On December 30, 2016, the Law on amendment and supplement of the Commerce Act (LASCA) was promulgated in issue 105 of the State Gazette1. Many of the introduced amendments concern bankruptcy proceedings but there are also other amendments to the Commerce Act aimed at providing legal protection against the so-called “corporate hijacking” – such other amendments will be subject to this article.
Numerous signals to the Ministry of Justice have become the particular reason for passing the law amendments – such signals referring to instances of corporate hijacking through change of the company owners (most often of single-person limited companies) or through changes in the company’s management further allowing disposition of the assets of the respective company (real estate properties, bank accounts or other property rights) before the actual owners become aware of such disposition.
In particular the hijacking is carried out by filing false documents with the Commercial Register, such as: contracts for transfer of company shares pursuant to Art. 129 of the Commerce Act; consents and signature specimens of the legal representatives of the companies; minutes with resolutions of the General Meeting of shareholders, etc.
The proposed amendments to the Commerce Act are aimed at protecting the public interests from criminal activity, preserving the economic prosperity through ensuring an efficient business environment, supporting financial stability through protection of business security and reliability. Both the achievement of speed and simplicity in day-to-day business operations and ensuring legal certainty with regard to the information on the companies’ management and status are of primary significance – the balance between these two basic principles helps to create favorable environment for starting and developing a new business.
The above determines the particular legal measures which have been introduced, as follows:
A. Amendments to Art. 15, par. 1 and Art. 129, par. 2 of the Commerce Act, according to which the contracts for transfer of a commercial enterprise and company shares must be concluded not only with notarized signatures, as it has been up until now, but with notarization of both the signatures and the content, made simultaneously.
B. A new par. 4 to Art. 137 of the Commerce Act has been created, providing that resolutions for admitting and expelling shareholders, giving consent on transfer of company shares to a new member, electing directors and acquiring and alienating real estate properties and real rights over them must be adopted by means of minutes with notarized signatures and content, made simultaneously, unless the Articles of Association provide for a written form only. The new paragraph explicitly provides for the nullity of any resolutions adopted in breach of the new form requirement.
The introduction of two consecutive notarial certifications is intended to act as a barrier to the creation and use of false documents allowing the fraudulent schemes as mentioned above, as well as to facilitate the process of proving in the event of a judicial dispute or prosecution (since an original copy of the contested document is to be kept by a notary public).
C. LASCA provides also for additional amendments to related texts of the Commercial Register Act and the Notaries and Notarial Practice Act.
Amendments to Art. 21 of the Commercial Register Act require from the registration officials with the Registry Agency to verify whether or not documents subject to notarization of signatures and content have been duly entered into the database of the Information System pursuant to Art. 28b of the Notaries and Notarial Practice Act, as well as whether or not the presented documents correspond to those entered into the said Information System. A new par. 2 to Art. 90 of the Notaries and Notarial Practice Act has been created, providing that no calculation of a proportionate fee is allowed upon notarization of signatures and content in the above situations.
Practice will show if and to what extent the new measures will prove to be effective. Although the law amendments are well justified in terms of the objectives pursued, it is not yet entirely certain whether the latter are to be achieved through the introduced measures as there is still a relatively easy way to circumvent the enhanced legal protection.