ELKB Romanian joint stock companies: board decisions on share capital increase can be challenged, August 2018

Law no. 31/1990 on companies (the “Companies Law”) provides three powers that the Extraordinary General Assembly of Shareholders of Romanian joint-stock companies can delegate to the company’s Board of Directors or Management Board (depending on whether the company’s management is organized as a single-tier management system or as a two-tier management system), as follows:

changing the company’s registered office;
changing the company’s business object;
increasing the company’s share capital.

Until recently, only the board decisions regarding the aspects mentioned at (i) and (ii) above could be challenged by any of the company’s shareholders by an action for annulment filed in court.

Pursuant to a decision of the Romanian Constitutional Court published on August 1, 2018, board decisions regarding share capital increases can now be subject to an action for annulment as well.