Law no. 163/2018 on amending and supplementing Accountancy Law no. 82/1991, Company Law no. 31/1990 and Law no. 1/2005 on organization and functioning of the cooperatives was published in the Official Gazette of Romania no. 595 on July 12, 2018 and it is applicable as of July 15, 2018.
NEW LEGAL PROVISIONS REGARDING DIVIDENDS’ DISTRIBUTION
This new enactment brings important changes to the previous legal provisions on dividends’ distribution that grants more flexibility to the shareholders to enjoy the benefit resulted from the companies they own.
- Thus, a company has the possibility to distribute dividends to its shareholders not only after the end of every financial year, as it was legally permitted so far, but also quarterly during the ongoing financial year.
The quarterly distribution of dividends to the shareholders may take place if decided so by the general meeting of shareholders on the basis of the quarterly interim financial statements.
In case the general meeting of shareholders decides the interim distribution of dividends, the payment thereof to the shareholders will be made within the deadline approved by the general meeting of shareholders or, as the case, within the deadline provided by law.
Any differences resulting from the interim distribution of dividends during the year are regularized at the end of the respective financial year, based on the annual financial statement approved by the general meeting of shareholders.
If differences arise from the annual financial statement as a result of the regularization, the respective amounts have to be paid either by the company to its shareholders or have to be reimbursed by the shareholders to the company, as the case. The payment/reimbursement is due within 60 days as of the date the annual financial statements are approved by the general meeting of shareholders.
In case of failure to pay/reimburse the amounts as resulting from the approved annual financial statements, the company or the shareholders, as the case, shall owe legal penalty interest or, penalty interest in the amount established by the general meeting of shareholders that has approved the annual financial statement, if higher than the penalty interest established by law.
- Similar provisions are also applicable to cooperatives of which members are entitled according to this new enactment to receive dividends from the quarterly and, respectively, yearly profit, as per their participation quota to the share capital.