Ultimate Beneficial Owners (UBOs) of a Romanian Company
Law no. 129/2019 on the prevention and combating of money laundering and terrorist financing provides the obligation of Romanian SRL companies to identify and declare the ultimate beneficial owners (UBOs). This law aligns Romania's legal framework with European standards, aiming to enhance transparency regarding the ownership structure of legal entities and to prevent illicit financial activities.
General AML requirements in Romania. Online lawyer.
Who is the UBO of an SRL?
The UBO is the natural person who ultimately owns or controls a SRL company or another type of organization or legal entity, either directly or indirectly.
UBOs are defined differently depending on the type of entity, according to Law no. 129/2019:
Companies registered with the Trade Registry and foreign corporate entities
Commercial companies are legal entities established in Romania to carry out economic activities and are required to register with the National Trade Registry Office (ONRC) to obtain legal personality. Registration grants the right to conduct business legally and enables authorities to monitor their operations.
Types of Romanian companies registered with the Trade Registry as per the law are:
Limited Liability Company (SRL): This is the most common type of company, characterized by a simple structure, low share capital, and limited liability for shareholders, based on their contribution. An SRL is established under a incorporation document, following the registration procedure set by law.
Joint-Stock Company (SA): Suitable for larger businesses, this type of company requires a minimum share capital and issues shares that can be traded on the stock market.
General Partnership (SNC): In an SNC, the partners have unlimited and joint liability for the company’s obligations, making it less popular due to the high risks involved.
Limited Partnership and Partnership Limited by Shares: In these companies, some partners (limited partners) have limited liability, while others (general partners) have unlimited liability for the company's obligations.
Subsidiaries and branches: These are extensions of a parent company organized under one of the company types allowed by law, with limited autonomy but registered with the Trade Registry.
Foreign corporate entities
Foreign corporate entities are legal entities established in other jurisdictions but conducting economic activities in Romania through subsidiaries, branches, or representative offices. These entities are subject to specific registration and authorization procedures with the Trade Registry. They must also comply with obligations related to declaring foreign investments in Romania.
Who is the UBO of the companies mentioned above?
The UBO of a Romanian company is the natural person who directly or indirectly owns or controls the company through ownership of a significant percentage of shares, voting rights, or equity, including bearer shares, or through control by other means. If a person holds 25% plus one share or more than 25% of the company’s capital, they are considered the UBO through direct ownership. If a foreign corporate entity, controlled by a natural person, holds the same proportion, this indicates indirect ownership.
If no UBO can be identified following reasonable efforts, or if there are doubts about the identified person’s status, the UBO is considered to be the person holding a senior management position, such as the administrator, board members, or delegated directors. Reporting entities must keep records of the steps taken to identify the UBO and any difficulties encountered during this process.
Trusts or similar legal arrangements
A trust is a legal arrangement where a person (the settlor) transfers ownership of assets or rights to another person (the trustee) to manage them for the benefit of a third party (the beneficiary). The trustee administers the assets following the settlor’s instructions and must act in the beneficiary's interest or for a specific purpose established by the settlor.
In these cases, the UBOs are:
The settlors and persons appointed to represent their interests.
The trustees.
The beneficiaries or, if their identity is unknown, the category of persons for whose benefit the trust operates.
Any other person who exercises ultimate control over the trust through direct or indirect ownership or other means.
Non-profit legal entities
Non-profit legal entities in Romania are organizations created to pursue activities for the general, community, or group interest, without seeking profit. These entities reinvest any revenue into achieving their objectives and do not distribute profits to members or founders. The most common types are associations, foundations, and federations.
The UBOs in non-profit entities include:
The associates or founders.
The members of the board of directors.
Persons with executive functions empowered by the board of directors.
The individuals or categories of persons in whose primary interest the associations or foundations were established.
Any other person who exercises ultimate control over the entity through any means.
For other legal entities and fund management or distribution entities:
The person who benefits from at least 25% of the assets, shares, or social parts, if the beneficiaries have been identified.
The group of persons for whose benefit the entity operates, if the beneficiaries are not individually identified.
The person who exercises control over at least 25% of the assets, including by appointing or removing most of the management members.
The person who manages the entity, if no UBO has been identified based on the above criteria, in which case the reporting entity must document the measures taken for UBO identification.
Obligations regarding UBO declarations for SRLs. Online legal services.
The law requires SRLs registered with the Trade Registry to submit a UBO declaration at incorporation and periodically whenever ownership structures change. Download GMS decision templates or other company legal documents.
Failure to comply may result in fines or dissolution of the SRL.
Importance of identifying UBOs of Romanian companies
Declaring UBOs promotes business transparency and reduces the risk of companies being used for illegal purposes, such as money laundering or terrorist financing. Having access to this information allows authorities to identify suspicious transactions quickly and take prompt action. Transparency in ownership also builds trust among investors and business partners, reducing the risks associated with working with opaque entities.
What public authority ensures compliance with AML obligations? Ask a lawyer.
The primary authority responsible for implementing and supervising the provisions of Law no. 129/2019 is the National Office for Prevention and Control of Money Laundering (ONPCSB).
ONPCSB collects, analyzes, and disseminates information on suspicious transactions to detect potential money laundering and terrorist financing activities. It also cooperates with other national and international authorities to combat these activities.
For UBO declarations, companies registered with the Trade Registry must submit their UBO information to the National Trade Registry Office (ONRC). For associations and foundations, UBO data must be sent to the Ministry of Justice. Through this collaboration, ONPCSB ensures the enforcement of anti-money laundering measures, while ONRC and the Ministry of Justice ensure compliance with transparency obligations.
What are the penalties for non-compliance with UBO declarations for SRL companies?
Failure to submit the UBO declaration by the SRL’s legal representative constitutes a contravention and is punishable by a fine ranging from 5,000 to 10,000 lei. If the declaration is not submitted within 30 days after the fine is applied, ONRC may request the dissolution of the company through the courts. However, the company can avoid dissolution if it fulfills its obligations before the court ruling.
Frequently Asked Questions about UBOs of a SRL Company
Who is the ultimate beneficial owner (UBO) of an SRL company?
The UBO of an SRL is the natural person who directly or indirectly owns or controls at least 25% of the social shares, voting rights, or the company’s capital. This individual exercises ultimate control over the company's activities and strategic decisions.
Who must declare the UBO for an SRL company?
The legal representative of the SRL - usually the company's director - is responsible for submitting the UBO declaration to the National Trade Registry Office (ONRC).
When must the UBO declaration for an SRL company be submitted?
The UBO declaration for an SRL must be submitted at the company's incorporation and whenever changes occur in the ownership structure or UBO’s information, within 15 days of the change.
What documents are required for the UBO declaration of a SRL company?
The declaration can be submitted in writing at the ONRC or electronically with a qualified electronic signature. It must include the UBO’s identification details: full name, nationality, date and place of birth, domicile and residence, and the criteria by which the person is considered a UBO.
What are the penalties for failing to declare the UBO of a SRL company?
Failure by the SRL’s administrator to submit the UBO declaration constitutes a contravention and is punishable by a fine ranging from 5,000 to 10,000 lei. If the SRL does not remedy the situation within 30 days from the application of the fine, the ONRC may request the court to dissolve the company. Download an administrator mandate contract for SRL.
What happens if the UBO of a SRL company cannot be identified?I
If no individual can be identified as directly or indirectly controlling the SRL, the UBO is considered to be the person holding a senior management position (e.g., the administrator or director). Download template contract for director appointment.
How can the UBO declaration of a SRL company be updated?
Any change in the UBO’s information must be reported to the ONRC within 15 days by submitting a new declaration.
Why is it important to declare the UBO of a SRL company?
Declaring the UBO enhances transparency in the business environment and helps prevent money laundering and terrorist financing. It allows authorities to monitor economic activities and detect suspicious transactions effectively.
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