Shareholder Agreement Romania: Guide for Investors and Entrepreneurs
Shareholder Agreements in Romania – The 2025 Guide for Investors and Entrepreneurs
A shareholder agreement in Romania is a private contract between company shareholders that regulates their rights, obligations, and internal governance. While not mandatory, a well-crafted shareholder agreement can save tens of thousands of euros and years of litigation later.
Need Professional Help?
At Atrium Romanian Lawyers, we assist clients with corporate & commercial law, contract drafting, shareholder disputes, and company formation.
What Is a Shareholder Agreement?
A shareholder agreement is a private contract between shareholders that regulates shareholder rights and obligations, management and governance rules, voting procedures, profit distribution, share transfers and exit mechanisms, deadlock resolution, and restrictions on competition and confidentiality.
Key advantage: Unlike the Articles of Association, shareholder agreements are not filed publicly, making them ideal for protecting proprietary deal structures and maintaining sensitive voting arrangements.
Why Romanian Companies Benefit from Shareholder Agreements
Romanian Companies Law (Law 31/1990) provides only baseline protections. Majority rule dominates decision-making, share transfer restrictions are minimal in SRLs and SAs, there is no automatic deadlock resolution, and founder exit rules are not regulated.
A shareholder agreement allows shareholders to customize protections beyond these statutory defaults, providing greater stability and clarity, particularly for startups and companies with foreign investors.
Benefits for Foreign Investors
- Secure veto or consent rights for important decisions
- Establish information and inspection rights beyond statutory minimums
- Protect capital through pre-emption or anti-dilution mechanisms
- Clarify dispute resolution through arbitration clauses
Benefits for Romanian Startups
- Align founders on vision and responsibilities
- Define vesting schedules for equity
- Prevent conflicts from early founder departures
- Protect intellectual property created by founders
Essential Clauses in a Romanian Shareholder Agreement
1. Capital Contributions & Ownership Structure
Clearly define each shareholder’s initial contribution (cash, assets, IP), future contribution obligations, and ownership percentages and voting rights.
IP Consideration: Without explicit assignment clauses, IP created by founders may legally remain with the individual. To ensure enforceability, draft separate IP assignment agreements and include employment contracts with IP clauses for founder-employees.
Enforceability: Strong if properly documented.
2. Voting Rights and Decision-Making
Shareholder agreements cannot enforce voting obligations in Romanian law. However, they can require supermajorities for internal contractually binding decisions, create additional shareholder rights and internal governance rules, and define reserved matters for shareholder consultation.
Coordination: To affect the company externally, critical voting thresholds must also appear in the Articles of Association.
3. Management Roles & Responsibilities
Define roles, authority, and reporting obligations for CEO, Managing Director, CFO, CTO, and specify decision authority limits and key performance indicators.
Enforceability: Strong. These internal rules are binding among shareholders.
4. Profit Distribution
Set frequency and conditions for dividend distribution, minimum or mandatory reinvestment thresholds, and handling of losses.
Tax Considerations: Dividends face 5% withholding tax for Romanian residents, while management fees vs. dividends have different taxation and deductibility implications. Coordinate with a tax advisor to optimize both corporate and personal tax outcomes.
5. Share Transfer Restrictions
Common clauses include right of first refusal (ROFR), right of first offer (ROFO), tag-along rights (minority protection), drag-along rights (majority exit facilitation), lock-up periods, and transfers to affiliates.
Important Note: Binding between shareholders (strong enforcement) but external enforceability requires Articles of Association registration.
6. Exit Clauses
Include buy-out mechanisms, put/call options, shotgun clauses, drag-along and tag-along clauses, and valuation methodologies.
Enforceability: Buy-sell and call/put options are enforceable; drag-along/tag-along are enforceable internally; external enforceability requires Articles coordination. Valuation clauses are enforceable if clearly defined.
7. Deadlock Resolution
Common mechanisms include mediation → arbitration → binding resolution and buy-sell triggers (Russian roulette, Texas shoot-out).
Important: Romanian law does not enforce vote obligations. Deadlock clauses must rely on mechanisms other than forcing votes. Enforceability is strong if designed around buy-sell or arbitration.
8. Non-Compete and Confidentiality
Specify duration, scope, and geographic limits with reasonable exceptions.
Legal Limits: Article 21 of the Romanian Constitution protects the right to work. Non-compete clauses must be reasonable in time, geography, and scope. Overbroad clauses may be void.
9. Dispute Resolution
Choose between domestic arbitration (VIAC, Romanian Chamber of Commerce) or international arbitration (ICC, LCIA, Vienna). Specify language and governing law.
Enforceability: Strong. Foreign arbitral awards are recognized under the New York Convention.
10. Notarization
Not legally required but provides proof of authenticity and signature dates, enhances enforceability against heirs or successors, with cost of €50–€150.
Common Mistakes and Overstatements
❌ Assuming voting clauses are enforceable
Shareholders cannot be forced to vote a certain way. Use buy-sell options or call options instead.
❌ Relying solely on shareholder agreements for external effect
Certain provisions must also appear in Articles of Association to be externally enforceable.
❌ Using US/UK-style vesting without legal mechanisms
Must be implemented via call options or conditional transfers under Romanian law.
❌ Expecting full minority protection without legal coordination
Agreements add protections but cannot override statutory rights.
❌ Overbroad non-compete or IP clauses
Must be reasonable in duration, geography, and scope to be enforceable.
Updating Your Agreement
Review your shareholder agreement every 2–3 years or after major events such as:
- New investors: Add rights, pre-emption clauses, anti-dilution protections
- Founder changes: Update vesting, non-compete, management roles
- Business pivots: Adjust permitted activities, IP clauses, exit rules
- Regulatory changes: Beneficial ownership disclosure, corporate governance, foreign investment rules
📹 Video Guide: Understanding Romanian Shareholder Agreements
Watch our comprehensive video on shareholder agreement essentials, enforceability, and best practices for protecting your investment.
Useful Resources & Links
Romanian Government & Regulatory Bodies
- ONRC (Trade Registry) – Share registration and corporate records
- Ministry of Justice – Legal oversight and corporate law
- ANPC (Consumer Protection) – Consumer protection authority
Arbitration & Dispute Resolution
- VIAC (Vienna International Arbitration Centre) – International arbitration
- ICC (International Chamber of Commerce) – Global arbitration services
- LCIA (London Court of International Arbitration) – International arbitration
Atrium Romanian Lawyers Services
FAQ – Shareholder Agreements in Romania
Q: Is a shareholder agreement mandatory in Romania?
A: No, it’s not legally required. However, it’s strongly recommended for any company with multiple shareholders, foreign investment, or high-value assets. It provides crucial protection against disputes, deadlocks, and unclear governance.
Q: Can I enforce voting obligations in a shareholder agreement?
A: No. Romanian courts cannot enforce direct voting obligations. However, you can enforce contractual remedies like buy-sell options, call/put options, or drag-along/tag-along mechanisms to achieve similar outcomes.
Q: What’s the difference between a shareholder agreement and the Articles of Association?
A: A shareholder agreement is private and not filed publicly; the Articles of Association is the company’s founding document and must be registered with the Trade Registry. Key external-facing provisions should appear in both for full enforceability.
Q: How do I protect IP created by founders?
A: Include explicit IP assignment clauses in the shareholder agreement, draft separate IP assignment agreements, and require employment contracts with IP clauses for founder-employees. Without these, IP may legally remain with the individual.
Q: Can I use US-style vesting in Romania?
A: Not directly. Romanian law does not recognize US-style vesting. Instead, implement vesting through enforceable legal mechanisms such as call options, conditional share transfer agreements, or repurchase rights.
Q: What happens if a shareholder breaches the agreement?
A: You can pursue remedies through negotiation, mediation, arbitration, or court litigation. Arbitration is often preferred for confidentiality and speed. Ensure your agreement includes a clear dispute resolution mechanism.
Q: How often should I update my shareholder agreement?
A: Review every 2–3 years or after major events such as new investor entry, founder departures, business pivots, or regulatory changes affecting ownership or governance.
Conclusion
A shareholder agreement in Romania is not optional for companies with multiple shareholders, foreign investment, or high-value assets. It provides protection against disputes and deadlocks, clarification of governance and decision-making, IP protection and alignment of founders, and clear exit and valuation mechanisms.
Key legal caveats: Voting obligations cannot be enforced; external enforceability requires Articles coordination; vesting must use Romanian-compliant legal mechanisms; non-compete clauses must be reasonable; and tax planning should be integrated.
Next Steps
- Coordinate drafting with a Romanian corporate lawyer
- Ensure key clauses appear in both shareholder agreement and Articles of Association
- Include IP assignment, dispute resolution, and proper exit mechanisms
- Review tax implications for dividends, management fees, and exits
A shareholder agreement, when properly structured, is the foundation for sustainable, conflict-free business in Romania.
Disclaimer: This article is for general information only and does not constitute legal advice. Please consult with a qualified Romanian corporate lawyer to verify current laws and regulations before finalizing your shareholder agreement. Laws and procedures are subject to change, and individual circumstances may vary.