ROMANIA Law and Practice Contributed by: Luiza Ionescu, Andreea Paraschiv, Amanda Csaki and Cezara Mitea, Stratulat Albulescu Attorneys at Law
tion, separate filings must be made with other compe- tent authorities, such as for merger control clearance and FDI approval.
ers, acquisitions, or other business combinations. Pursuant to Companies Law No 31/1990, directors and managers are required to exercise their duties of diligence, loyalty, and good faith in the best interest of the company. In practice, committees are generally formed as part of the company’s ordinary corporate governance structure – typically to address areas such as audit oversight, remuneration, or nomination of manage- ment candidates – rather than in connection with a specific transaction. Where a conflict of interest arises, Romanian law requires the concerned director to abstain from delib- eration and voting on the relevant matter, ensuring that the decision-making process remains impartial and aligned with the company’s interests. 9.3 Role of the Board In the context of M&A transactions, the board’s role is generally limited to informing the shareholders, evaluating the proposed transaction, and provid- ing a recommendation for or against it. The ultimate decision-making authority lies with the general meet- ing of shareholders, which approves or dismisses the transaction. While directors must avoid conflicts of interest and ensure proper disclosure, shareholder litigation chal- lenging the board’s recommendation is relatively rare, as shareholders are usually not bound by such recom- mendation. Key considerations for a potential buyer include: • verifying that the board provided all necessary information and recommendations to the share- holders; • ensuring that the transaction was approved in accordance with the company’s constitutive docu- ments and applicable law; and • assessing any pending or potential shareholder claims that could affect the validity or timing of the transaction. In practice, while the board plays a consultative role, the approval of the general meeting of shareholders is decisive, and the directors are generally not expected
9. Duties of Directors 9.1 Principal Directors’ Duties
Under Romanian law, the principal duties of direc- tors in the context of a business combination arise primarily from Companies Law No 31/1990, the Civil Code, and, where applicable, the company’s articles of association. The directors’ core responsibility in such restructur- ings is to prepare the business combination plan, outlining the key terms of the combination and the rights of the participating shareholders, and to draft an explanatory report that justifies the business combina- tion from both an economic and legal standpoint while describing its anticipated effects. These documents must be made available to the shareholders for review. In fulfilling these tasks, directors are also bound by their overarching duties of care, loyalty, and good faith in exercising their management and representa- tion powers. They must act in the best interests of the company, within the boundaries of the law and the company’s stated corporate purpose. Although Romanian law does not explicitly estab- lish a general duty toward stakeholders, directors’ responsibilities are not limited solely to shareholders. Certain obligations may indirectly extend to other stakeholders – such as employees, creditors, and business partners – particularly where their rights may be affected by the envisaged business combination (for example, in cases involving workforce transfers, financial restructuring, or potential insolvency). Nev- ertheless, the directors’ primary duty remains toward the company itself, a concept generally interpreted as encompassing the collective interests of its share- holders. 9.2 Special or Ad Hoc Committees Under Romanian law, there is no express statutory requirement for directors to establish special or ad hoc committees specifically for the purposes of merg-
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