Issue 47

Financial Obligations for Companies

Delia Mircea


Companies bring about benefits as well as responsibilities and obligations which deal with the finance and accounting sectors.

Here are some of the obligations any entrepreneur must know:

The Unique Control Register (Registrul Unic de Control)

Days after being registered, a company must acquire, from the regional office of the Public Finances Body they belong to, the Unique Control Register. This register includes all the checks done by specialised control bodies in matters of : finances, sanitation, urbanism, quality of construction, consumer protection, work protection, work inspection, fire protection and others.

The document is kept at the company's social address and at every secondary address for which authorisations and work contracts have been issued. This register must be submitted to control bodies. Control bodies have the obligation of writing the following elements, in the register, before the inspection begins: the name and surname of the people who are entitled to perform the inspection, the body the inspectors belong to, the inspectors' ID number, the delegation number and date, the purpose of the inspection, the duration of the inspection, the period under control, and the legal grounds on which the inspection is performed. After the inspection is finalised, the number and date of the inspection results are written down in the Unique Control Register.

The Unique Control Register is kept by the legal representative of the inspected unit.

The newly registered companies must acquire the register up to 30 days after the registration date.

Legal basis: Law no. 252/2003 regarding the Unique Control Register

Thresholds for cash transactions

In the first half of 2015, certain limitations regarding the cash transactions companies can operate with were introduced. The law states that the payments performed among juridical bodies will be done in a non-cash format with a few exceptions, as mentioned below. Therefore, cash-based payments can still be performed, if they observe the following conditions:

a) inbound payments up to a threshold of 5.000 lei from one person;

b) inbound payments performed by cash and carry shops up to a threshold of 10.000 lei from one person;

c) outbound payments up to a daily threshold of 5.000 lei/person, but no more than a total threshold of 10.000 lei/day;

d) outbound payments to cash and carry shops up to a threshold of 10.000 lei;

e) outbound payments, which represent advance payment which needs to be refunded, up to a daily threshold of 5.000 lei, established for each person who received advance payments for refund purposes.

Moreover, it is forbidden to receive cash payments in batches from beneficiaries, for invoices with a value greater than 5.000 lei, and 10.000 lei, for cash and carry shops. It is also forbidden to pay, in batches, the delivery of goods and services whose value is greater than 5.000 lei, and 10.000 lei. It is forbidden to make batch payments towards goods and service suppliers whose invoices have a value greater than 5.000 lei, and 10.000 lei, towards cash and carry shops.

How do we refund the invoices whose value is greater than 5.000 lei and 10.000 lei ?

The invoices with values greater than 5.000 lei can be paid towards goods and service suppliers, and the invoices with values greater than 10.000 lei can be paid towards cash and carry shops, in the following manner: 5.000 lei/10.000 lei cash and, the sum which exceeds this threshold can be paid only through non-cash-based financial means.

Other limitations

The cash inbound payments from individuals, which represent debt transfer, receipt of loans or other sponsorship, as well as the equivalent value of delivering goods and services is done up to a daily threshold of 10.000 lei from one person/individual.

The cash outbound payments done by individuals, which represent the purchase value of goods and services, dividends, debt transfer or other rights, or return of loans or other type of sponsorship are performed up to a daily threshold of 10.000 lei towards one individual. It is forbidden to make batch outbound payments in cash towards one individual in those cases where the transactions are higher than 10.000 lei.

Legal basis: Law no. 70/2015 for the reinforcement of financial discipline regarding inbound and outbound cash payments, and for the purpose of modifying and completing Government Emergency Order no. 193/2002 regarding modern means of payment.

Registering work contracts with REVISAL

This falls under the responsibility of the finance and HR departments, but it is good for any entrepreneur to understand the purpose of this register.

According to Decision no. 500 as of 18th May 2011, regarding the general register for employee management, each employer must set and send forward to the Regional Workforce Inspectorate, a general register with the employees and must submit it for inspection to work inspectors, when requested to do so.

The filling in, as well as the written record of each employee and of their work contract details, upon employment, is done on the day previous to the commencement of their employment activity proper.

The following modifications must be recorded in REVISAL:

Legal basis: Decision no. 500 of 18th May 2011 regarding the general employee register.

Updating the data regarding the social headquarters or the secondary headquarters at ONRC

If the social headquarters or the secondary headquarters of the company have become available via rental or "comodat" contracts that have an expiration date, at the end of this period, the social headquarters to secondary headquarters will be declared expired. ONRC periodically sends ANAF the situation of expired headquarters.

Expired social headquarters represent a problem, because of the modifications brought to the Fiscal Code in 2016, which states that a tax-payer may become inactive if their social headquarters has expired.

As such, the Fiscal Code, art. 92, states the following:

The tax-payer is declared inactive if they find themselves in one of the situations below:

a) they do not fulfil, over the course of one fiscal semester, any obligation in terms of the financial reports they must submit, according to the law;

b) they refuse to be inspected by the fiscal body representatives, by declaring an address which does not allow the fiscal body to identify them;

c) the central fiscal body concludes that they do not function at the declared fiscal address;

d) temporary inactivity recorded an ONRC;

e) the functioning period of the society is expired;

f) the society no longer has governing bodies;

g) the duration for holding the social headquarters is expired.

The company will be declared inactive in the 30 days, which follow the inactivity notification submitted by the taxpayer.

The direct consequence of an inactivity status is the fact that these companies automatically no longer have to pay VAT, starting with the date of the inactivity decision.

The persons that had the VAT requirement nullified will have to register for VAT purposes when resuming their activity. The registration for VAT purposes is considered valid starting with the day when the body registers for VAT purposes.

Inactivity is checked monthly and the situation is monthly transmitted by ONRC.

Those bodies, who, before the expiration of the 30 days from the inactivity notification receipt, declare that they are not inactive and bring proof of this fact, are taken off the inactive body list.

The secondary headquarters of inactive bodies remain inactive during the bodies' inactivity period.

Documents required for prolonging the validity of the social headquarters at ONRC:

Legal basis: Order no. 3846/2015 for the approval of the implementation procedures of art. 92 of the Fiscal Code, and for the approval of the model and content of legal forms.

Obligations regarding book keeping

Who is responsible for SRL book keeping in 2016?

There are 2 possibilities.

First, book keeping can be run and managed in distinct departments, run by the finance manager, the chief-accountant or another person entitled to hold a similar position. These persons must have higher studies in the field of Economy. The person who is registered as finance manager or chief-accountant is the person employed according to legal standards and who has responsibilities in running the accountancy of the body (OUG 79/2014).

Second, book keeping can be run and managed by an accountancy company run by physical or juridical bodies who are authorised according to the law and who are members of The Accountant Experts and the Authorised Accountant Council of Romania (Corpului Experţilor Contabili şi Contabililor Autorizaţi din România).

Legal basis: The accountancy law with follow-up modifications (OUG 79/2014 and law 121/2015).

Checking business turnover for adherence to the proper fiscal category

A company which does not pay VAT will need to monitor their turnover to make sure they do not exceed the non-VAT payment threshold (220.000 lei/year). If the company does not want to become a VAT payer, they will have to make sure they do not exceed the yearly threshold.

The threshold must also be observed by micro-companies. Starting with 2016, the annual threshold is 100.000 euro. Being registered as a micro-company is not optional, if the company obeys all the requirements for it.

If, during a fiscal year, a micro-company has an income which exceeds 100.000 euro or if the proportion between the income resulting from consultancy and management exceeds 20%, the micro-company must pay income tax, starting with the trimester when any of these thresholds was exceeded.

Important! Micro-companies calculate and pay income tax (impozit pe profit) by taking into account the income and the deductions made starting with the trimester under consideration, and not with the beginning of the year, as the law required for 2015.

For 2016, if there is a change from micro to profit, this must be declared within the 15 days following the registration of profit.

Also, starting with 2016, if there is change from profit to micro, this must be reported by the 31st of March of the year for which the tax for micro-companies' income is paid.

The annual inventory of the patrimony

The end of the year marks the moment when the patrimony is registered in written form, a less joyful activity, but a necessary one, since the active and passive goods must be reflected in the yearly balance.

The accountancy law states that the administrator, the credit officer or any other designated manager must perform the inventory of goods.

To perform the inventory, these people must approve written procedures, adapted to the specific activity performed, which they must later send to the commissions, which are in charge of the inventory.

What happens in the case of small companies, which do not have enough staff to set up inventory commissions?

For those companies which have a small number of employees, the inventory can be performed by one person only. In this situation, the person responsible for the correct nature of the inventory can be the administrator, the credit officer or any other person who is responsible for managing the company.

The inventory and the evaluation of elements such as active goods, debts and self-owned capital can be performed with one's own employees or on the basis of contracts with third-party physical or juridical entities.

Important! The inventory commission must not include depo managers, accountants and internal or statutory auditors.

Companies must perform the inventory of their patrimony :

• at the beginning of their activity;
• at least once during the functioning period per se;
• in case of fusion or cease of activity;
• in one of the situations below:

a) upon request from control bodies, when the inspection is performed, or upon request from other legal bodies;
b) whenever there are clues that the financial activity is performed inaccurately, activity which can be accurately determined only via inventory activities;
c) whenever the financial activity is handed over to another person or body;
d) when the financial activity is reorganised;
e) as a result of natural calamity or force major;
f) in all other situations as stipulated by the law.

The annual inventory is performed at the end of the financial year. Throughout the inventory-related period, the schedule for and the period covered by the inventory must be posted in a visible spot.

Legal basis: Order no. 2.861 of 9th October 2009 related to the approval of the Norms regarding the organisation of and the inventory of elements such as active goods, debts and capital funds.

Drafting and submitting the annual financial situations

Companies must submit their annual financial documentation at ANAF. The financial documentation must be submitted 150 days after the end of the financial activity. For 2015, the documents must be submitted by 30th May 2016.

If these requirements, regarding the submission of annual financial documentation, within the legal timeframe, as set up by The Ministry of Public Finances (Ministerul Finanţelor Publice), are broken, the situation results in a contravention, and it is fined according to Law no.82/1991 in the field of accountancy, as follows:

Managing the documents issued by the company

Starting with the 1st of January 2016 there is a new requirement in force, for the financial documents a company uses. There are templates for these documents, but companies can adapt these documents to suit specific purposes. Also, the companies will establish, through their own internal procedures the number of needed copies and their flow within the company.

The law states that the documents can have a hard-copy or an electronic-copy format.

As a rule, the documents are kept in an archive for 10 years, except for salary-related documentation which is archived for 50 years, and a general list of documents which is archived for 5 years.

Legal basis: O 2634/2015 regarding financial documentation

Hiring disable people

According to the requirements of Art.78 par.(2) of Law 448/2006, public authorities and public institutions, juridical persons, public or private, which have at least 50 employees, must hire disabled people, which must represent at least 4% of the total number of employees.

The options employers have, if they do not respect this obligation, are:

a) to make a monthly payment of 50% of the minimum gross salary multiplied by the number of work positions which are not filled by disabled peopled;

b) to purchase products or services which result from the activity of disabled people who are hired in authorised units, on a partnership basis, which must hold the equivalent value of the sum owed to the state budget, and meeting the requirements under point a).

Legal basis: Law 448/2006 republished and updated with further notes and modifications.

These are only some of the responsibilities that result from owning a commercial entity/society. Failure to comply with these obligations results in fines, for the majority of them. This is why these obligations need to be known and respected.




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