THE LAW. THE JURIDICAL FORM CHOSEN BY THE ASSOCIATES MUST BE MENTIONED IN THE CONSTITUTIVE CONTRACT OF THE COMPANY. AFTER CHOOSING THE JURIDICAL FORM OF THE COMPANY, THE ASSOCIATES ARE BOUND TO OBSERVE THE LEGAL PROVISIONS WHICH REGULATE THE SETTING UP AND THE FUNCTIONING OF THAT TYPE OF COMPANY.