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Moldova - Corporate Amendments

Moldova - Corporate Amendments

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As of October 22, 2023, a number of significant legal amendments come into effect regarding the relationships between shareholders and founders of commercial companies in the Republic of Moldova. These amendments introduce essential reforms to the Limited Liability Company Law No. 135/2007 and aim to enhance the business environment, facilitate investments, and strengthen shareholder relationships.

These legislative amendments represent a significant step in the reform of the relationships between shareholders and founders of commercial companies in the Republic of Moldova, as well as alignment with international best practices in the regulation of commercial entities and the standards of the European Model Companies Act.

This information outlines the most significant legal changes:

Shareholders’ Agreement Conclusion 

One of the major changes involves the introduction of a new provision regarding the shareholders’ agreement. This provision allows shareholders to enter into agreements that regulate the exercise of rights within the company, including voting on company decisions and the transfer of ownership interests, the assumption of obligations such as voting in a specific manner, the coordinated management of the company's actions, or abstaining from certain actions. The content of the shareholder's agreement is typically confidential. The company will be informed about the existence of a shareholders’ agreement and its most relevant provisions. Interested parties may notify the state registration authority in order to enable  legal instruments such as buy-sell options, the drag-along and tag-along options, and the contractual pre-emption right.

Purpose of the Company Identification

According to the amendments, in addition to the goal of profit and increasing the company's value, companies can now declare non-lucrative purposes, such as those related to social entrepreneurship.

Squeeze Out Possibility

The law has been supplemented with Article 471, which allows minority shareholders to withdraw from the company without the consent of the majority, and without being obliged to sell their ownership interests.

Regulations on Abandoning the Proportionality Rule 

The amendments allow shareholders to set in the Articles of Association a different ratio between the value of the ownership interest (i.e. share) and the associated rights. This change allows for the diversification of contributions from each shareholder and encourages investors with limited financial resources to participate in commercial companies.

Incentive Capital

The concept of "incentive capital" for employees has been introduced, allowing them to participate in the financial benefits of the company or become fully-fledged shareholders. This measure aims to motivate employees with outstanding performance and increase productivity.

Simplification of Company Formation and Elimination of the Maximum Number of Shareholders

The incorporation procedure for companies has been simplified by establishing the Articles of Association as the sole founding document. Additionally, the maximum number of shareholders for limited liability companies has been eliminated, providing more flexibility in the ownership structure.

Right to Choose Statutory Changes

Shareholders now have the right to decide which changes to the company's data will be included in the Articles of Association and which will only become binding through a general meeting of shareholders registered in the State Register of Legal Entities.

Changes in Assets and Share Capital

The legal changes include acceptance of contribution to the share capital with intellectual property rights, the conversion of a pecuniary obligation into a contribution to the share capital, and clarification of the procedure for increasing the share capital through additional contributions.

Liberalization of Certain Rules 

Shareholders now have the option to choose alternative solutions regarding proportionality between the value of the ownership interest (i.e. share) and associated rights, distribution of net profit, intermediate payment of dividends, and other aspects.

Shareholder Rights and Good Faith Exercise of Rights

Shareholders' access to information and documentation has been expanded, and rules regarding expulsion from the company and shareholder liability have been adjusted to ensure fair treatment. Another significant change concerns Article 11 of Law No. 135/2007, which now includes a general provision regarding the exercise of rights in good faith and the assurance of equal treatment among shareholders.

The most important legal amendments will be addressed in separate articles by ACI Partners.

By Nicolina Turcan, Associate, ACI Partners

Moldovan Knowledge Partner

ACI Partners is a leading law firm in Moldova with an expanding network of partners throughout Europe. ACI Partners was established in 2006 and since then has managed to build a very strong and competitive legal practice. Our business strategy strives to deliver a solid and reliable service, going beyond merely grasping the law, which the clients may turn to whenever they need. In reaching this goal, ACI Partners employs a personalized approach to each client, showing a genuine respect for their values and unqualified commitment to their interests and needs, steadily investing in knowledge and data management and ensuring a working environment consistent with our clients’ quality demands and high expectations.

ACI Partners is a one-stop shop law firm proficient in all possible legal matters a business might come across in Moldova, starting with incorporation of a business, and obtaining of all the necessary regulatory permits, continuing with various daily matters, such as contracts, labor, and migration, and finishing with dispute settlement, insolvencies, and criminal investigations. But we pride ourselves especially for our unmatched expertise in most innovative and complex areas for Moldova, as Modern Financial Products, Data Protection, Renewable Energy, Competition, Clinical Studies, Public Procurement, and Regulatory. In our work, we always involve a team of professionals with the relevant skill-mix, which enables us to provide our clients with an integrated and comprehensive advice, superior to our competitors.

ACI Partners has advised the Government of the Republic of Moldova, businesses, international organizations, and other institutions on most challenging transactions, assignments and projects.

ACI Partners is not just another law firm. Over the course of our existence and working in Moldova, and on the international stage for our non-Moldovan clients, we have developed a strong set of core values which, we believe, guide us in everything that we do and, moreover, gives us a competitive advantage – differentiating us from other firms on the market.

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