What rights do minority shareholders have under Romanian corporate governance rules when the board approves a related-party transaction?

In Romania, related-party transactions are subject to both disclosure and approval requirements, especially if they could affect minority shareholders. If a board approved such a transaction without proper transparency or an arm’s-length process, there are a few possible remedies for example, challenging the decision in court, requesting the annulment of the transaction, or seeking damages if shareholder rights were harmed. There are also reporting duties toward shareholders and, in some cases, to the Trade Registry or auditors. The exact steps depend on the company’s form (SA or SRL), the articles of association or the value or nature of the transaction.

In Romania, related-party transactions are subject to both disclosure and approval requirements, especially if they could affect minority shareholders. If a board approved such a transaction without proper transparency or an arm’s-length process, there are a few possible remedies for example, challenging the decision in court, requesting the annulment of the transaction, or seeking damages if shareholder rights were harmed.

There are also reporting duties toward shareholders and, in some cases, to the Trade Registry or auditors. The exact steps depend on the company’s form (SA or SRL), the articles of association or the value or nature of the transaction.

In Romania, related-party transactions are subject to both disclosure and approval requirements, especially if they could affect minority shareholders. If a board approved such a transaction without proper transparency or an arm’s-length process, there are a few possible remedies for example, challenging the decision in court, requesting the annulment of the transaction, or seeking damages if shareholder rights were harmed.

There are also reporting duties toward shareholders and, in some cases, to the Trade Registry or auditors. The exact steps depend on the company’s form (SA or SRL), the articles of association or the value or nature of the transaction.

Hello,

I understand you have concerns about a related-party transaction approved by the board of a Romanian company in which you are a minority shareholder. It is wise to be vigilant in such situations, and Romanian corporate law provides several protections and remedies for minority shareholders.

Under Romanian law, specifically Law No. 31/1990 on Commercial Companies, there are provisions to protect minority shareholders from abusive or unfair practices, including those related to related-party transactions.​

Disclosure and Approval of Related-Party Transactions
Related-party transactions are not prohibited in Romania, but they are subject to specific disclosure and approval requirements to ensure fairness. These transactions must be conducted at arm's length, meaning the terms should be comparable to those of a similar transaction between unrelated parties.​

The board has a duty to ensure that any such transaction is in the best interest of the company and all its shareholders, not just the majority or a related party. Failure to do so can be a breach of their fiduciary duties.​

Your Rights as a Minority Shareholder
As a minority shareholder, you have several rights that can be exercised in this situation:

Right to Information: You have the right to be informed about the company's activities, including details of any related-party transactions. This information should be provided in a transparent manner.​

Right to Challenge Decisions: You have the right to challenge a board's decision in court if you believe it is unlawful, against the company's articles of association, or unfairly prejudicial to your interests as a minority shareholder. According to Article 132 of Law No. 31/1990, shareholders can file a claim to annul a resolution within 15 days of its publication.​

Right to Vote: While your voting power may be limited, you have the right to vote in shareholder meetings on matters that require shareholder approval.

Remedies Available to You
If you believe a related-party transaction has been approved without proper disclosure or a fair process, you can seek several remedies:

Annulment of the Transaction: You can file a court action to have the transaction annulled.​

Damages: You can seek financial compensation for any harm caused to you or the company as a result of the unfair transaction.​

Company Dissolution: In extreme cases of shareholder oppression or deadlock, a court may even order the dissolution of the company.​

Appointment of a Judicial Administrator: In cases of governance deadlocks, a court may appoint a judicial administrator to resolve the issues.​

The specific rights and remedies available to you may also depend on the company's legal form (SA - joint-stock company or SRL - limited liability company) and the provisions of its articles of association.​

I would be happy to provide you with a more detailed and personalized consultation on this matter via WhatsApp for a low fee. Please feel free to reach out to discuss your specific situation further.

In Romania, company law (Law no. 31/1990) does not contain a detailed, specific regime governing related-party transactions, but there are still meaningful protections available to minority shareholders. If the board approved a transaction without proper disclosure and without safeguarding the company’s interests, several remedies may be available. Where a shareholders’ resolution was involved or used to validate the transaction, that resolution can be challenged in court if it breaches the law, the articles of association, or your legitimate rights as a shareholder (under Article 132 of Law 31/1990). Directors and board members may also be held personally liable for any damage caused to the company as a result of breaching their duties of loyalty and diligence (Articles 144¹ and 72). From a transparency perspective, Romanian accounting regulations require that related-party transactions be disclosed in the notes to the annual financial statements. Shareholders have the right to access these documents and request information (Article 179). Since there is no mandatory approval procedure for related-party transactions under the law, it’s important to review the company’s articles of association or any shareholders’ agreement to see whether they impose additional safeguards or approval requirements. If you have grounds to believe the transaction was irregular or detrimental to the company, we can explore potential legal actions, whether to seek annulment or to hold directors accountable.