Dividend Distribution by a Romanian SRL: Approval Documents Before Payment
Corporate decisions · Romanian SRLs · Dividend payments
The owners have agreed that the Romanian company should pay a dividend.
Before the bank transfer, the company needs a decision supported by the right accounts, adopted by the right shareholders and aligned with the payment and tax record.
In brief: A profitable year or a positive bank balance does not, by itself, authorise a dividend payment by a Romanian limited liability company (SRL).
The accountant should confirm the distributable amount and accounting treatment, while legal counsel reviews the corporate approvals, constitutive documents and distribution mechanics.
The recipient-specific tax position requires its own assessment before payment.
A focused legal review can identify the missing approval or constraint before a payment is released.
This article is for founders, foreign parent companies, investors and directors preparing a specific SRL distribution.
It explains when legal support is useful and what the review covers, without offering a substitute for the company’s accounting and tax advice.
Can a Romanian SRL pay dividends once it has cash?
Cash is not the legal test.
A distribution needs profit determined according to law and an appropriate corporate decision, with losses, reserves and net assets checked against the current accounts.
Article 67 of Companies Law no. 31/1990 on the Romanian Legislative Portal provides that dividends may be distributed only from profit determined according to law.
The same article provides for annual distribution and, optionally, quarterly distribution based on interim financial statements, subject to annual reconciliation.
A bank statement therefore cannot answer whether the amount proposed for payment is distributable.
Liquidity matters to the business, but the legal distribution decision depends on the financial basis and a valid shareholder approval.
The director and accountant should distinguish accounting profit, cash available for operations and an amount that shareholders have lawfully approved for distribution.
A company may have collected a large customer invoice yet carry prior losses, required reserves or other constraints that change the distributable figure.
Conversely, an approved dividend may remain unpaid because cash is needed for working capital; the legal entitlement and payment planning are related but different questions.
The review should start with the latest approved accounts and the actual period from which the dividend is proposed to come.
Atrium’s corporate and commercial lawyers in Romania can review the company documents and proposed decision alongside the financial analysis supplied by the accountant.
Which documents should be reviewed before the dividend decision?
Start with the financial basis, the company’s current constitutional documents and a draft resolution that identifies the amount and recipients.
The exact pack depends on whether the proposed distribution is annual or interim, whether there is one shareholder or several, and whether any owner is abroad.
The financial statements establish the starting figures, while the company’s articles of association (constitutive act) determine whether the default allocation and voting arrangements have been changed.
Article 67 generally allocates dividends in proportion to paid-up capital participation unless the company’s articles of association provide otherwise.
For an annual decision, Article 194(1)(a) gives the SRL shareholders’ general meeting the task of approving the annual financial statements and determining the allocation of net profit.
A sole shareholder exercises those meeting powers and records the decision without delay in writing under Article 196¹.
Where there are several owners, the meeting, notice, representation and voting route must be checked against the law and current articles.
A foreign parent’s internal approval does not by itself replace the Romanian subsidiary’s decision.
Our guide to signing Romanian shareholder resolutions from abroad explains why the voting authority, decision record and signing method should be treated separately.
The bank instruction should then match the adopted resolution, recipient identities and payment schedule.
What decision is the company preparing?
Select the closest situation to see the first documents a focused review would compare.
Annual distribution review
Compare the approved annual financial statements, carried-forward losses, reserves, ownership record and draft profit-allocation resolution.
Confirm that the payment instruction reflects the amount and recipients actually approved.
Interim distribution review
Obtain the interim financial statements, proposed quarterly decision and record of any earlier interim dividends.
Plan the annual reconciliation and assess whether a later repayment of excess interim dividends could arise.
Foreign-parent payment review
Check the Romanian company’s decision and the foreign shareholder’s identity and signing authority.
Coordinate the recipient’s residence and any claimed treaty or domestic exemption with the tax adviser before determining withholding and payment mechanics.
The selector identifies review areas; it does not confirm that a distribution is lawful or tax-exempt.
What can prevent a profitable SRL from making the proposed distribution?
Prior losses, required reserves and net-asset deterioration can change the answer even when the current year shows profit.
These checks should be made before the shareholders approve a number, not after the bank transfer is scheduled.
Articles 69 and 69¹ of Companies Law no. 31/1990 address losses, reserves and restrictions on distributions where net assets have fallen.
Where a loss of net assets has been established, Article 69 requires the subscribed share capital to be restored or reduced before profit can be allocated or distributed.
Article 69¹ adds specific checks for carried-forward accounting losses and net-asset deterioration.
Its first paragraph conditions distribution from the current year’s profit where carried-forward accounting losses exist on legal reserves, coverage of those losses and reserves required by the constitutive act.
Where approved annual accounts show net assets below half the subscribed share capital, its second paragraph permits distribution from the current year’s profit only after net assets have been restored to the statutory minimum.
Its third paragraph applies a corresponding restriction to interim dividends on the basis of approved interim accounts.
These are distinct questions from whether the business can afford a transfer in the coming month.
The accountant should confirm the figures and applicable financial-statement treatment; counsel can test the proposed resolution and payment against the corporate restrictions.
If the SRL also owes money to a shareholder, the dividend and loan repayment should not be merged into one undefined “owner payment.”
Article 67(2³) restricts loans by companies distributing interim dividends until the annual differences are reconciled, while Article 67(2⁴) restricts repayment of certain shareholder or affiliate loans where approved annual accounts show net assets below the statutory threshold.
Article 67(2⁵)–(2⁶) also provides for liability and administrative sanctions in the circumstances specified by law, so a proposed owner payment should be reviewed against the current text.
Our guide to shareholder loans in Romania addresses the separate funding and repayment questions.
Does an interim dividend follow the same document route as an annual dividend?
No.
A quarterly distribution requires interim financial statements and later regularisation through the annual statements; it should not be treated as an informal advance against anticipated profit.
Article 28(8¹) of the Accounting Law no. 82/1991 requires interim financial statements where a company chooses quarterly dividend allocation.
Article 67(2¹) of the Companies Law requires the annual statements to show the dividends allocated during the year and to reconcile the resulting differences.
If reconciliation shows that shareholders received more than they were entitled to, Article 67(2²) requires repayment within 60 days after approval of the annual financial statements and provides for late-payment interest after that period.
The company should therefore know what it has already distributed in the same year, not review the latest quarter in isolation.
A later downturn, a corrected accounting entry or a financial-statement adjustment can make an apparently convenient interim payment more complicated.
Where an international group expects a recurring cash sweep, its treasury calendar should accommodate the Romanian accounting and approval process rather than assume every transfer can be labelled a dividend after the fact.
A targeted review can keep the interim decision, accounts, recipient schedule and later annual reconciliation in one coherent record.
How should the resolution describe the payment?
The decision should clearly identify the accounts and profit being allocated, the approved dividend amount, the beneficiaries and the intended payment terms.
It should match the articles, ownership record and accounting treatment.
A generic instruction that “profit will be paid to the parent” can leave material questions unanswered.
Which financial year or interim period is involved, which amount is distributed and what portion remains in the company?
Who held the relevant participation, and does the articles-of-association allocation rule differ from the statutory default?
Has the sole shareholder decided in writing, or did a multi-shareholder SRL adopt a valid meeting decision?
The answers can matter where a shareholder has recently joined or exited, ownership is disputed or a minority investor has negotiated consent rights.
A separate shareholder deadlock review may be needed if a distribution cannot obtain the necessary vote.
Do not assume that a private shareholder agreement changes the company’s articles or cures an incorrectly adopted resolution.
When the owner is a foreign company, confirm who may represent it and what authority evidence is available before circulating the decision for signature.
Atrium can prepare or review the proposed decision and identify any linked corporate action, while the accountant confirms the underlying profit and accounting entries.
The Romanian approval and the recipient’s tax treatment should be checked as separate workstreams that meet at payment.
A foreign address or EU incorporation alone does not establish a withholding exemption.
The company should identify the legal recipient, current participation, payment account and documentation supporting any proposed treaty or domestic-law treatment.
The Romanian Fiscal Code on the official Legislative Portal contains different dividend rules depending on the recipient and any conditions for relief.
The applicable tax position may depend on residence, shareholding history, beneficial ownership, supporting certificates, distribution date and payment date.
For a cross-border payment, the tax adviser should verify any applicable double-tax treaty and whether domestic relief implementing the EU Parent–Subsidiary Directive is available.
Tax treatment can change with legislation and should be confirmed for the specific distribution and payment dates.
Where treaty or EU relief is claimed, the foreign recipient’s tax-residence certificate and other supporting evidence should be assessed before payment.
A tax adviser should confirm the withholding, declaration and payment obligations for the actual recipient rather than assume that the domestic headline rate is the amount due in every case.
That analysis should be completed before the net payment is calculated and the bank instruction issued.
For a group that recently acquired its Romanian company, the ownership documents and the dividend resolution should tell the same story.
Our guide to changing shareholders in a Romanian company discusses the separate registration and ownership record.
What if a distribution has already been approved or paid incorrectly?
Preserve the resolution, accounts and payment trail, then assess the actual defect before adopting a corrective step.
A new resolution, accounting correction, repayment or tax amendment may address different problems and should not be treated as interchangeable.
Article 67(4) of the Companies Law deals with repayment of dividends paid contrary to specified distribution rules where the company proves that the recipients knew or should have known of the irregularity.
Article 67(5) states a three-year limitation period from distribution for the restitution action concerning dividends paid contrary to paragraphs (2) and (3); other claims require their own timing analysis.
The separate annual reconciliation mechanism for interim dividends may also create a repayment obligation.
These rules do not imply that every documentary error makes every dividend automatically repayable on identical terms.
There may also be governance, creditor, insolvency or tax consequences depending on the company’s condition and the payment history.
If the issue is discovered before transfer, pause the payment instruction while the relevant legal, accounting and tax questions are resolved.
If payment has occurred, establish the date, amount, recipient and accounting entry before altering the company record.
The same care matters when one owner received money described as a loan repayment, management fee or advance while another expected a dividend.
Labels cannot substitute for the legal basis of each payment.
What can Atrium review before your SRL pays?
A focused instruction can produce a clear answer on the corporate approval, an improved resolution and a list of issues for the accountant or tax adviser before the transfer.
The scope depends on the company, ownership structure and documents already available.
For a straightforward sole-shareholder annual distribution, the work may focus on the approved accounts, written decision, signatory authority and payment wording.
For several shareholders, the review may include notice, majority, unequal allocation provisions, reserved matters or an existing dispute.
For an interim distribution, the company may need its prior payment history and a reconciliation plan considered alongside the interim accounts.
For a foreign parent, we can coordinate Romanian corporate documentation with the tax and banking questions identified by the relevant advisers.
We do not present a legal review as an audit of the accounts or a guarantee that a particular dividend can be paid.
Send the current articles, shareholder details, latest approved annual statements, any interim statements, proposed amount, draft decision and intended recipients.
If prior losses, owner loans or earlier interim dividends exist, include that history at the outset.
The firm can then define a proportionate scope and fee for the decision in front of you.
Request a Romanian dividend decision review
Frequently asked questions
Can the sole shareholder approve a dividend without a meeting?
Yes, the sole shareholder exercises the general meeting’s powers and must record the decision without delay in writing under Article 196¹ of Companies Law no. 31/1990.
The financial basis and distribution restrictions still apply.
A foreign corporate shareholder must also act through an appropriately authorised representative.
Can an SRL distribute dividends every quarter?
Romanian law permits optional quarterly distributions based on interim financial statements, followed by reconciliation in the annual statements.
Before approving an interim amount, check prior distributions, losses and the relevant net-asset position.
The accountant should confirm the accounts and any required reporting for the specific period.
Is an available bank balance enough to approve the payment?
No.
Cash availability does not establish distributable profit or replace the accounts and shareholder decision.
Prior losses, reserves and the statutory net-asset rules can affect the amount available even when cash is present.
Can dividends be paid if prior-year losses exist?
Not automatically.
Current company law requires the relevant carried-forward accounting loss and reserve position to be addressed before distributing profit from the current year.
The accountant should confirm the financial figures, and counsel should review the proposed distribution against Article 69¹ and the company’s constitutive act.
Does a foreign parent automatically receive dividends without Romanian withholding tax?
No.
The recipient’s tax status and any exemption or treaty relief must be checked against the applicable conditions and supporting documents.
The Romanian company’s corporate approval and the tax position should be aligned before the net amount is paid.
What if the SRL also owes its owner a shareholder loan?
A loan repayment and a dividend have distinct legal bases and restrictions.
Review the loan agreement, approved accounts, net assets and any interim-dividend history before selecting the payment route.
Do not use a dividend resolution as a generic authority for repaying debt.
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