Common Mistakes in Share Transfers
Share transfers may seem straightforward — in practice, there are many pitfalls: shareholder consent, pre-emption rights, ONRC formalities, and tax implications.
Cătălin Gaina
Founding Partner · Corporate & M&A, Energy, Real Estate
Key takeaways
- Review the articles of association — they may impose stricter conditions than the law
- Pre-emption rights must be followed even when the transfer is at market price
- Wrong quorum at the GMS can invalidate the transfer
- ONRC registration is mandatory within 15 days
- Capital gains from the transfer must be declared and taxed
Why share transfers are more complex than they appear
A share transfer is the legal mechanism by which a shareholder transfers ownership of their stake in a limited liability company (SRL) to a third party or another shareholder. In theory, the procedure is clear. In practice, procedural errors can invalidate the transfer or generate costly disputes.
Mistake #1: Ignoring pre-emption rights
Romanian company law and articles of association frequently grant shareholders a pre-emption right — the right to purchase the shares themselves before they are offered to a third party, at the price offered by the third party.
The procedure for exercising pre-emption rights must be followed strictly: written notification of all shareholders, the response deadline, the price and conditions. Transfers completed without following this procedure are voidable at the request of the affected shareholders.
Mistake #2: Shareholder consent — wrong quorum
A transfer of shares to a third party generally requires the consent of all shareholders or at least those holding 3/4 of the share capital, unless the articles of association provide otherwise. The frequent mistake is ignoring the specific provisions of the articles of association, which may require unanimity or a different quorum from the statutory minimum.
GMS resolutions adopted with an insufficient quorum can be annulled in court, leading to the invalidation of the transfer and significant costs for all parties.
Mistake #3: Incomplete documentation at ONRC
Registration of the transfer at the National Trade Register Office (ONRC) is mandatory and must be completed within 15 days of the GMS resolution date. The file must contain: the authenticated transfer agreement or one with legalised signatures, the GMS resolution, the updated articles of association, and proof of fee payment.
Incomplete files are rejected, causing delays and sometimes complications regarding the validity of the transfer in relation to third parties.
Mistake #4: Overlooking tax implications
A share transfer generates tax obligations for the seller (capital gains tax) and, in some cases, for the company (if the transfer occurs at a value different from nominal value and involves related-party transactions).
The seller must declare and pay capital gains tax on the realised gain. Ignoring this obligation attracts penalties and interest from ANAF.
Conclusion
A properly executed share transfer requires: reviewing the articles of association, following the pre-emption procedure, adopting the GMS resolution with the correct quorum, complete ONRC documentation and tax compliance. Specialist legal assistance reduces the risk of challenge and ensures the validity of the transfer.
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