A Draft Law on the Supplementation of the Commercial Act (‘CA’) has been published on the Public Consultation Portal of the Council of Ministers, which provides for a simplified and faster procedure for liquidation of companies. The innovations are in line with the Recovery and Sustainability Plan. The new legal framework aims at resolving the issue with the longevity of the liquidation proceedings, which at present take about a year, as well as at the establishment of the ‘one-stop shop’ principle.

The procedure envisaged in the new Article 274a of the CA could be applied following a decision of the General Meeting or of the shareholders with unlimited liability, if the company meets the following requirements simultaneously:

1.      It has not carried out business activity or has ceased to carry out business activity more than 12 months ago;

2.      It has not employed any employees or has terminated the labour relations with them more than 12 months ago;

3.      Has not been registered under the Value Added Tax Act or has terminated its registration more than 12 months ago;

4.      It does not have any outstanding debts towards the state and municipalities;

5.      There are no pending proceedings aimed at establishing tax liabilities and liabilities for compulsory social security contributions, to which the National Revenue Agency (‘NRA’) is a party.

The liquidator shall submit a declaration confirming the above circumstances, which shall be attached to the application for termination of business activity and for commencement of the liquidation proceedings.

The accelerated nature of the proceedings consists, first of all, in the elimination of the need for submitting a prior notification to the NRA. Under the general rules, the NRA is obliged to issue a certificate stating that it has been notified of the upcoming liquidation not later than 60 days as of the company's request. Only after obtaining this certificate, the company is entitled to apply before the Registry Agency for the opening of liquidation proceedings. The new accelerated procedure provides for this to be done ex officio, i.e. the company will be entitled to file an application with the Registry Agency and open liquidation proceedings without entering into communication with the NRA. In this hypothesis, the Registry Agency itself will notify the NRA of the liquidation commencement. The NRA, in turn, will verify within 30 days the absence or existence of the requirements as per Article 274a of the CA.

Facilitation is also envisaged in relation to the return of payrolls. The application for the issuance of a certificate for their due handing-over, will not be conducted through a territorial branch of the National Social Security Institute, as is the case in the general procedure, but directly through the Registry Agency.

A significant difference in the swift liquidation procedure, which is even more beneficial for its accelerated development, is related to the envisaged timeframes for distribution of the company's assets. The statutory term has been reduced by half and the liquidators will be able to start distributing assets within three months as of the day on which the invitation to creditors has been announced in the Commercial Register. The other provisions in the CA on liquidation proceedings apply subsidiarily to the new procedure.