During the past 10 years, practitioners have often criticized that share transfers to third parties (non-shareholders) within limited liability companies (SRL) were extremely lengthy compared to the ones among existing shareholders. The newly adopted changes to the Companies’ Law 31/1990 made the procedure shorter and more flexible.

Lengthy Old Procedure

The classic procedure took around 2 months and comprised 2 steps with an opposition period in-between. This brought a certain unpredictability in those cases where time was critical since the parties could not influence the publication date of the transfer documents within the Official Gazette.

(Contestable) alternatives were used in practice in order to shorten the procedure, i.e. entering within the target company by insignificantly increasing the share capital increase to obtain the position of a shareholder; transforming the target company into a stock company (S.A.) to apply a simple stock transfer procedure etc.

New Simplified Procedure

The new rules allow the shareholders to freely set up the transfer rules within the articles of incorporation. This gives them the possibility to establish a more flexible frame whenever investors are invited to participate by M&A.

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