You must act within the powers imposed by legislation, the company’s Articles (“articles”) and by-laws and, if applicable, the agreement concluded between you and the company. The articles govern how the company is to be run, including the powers and responsibilities of directors.
Duties – skill and care
When exercising directors’ powers, you are required to exhibit such a degree of skill as may reasonably be expected from a person with your knowledge and experience, as well as exercise independent judgment.
You must also exercise a degree of diligence and care in your actions as a company director. The test applied to determine ‘an acceptable level of care’ is what a reasonable person would do in looking after their own affairs (in case of a non-remunerated mandate) or what a reasonable person would do as a good owner (in case of a remunerated mandate).
Duties – general
In general, the responsibility for the company lies with the directors. When carrying-out the administration of the business, they have to apply the diligence of a prudent businessman, ie they have to supervise all actions of all employees and the other directors (cross-control).
The director also has a general duty of diligent management which includes, in particular, the following duties:
- to comply with and ensure the company’s compliance with all applicable statutory and legal obligations
- to use his best efforts to promote the purpose of the company
- to comply with his obligation of fidelity towards the company and to undertake his
responsibilities in the exclusive interest of the company
- to not delegate its powers of representation, unless specifically allowed by the company’s bylaws
- to no accept, during the term of his/her appointment, a director mandate for a competitor or an entity carrying out the same activity, or to carry out the same type of business or a competing business on his/her own account or in the name of another person
(legal or natural)
- to comply with and ensure the company’s compliance with all applicable statutory and other legal obligations and requirements
- to maintain the share capital and assets of the company
- to pay all taxes and contributions in due course and in accordance with legal requirements
- to call meetings of the board of directors or the shareholders as required by law or the Articles
- to ensure that the company keeps proper books of accounts and records, including the shareholders’ registry
- not to make or accept improper payments
- not to compete with the business opportunities or activities of the company
- not to disclose trade or business secrets or any other confidential information belonging to the company
The directors also have to observe the instructions given by the shareholders via shareholders’ resolutions.
Duties – other
There are many specific duties for a director. Some of the more onerous have been set out below:
- The director has to ensure that the company does not acquire shares which are not fully paid up, with funds that are required for the maintenance of the capital.
- The directors are liable for the preparation of the annual financial statements and the directors’ report of the company.
- The obligation to file for insolvency within
30 days from the occurrence of the insolvency
- (when the company is over-indebted or unable to pay its creditors for a certain amount of time).
- The directors must ensure the timely preparation of the tax return.
- The directors have obligations with respect to fiduciary duties. They must preserve the economic interest of the company. Hence, the directors are not allowed to undertake any actions which compete with the activity of the company. In case a conflict of interest arises, the director has to inform the company and refrain from voting. Furthermore, omission of business, poor performance as well as the assumption of too higher risks can constitute a violation of this obligation.
Safeguarding a number of legal provisions in relation to health and safety of workers, examples of which include the following:
- complying with environmental regulations for the produced or marketed products, the production process, the organisation of the work place and work facilities and compliance with pollution limits and general reporting duties
- ensuring statutory accident insurance remains in place, and that there is compliance with provisions for prevention of work place accidents
Please also note anti-bribery rules, as set out in the Law no. 78/2000 on the prevention, discovery and sanctioning of bribery and Law no. 286/2009 the Romanian Criminal Code. “Anti-bribery” legislation means that it is prohibited to bribe:
- any governmental official
- any person representing another party with whom the company is doing business with
in order to coerce the individual to act in a certain manner
Latest version updated
9th April 2018