Natural and legal persons may freely enter into partnerships and set up companies in order to develop business activities under the Romanian Law. According to the provisions of the Romanian Company Law 31/1990, as republished and subsequently amended, there may be incorporated five types of companies:

• General Partnership , in Romanian "societate in nume colectiv" (SNC), which obligations are guaranteed with the company's assets and by the unlimited and joint liability of the partners;
• Limited Partnership, "societate in comandita simpla" (SCS), which obligations are guaranteed with the company's assets and by the unlimited and joint liability of the general partners. The limited partners are liable only up to the value of their subscribed contribution to the share capital;
• Limited Partnership by Shares, "societate in comandita simpla pe actiuni" (SCA), which have a social capital divided into shares and of which obligations are guaranteed with the company's assets and by the unlimited and joint liability of the general partners. The limited partners are liable only up to the value of their subscribed contribution to the share capital;
• Joint Stock Company, "societate pe actiuni" (S.A.), which obligations are guaranteed with the company's assets. The shareholders are liable only up to the value of their subscribed contribution to the share capital;
• Limited Liability Company, "societate cu raspundere limitata" (S.R.L.) which obligations are guaranteed with the company's assets. The shareholders are liable only for the payment of their contributions to the share capital.

The By-laws should mention, among others: (i) the identification data of the shareholders, (ii) the type, name and registered office of the company, (iii) the scope/purpose of activity, (iv) the subscribed and the paid share capital, (v) the identification data of the directors, (vi) the participation quota of each shareholder to the company's profits etc. Notarization of the By-laws is compulsory only in the following situations: (i) upon incorporation of a company holding real estate (i.e. lands or buildings) as contribution in kind; (ii) when the legal form of the new company involves the unlimited and joint liability of all or some of the shareholders and (iii) when the company is set up by public subscription.The organization of general partnerships and limited partnerships is governed by contracts of association while the joint stock, the limited partnerships by shares and the limited liability companies are organized under a single document named "Constitutive Act" or “By-laws”).

All companies must be registered with the Romanian Trade Registry (organized under the authority of the Ministry of Justice) and they acquire a legal personality as of their registration date. The Trade Registry grants to the newly set up companies: the registration certificate, the fiscal code and if all conditions are met, the authorizations and permits necessary to start their business activities (e.g., fire protection, sanitary, environment, work protection etc., approvals and/or authorizations).

According to the Company Law, contributions to the share capital of a company may be in cash, in kind and in receivables. The cash contribution is compulsory upon the establishment of any type of company.

Companies, irrespective of the type, are managed by one or more directors (forming the Board of Directors in joint stock companies or if the By-laws provides so), who can be individuals or companies, appointed either under the Constitutive Act, or by the general meeting of shareholders. There are no special requirements with regard to the citizenship of a company' directors.

The shareholders of each type of company have at least one ordinary meeting per year.

All types of companies should annually register the financial statements with the competent Tax Administration. In cases of listed companies, the financial statements and the auditors' report must also be registered with the National Securities Commission.

Almost 90% of the companies incorporated in Romania are limited liability companies (SRL), another 8% are joint-stock companies (SA), while the remaining 3 types of companies encompass 2% only.

The joint stock companies (SA) are normally used for some big businesses, while the other big investors, as well as the medium and small investors rather prefer the form of limited liability company (SRL).

Comparing the joint-stock company (SA) with the limited liability company (SRL):

1. SA has a minimum social capital of EUR 25,000 (RON equivalent); SRL has a minimum social capital of RON 200 (approx. EUR 50).
2. 1 share of an SA must have a minimum face value of 0.1 RON, while the face value of 1 quota of an SRL may not be less than 10 RON.
3. SA must have at least 2 shareholders and there is no limit for the maximum number of shareholders; SRL must have at least 1 quotaholder and maximum 50 quotaholders.
4. SA has normally a Board of Administration of at least 3 members, while SRL may have even 1 Administrator.
5. SA may be a closed or an open company, while SRL is a closed company only (i.e. new quotaholders must be admitted/approved by all the existing quotaholders).
6. Incorporation procedure is similar for both SA and SRL.