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Law No. 77 Of 1 August 1994 Concerning The Associations Of Employees And Members Of Management Companies That Are Privatising

Original Language Title:  LEGE nr. 77 din 1 august 1994 privind asociaţiile salariaţilor şi membrilor conducerii societăţilor comerciale care se privatizează

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LEGE No. 77 of 1 August 1994 on the associations of employees and members of the management of companies that are
ISSUER PARLIAMENT
Published in OFFICIAL MONITOR NO. 209 of 11 August 1994



The Romanian Parliament adopts this law + Chapter 1 General provisions + Article 1 For the acquisition of shares of companies that are privatized according to Law 58/1991, employees and members of the management of these companies can be constituted in associations, according to this law. + Article 2 The association is a legal person constituted by the persons referred to in art. 3, in order to dobindi and to use under the law, on behalf of and for these persons, shares of companies with majority state capital, in order to privatize them under the law. It is permissible to establish a single such association within the same company. + Article 3 Can be part of the association: a) employees of the commercial company with employment contract concluded for an indefinite period, with normal working hours or at least half a norm; b) members of the management company's management as defined in art. 74 74 of Law no. 58/1991 or manager of the company, defined in art. 3 lit. b) of Law no. 66/1993 on the management contract; c) former employees of the company; d) pensioners who had the last job at the company; e) agricultural producers, individuals, who are in contractual relations, suppliers or beneficiaries, with the agro-industrial company that is privatized. Persons referred to in par. 1 1 (a), b) c) and d) may be part of a single association. It does not benefit from the provisions of lit c) former employees who have not worked for a minimum of one year in that company and those who have been awarded the employment contract for reasons attributable to them. The list of persons who can be part of the association will be displayed at the headquarters of the company that is privatized, 15 days before the convocation of the general constituent assembly of the association. + Article 4 The Association may carry out only the activities provided by this Law + Chapter 2 Association of + Article 5 In order to establish the association, a number of at least 21 persons among those provided in art. 3 choose from them an initiative committee consisting of 3-7 members, which is registered, at the latest the next day, at the board of directors of the company. If several initiative committees are formed in a commercial company, they merge before the convening of the association's general assembly assembly. The merger will be carried out on the basis of the negotiations held between these committees, in the presence of representatives of the State Property Fund and the Private Property Fund to which the company is aronded. + Article 6 The initiative committee, elected according to art. 5, ensures the elaboration of the association's draft status and the fulfilment of the necessary formalities for the constitution + Article 7 The company is obliged to provide all the financial, commercial and technical information required by the initiative committee in order to draw up the feasibility study of privatisation. The expenses for the elaboration of the feasibility study shall be covered by the company art. 26 26 para. 2 lit. d) of Law no. 58/1991 . + Article 8 The procedure of establishing the association is: 1. the initiative committee shall request and receive applications for admission to the association from the persons referred to in art. 3 3; 2. if at least 30% of the total number of employees referred to in art. 3 3 para. 1 lit. a) have submitted applications for admission to the association, the initiative committee convenes the general constitutive assembly; 3. based on the feasibility study, the constitutive general assembly may decide to establish the association and, in this case, adopt the statute and elect the first board of directors of the association. On the date of election of the first board of directors, the initiative committee shall dissolve. + Article 9 The association's status must include: a) the name and headquarters of the association, as well as the name of the company whose shares are to be acquired by the association; b) the activity of the association; c) legal representatives of the association; d) the rules for the convocation of the general meeting, the validity of the deliberations, the adoption of its decisions and the e) the number of members of the board of directors, the manner of their choice, the duties and duration of their f) the criteria for determining the initial amount of the contribution of each member of the association, its maximum and minimum limits-which must be in accordance with the distribution criteria set out in art. 38-as well as the arrangements for payment of this contribution; g) conditions of admission to the association, subsequent accession, withdrawal and exclusion from the association; h) the criteria for distribution to the members of the association of shares bought by the association and the conditions for the transmission of shares between the persons provided 3 3; i) liability of the association and its members; j) dissolution and liquidation of the association; k) any other provisions related to the purpose of the association. + Article 10 The formation of the association is subject to authorization by the court in whose territorial area the commercial company that is privatized has its headquarters. The application must be accompanied by: a) the minutes of the constituent assembly; b) association status; c) the decision approving the formation of the association, adopted by the general meeting of the shareholders of the company, constituted according to art. 39 39 of Law no. 58/1991 ; d) proof of the existence of the original heritage of the association and its The original patrimony of the association is made up of amounts deposited by the members of the association, donations or other contributions from legal entities or individuals. The association will be based in a space provided by the commercial company that is privatized. + Article 11 The court verifies the fulfilment of the conditions provided by law and will approve the application, ordering the registration of the association in the register of legal entities. The legal personality of the association is acquired on the date of registration. + Article 12 Any amendment to the statute by the general assembly of the association must be communicated to the court within 15 days from the date of adoption; the judge orders the registration of the mentions of this change in the register of persons legal. + Chapter 3 Organizing association + Article 13 The governing bodies of the association are: a) general meeting; b) the board of directors. + Section I General Assembly + Article 14 The General Assembly is constituted by all members of the association and is its supreme governing body. + Article 15 The General Assembly shall: a) approval and modification of the association's b) the choice and revocation of the members of the board and of the association's censors committee; c) approval of the annual report of the board of directors of the association, balance sheet and revenue and expenditure budget of the association; d) establishing the criteria for distributing the shares bought by the association to the members of the association and approving the distribution program e) exclusion from the association; f) approval of the loan commitment; g) dissolution of the association; h) the adoption of any decisions which, according to the statute, are the exclusive competence of the general + Article 16 Each member of the association has one vote. + Article 17 The general meeting will be convened at least once a year. The extraordinary general meeting may be convened in the following situations: a) whenever necessary, on the initiative of the board of directors; b) at the written request of at least 25% of the total number of the association members. The general meeting is legally constituted when the majority of its members participate in the meeting and adopts valid decisions with the vote of the majority of The convocation for the general meeting, with the stipulation of the agenda, must be made at least 14 days before the date of its young people, by notifying, in writing, all the members of the association or by notices displayed at the workplaces of to them. + Article 18 Any of the members of the general assembly may appeal its decisions if the legal rights of the associate have been violated. The application shall be addressed to the competent court within 30 days of the date of adoption of the judgment which it shall appeal. + Section A II-A Board of Directors + Article 19 The Management Board is the executive management body of the association, consisting of 3-7 members, elected by the general assembly, by secret ballot, for a period of 2-4 years. Board members of the association are reeligible. + Article 20 The board of directors chooses among its members a president and a deputy. + Article 21 The association is represented before the public authorities, in the judiciary and in relations with third parties by the chairman of the board of directors or its deputy. + Article 22 There will be no members of the board of directors who, according to the law, have been declared incapacitated or have been convicted of fraudulent management, abuse of trust, forgery and use of forgery, deception, embezzlement, false testimony, taking or giving bribes, for crimes provided for in Law no. 31/1990 31/1990. + Article 23 Board members are liable for damages caused by their fault, both to third parties and to the association or associates. + Article 24 The Board of Directors shall meet at least once every 2 months, at the headquarters of the association, on the date set by the President. The summons will be made at least 5 days before the date of the meeting. The Management Board may meet whenever necessary, at the request of the President or at least two of its members. + Article 25 At the meetings of the board of directors, it is necessary to participate 2/3 of the number of its members, and the decisions shall be valid with the vote of + Article 26 The main tasks of the Management Board are as follows: a) ensure the operative management of the association's activity between the general meetings and carry out the administration documents regarding its activity; b) negotiates and gives its consent to the signing of the sale-purchase contract of the shares; c) organize and supervise the distribution of the shares to the members of the association and report d) organize and supervise the subsequent purchases of shares between the members of the association; e) approve the admission of new members, under the conditions laid down by the f) ensure the preparation of the balance sheet and the revenue and expenditure budget of the association, which they submit for approval to the general meeting; g) exercise any other duties and perform the tasks set out in the statute or by the general assembly. + Article 27 Control of the management of the association's patrimony can be ensured by a three-member censor commission The Audit Committee shall draw up reports to the Management Board. Members of the censor committee may be invited to board meetings. + Article 28 The association can pay allowances to the members of the board of directors, the censor committee and to bear other expenses occasioned by the exercise of this activity, according to the general meeting's decision. + Chapter 4 Acquisition, distribution and transmission of shares + Article 29 Under conditions art. 48 48 para. 2 2 of Law no. 58/1991 , the association brings down the shares of the company: 1. on behalf of those of its members who have subscribed shares and who pay them individually, using the following modalities: a) cash payment; b) exchange of property certificates; 2. on behalf of all its members, grouped in the association, acquiring shares that are initially not distributed individually, using for this purpose: a) installment payment, facilitated by the State Property Fund; b) loans contracted by the association. + Article 30 The shares subscribed and paid in full, in the manner described in art. 29 29 section 1, are transmitted on the basis of a subscription request completed and signed by each member of the association. The request for subscription of shares is set out in the Annex. + Article 31 The shares acquired in the manner described in art. 29 29 section 1 are transmitted to the members of the association immediately after payment, if the statute does not provide In this case, the members of the association have the right to vote in the general meeting of shareholders of the company, corresponding to the number of shares + Article 32 The shares acquired in the way shown in art. 29 29 section 2 can be used to guarantee loans taken from the State Property Fund, from banks or other financial institutions. + Article 33 The shares acquired by the association in the manner described in art. 29 29 section 2 shall be registered on its behalf and will be gradually distributed to the members of the association, corresponding to the amounts paid for the payment of instalments or The Association will exercise, in the general meeting of the shareholders of the company, the right to vote accordingly to these actions, in the manner provided by the state + Article 34 Dividends distributed by the company for the shares acquired under the terms of art. 29 29 section 2 and encumbered by credits or unpaid rates will necessarily serve to cover them. + Article 35 The shares are nominated and can be transmitted during the existence of the association, under the conditions established by the general meeting. The shares acquired according to art. 29 29 section 2 are transmitted with the right of pre-emption to the members of the association, under the conditions established by the + Article 36 If the members of the association do not exercise their pre-emptive right within 30 days from the date of the offer, the shares may be sold in the following order of preference: a) new employees who become members of the association under the conditions laid down in the statute b) other employees of the company who are not members of the association, with the approval of the general meeting + Article 37 Sales of shares acquired according to art. 29 29 section 2 are made in accordance with the provisions of the statute + Article 38 The general meeting approves, whenever necessary, the share distribution program, according to the criteria established by the statute and according to the options of each member of the association. The criteria shall be set against: a) seniority in the company; b) the position occupied in the company; c) salary; d) other objective conditions approved by the general meeting. + Chapter 5 Dissolution and liquidation of the association + Article 39 The association is dissolved in the following cases: a) when the purpose for which it was constituted was made by paying all debts and distributing all the shares to the members of the association. In this case, at the proposal of the board, the general meeting may decide to dissolve the association; b) where the number of its members becomes less than 1/4 of the members from the date of establishment. In this case, the general assembly could decide to dissolve the association only after it established, with the State Property Fund and with the other creditors, the ways to extinguish the debts to them. + Article 40 After the dissolution, the association goes into liquidation. The liquidation of the patrimony of the association is made by a liquidator outside the association, designated by the general assembly + Article 41 Liquidator has the following obligations: a) to carry out the inventory and to conclude a balance sheet to ascertain the situation of the asset and the liability of the association; b) carry out all the operations necessary for the liquidation and keep a register for all operations relating to the liquidation; c) to collect the receivables, to carry out the asset and to pay the creditors. + Article 42 Both to the association and to its members, the liquidator is subject to the rules of the mandate. + Article 43 At the end of the liquidation, the liquidator will draw up a liquidation balance; it, as well as the balance sheet drawn up at the entry into office of the liquidator will be submitted for approval to the + Article 44 The liquidation balance, signed by the liquidator and approved by the general meeting, will be deposited at the association's headquarters. For 30 days from the date of submission of the balance sheet any associate who wishes to challenge it may refer the matter to the competent court, quoting the liquidator. The court ruling is final. The distribution of the net product of liquidation between the members of the association can take place only after one month from the date of the dissolution decision of the association and only after the liquidation balance has been approved. + Article 45 Amounts due to associates who did not claim them within two months from the date of approval of the balance sheet, as well as amounts that have not been claimed or collected by creditors will be recorded at the C.E.C. or at a bank unit at the disposal of the Straightened. + Article 46 The liquidator will be discharged from its obligations after approval of the liquidation balance sheet. + Article 47 At the end of the liquidation of the patrimony, the liquidator will ask for the removal of the association from the register of legal entities, on the basis of the decision by which + Chapter 6 Negotiation procedure and facilities + Article 48 The Association will conduct negotiations with the State Property Fund and the Private Property Funds and will sign the sale-purchase contract, establishing by mutual agreement, based on the feasibility study: a) the purchase price; b) initial advance; c) staggering for the credit received. + Article 49 After the signing of the contract of sale-purchase of shares, the general meeting of shareholders will be convened, which will properly modify the status of the company and will designate the new administrators under Law no. 31/1990 31/1990. After registration in the Trade Register of mentions of the changes in participation in the share capital, the members of the association exercise their rights of shareholders in relation to the number of shares. + Article 50 The commercial company that is privatized by the transmission of shares to the association constituted under this law shall benefit, for the duration of the payment of the instalments or the repayment of credits, under the conditions provided for in the sale-purchase of shares, to reduce by 50% the corporate tax, related to the shares of interest. The dividends related to the shares held under the present law are non-taxable, for the duration shown in par. 1. + Article 51 The tax incentives provided in art. 50 50 applies to a single share purchase. The financial income realized through the mentioned tax incentives is transferred to the association and is used exclusively for the payment of rates, interest and payment of loans contracted by the association for the purchase of shares. + Article 52 The associations established under this law benefit from the following facilities: 1. The State Property Fund will grant these associations the facilitation of payment in installments, under the following conditions: a) the initial minimum advance of 20% of the negotiated price; b) the payment of the minimum payment of 5 years; c) negotiable annual interest of maximum 10%. 2. The Private Property Fund to which the commercial company in question is aronded is obliged to receive property certificates from the members of the association within the limit of at least 2/3 of its share of 30% of the total shares of the company, at the value negotiated with it. Private Property Funds can receive the entire license with property certificates offered by the association members, for their change in actions, following that, periodically, mutual settlements are made between funds, according to the arondation system. of companies. + Chapter 7 Transitional and final provisions + Article 53 The tax incentives provided in art. 50, as well as the interest provided in art. 52 52 section 1 lit. c) applies, for taxes due after the date of entry into force of this law, and to companies that have been privatized before the entry into force of this law by buying shares by employees ' associations and members of their management, constituted as legal persons. + Article 54 The balance sheet and the revenue and expenditure budget of the association shall be drawn up annually, according to the legal provisions. + Article 55 The association cannot perform other expenses outside those related to the achievement of the purposes provided in the statute. + Article 56 The State Property Fund, the Private Property Funds and the National Privatisation Agency will develop, within 30 days, methodological norms for the application of this law. + Article 57 The provisions of this law do not apply to banking and insurance companies. This law was adopted by the Chamber of Deputies at the meeting of June 30, 1994, in compliance with the provisions of 74 74 para. ((1) and of art. 75 of the Romanian Constitution. CHAMBER OF DEPUTIES PRESIDENT ADRIAN NASTASE This law was adopted by the Senate at the meeting of June 30, 1994, in compliance with the provisions of art 74 74 para. ((1) and of art. 75 of the Romanian Constitution. SENATE PRESIDENT prof. univ. dr. OLIVIU GHERMAN + Annex 1 APPLICATION FOR SUBSCRIPTION OF SHARES To *) ................................... .................................... Association .................................... Company ................................ The undersigned/a .............................., domiciled in ................. holder of the identity bulletin series ..... no. .......... I declare that: a) Meet the conditions provided by law for admission to the association, having the status of **) .................. in function ***) ...................... at the company. b) We have become aware and agree with the association's status and the share distribution program, approved by the association's general meeting. c) Request a number of ****) ....... actions with a nominal value of ....... ........ lei each, at the price of .............. lei each. Annexes ................. * ****) for .............. lei, representing ..... .........% of the share price subscribed. d) I undertake to perform the rest of the payments in the account of the subscribed shares, according to the staggered communicated by the association, under the terms of the sale-purchase contract of shares. Signature .................. Date ........................ -------------------- Note *) The application is addressed to the chairman of the board of directors Note **) Salariat, member of the management, pensioner, agricultural producer supplier or beneficiary of the company. Note ***) For pensioners will be completed with the last position held in society and with the year of retirement. Note **** ****) At most the number of shares distributed through the program. Note *****) Proving document of payment. ----------------------------