MOLDOVA Law and Practice Contributed by: Oleg Efrim, Gicu Bloșenco and Mihail Pitușcan, Efrim, Roșca and Associates
Efrim, Roșca and Associates MD-2012 București 72 str. Chișinău
Republic of Moldova Tel: +37322238301 Fax: +37322238303 Email: contacte@era.md Web: www.era.md
1. Types of Company, Share Classes and Shareholdings 1.1 Types of Company The limited liability company ( Societate cu Răspundere Limitată – S.R.L.) is the most common business type in the Republic of Moldova, making up over 75% of all entities in the State Register. Its popularity comes from its flexible rules, easy setup and low administra- tive demands. S.R.L.s serve businesses of all sizes, providing lim- ited liability to shareholders and a simple governance structure. In contrast, joint stock companies ( Societăți pe Acțiuni – S.A.s) constitute less than 1% of entities due to an undeveloped capital market and more com- plex regulatory and reporting requirements. Other available forms, like general and limited part- nerships, are rarely used because they do not offer partners limited liability protection. 1.2 Types of Company Used by Foreign Investors Foreign investors in the Republic of Moldova most often choose to establish an S.R.L., due to its flex- ible legal structure, quick formation process, modest minimum share capital of MDL1 (around EUR0.05) and low administrative expenses. Moldovan law on S.R.L.s is very liberal, offering a full range of corporate structuring tools familiar to inves- tors from well-established jurisdictions. An S.R.L. provides:
• a simple governance structure; • limited liability protection;
• the option of single-shareholder formation; • broad freedom in structuring shareholding and management; and • no nationality or residency requirements for share- holders or directors. These features make the S.R.L. the preferred vehicle for foreign investment in Moldova. 1.3 Types or Classes of Shares and General Shareholders’ Rights For S.R.L.sin Moldova, the law does not differenti- ate between types or classes of shares (social parts). Generally, each Moldovan leu (MDL) of share capital gives the holder one vote at the shareholders’ meet- ing. However, the articles of association may specify a different relationship between the nominal value of a share and the rights it confers, such as voting rights, dividends or liquidation proceeds. Depending on their goals, shareholders may prioritise either voting rights or economic rights. In S.A.s, the law permits the issuance of both ordinary shares and preference shares. Ordinary shares provide voting rights, the ability to receive dividends, and participation in asset distri- bution upon liquidation. Preference shares do not generally offer voting rights (unless laws specify oth- erwise) but have priority for dividends and asset allo- cation during liquidation. Ordinary shares can only be issued in a single class, while preference shares can be issued in one or more classes.
176 CHAMBERS.COM
Powered by FlippingBook