The establishment of an LLC (Limited Liability Company) is a popular choice among entrepreneurs in Romania, offering multiple advantages, such as flexibility in business management and limiting the liability of shareholders. However, managing an LLC involves not only significant responsibilities but also clear rights that the administrator must be aware of.
The administrator of an LLC is the person who leads the company's activities and represents it in relations with authorities and business partners. Depending on the articles of association, the administrator can be chosen from among the shareholders or be an external person, with the responsibility of making decisions within the company and signing necessary official documents. Additionally, the administrator is responsible for managing the company's daily operations, including hiring and firing employees, as well as setting business strategies.
Who can be the administrator of an LLC?
In principle, any natural or legal person, whether Romanian or foreign, can be an administrator, and the administrator can also be an employee of the company, combining both roles.
However, there are certain legal conditions that must be met by the administrator. People who are incapacitated or who have been legally prohibited by a final court decision from exercising the role of administrator as a complementary penalty for a conviction in certain criminal matters, such as corruption crimes, embezzlement, document falsification, tax evasion, or offenses under Law no. 129/2019 for preventing and combating money laundering and terrorist financing, cannot be administrators.
Furthermore, the administrator of an LLC cannot simultaneously hold the position of administrator in a competing company or one with the same line of business, unless there is explicit authorization from the General Assembly of Shareholders (AGA).
What are the administrator's rights?
The administrator of an LLC has the following rights:
- Participation in all general meetings of the shareholders.
- Signing official documents in commercial relations, without needing prior approval from the shareholders or the sole shareholder.
- Making decisions regarding the company's development strategy and business goals.
What are the administrator's responsibilities?
As the administrator of an LLC, the individual has the following responsibilities:
- They are responsible for the smooth running of the company’s operations and its assets (fixed assets, inventory, receivables, debts).
- They are responsible for the legal representation of the company and signing official documents on behalf of the company.
- They have the duty to organize and ensure the accuracy of the company's accounting activities and to verify financial statements.
- They must call the general meetings of the shareholders and implement their decisions.
- Additionally, the administrator is liable for the company’s unpaid debts to the state, suppliers, or financial institutions.
- Furthermore, the administrator is responsible for ensuring compliance with all legal requirements regarding the company’s registration and the necessary documents for its operation.
How is the administrator of an LLC appointed and revoked?
Upon the establishment of an LLC, the administrator is appointed by the articles of association. The administrator can be a shareholder or another person, and the decision regarding the appointment is made by the General Assembly of Shareholders.
An administrator can be revoked in any of the following situations:
- If the AGA decides so.
- If the administrator resigns.
In either of the above cases, the change of administrator is made through a resolution of the AGA and is submitted to the Trade Registry, accompanied by the necessary documents: the updated articles of association, the declaration of the new administrator, and the specimen signature.
Conclusion
The administrator of an LLC plays a crucial role in managing the business, having both important rights and significant responsibilities. It is essential that the administrator is well-informed about the current legislation and understands all the obligations they have. In case of uncertainties or to ensure the legal compliance of the company’s activities, consulting a specialized lawyer can be of great help.
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