11.

Legal entities
operating for profit
 1. The notion of a legal entities operating for profit
 2. Classification of legal entities operating for profit
 3. Elements of legal entities operating for profit
 4. The governing bodies legal entities operating for profit
 5. Establishment and operation of legal entities operating for profit
 6. Identity attributes of the legal entities operating for profit
1. The notion of a legal entities operating for profit

 In accordance with the provisions of the Civil Code, legal persons may be private
and legal in law which, in civilian relations, are based on equality principles.
 Private legal entities may have a lucrative or non-lucrative purpose.
 The following forms of business legal entities (for-profit) may currently be
incorporated in Moldova:
 Limited liability company (SRL / LLC);
 Joint-stock company (SA / JSC);
 General partnership;
 Limited partnership;
 Co-operatives.
1. The notion of a legal entities operating for profit

 In general, the form of business organisation does not

influence the type of activity to be carried out by a legal
entity.
 On the other hand, certain types of activity expressly
provided by the law may be carried out only based on a
license, issued by the public authorities.
 In some cases, the specific form of business organisation is
regarded as a special requirement for obtaining a licence
(e.g. only JSC may obtain licences for banking, insurance
activities, etc).
1. The notion of a legal entities operating for profit

 The most widespread forms are limited liability companies and joint stock
companies. From a foreign investor’s perspective, the choice usually tends to
be either an LLC or a JSC. In specific circumstances for non-commercial
activities a representative office may be considered.
2. Classification of legal entities operating for profit
 Classification
 The following criteria can be used to classify the legal entities operating for profit:
 By the nature of the entity (entities of people and of capital)
 By the stretching associates liability (Enterprises whose partners are responsible: unlimited -
the collective society, the limited partnership; subsidiary - production cooperative. Enterprises
whose business associates do not respond for obligations of it.
 By number of employees :
A)Micro-enterprises - have an average number annual employees of up to 19 people.
B)Small businesses - have an average number annual employees from 20 to 75 years people.
C)Large enterprises - have a number of more than 75 employees.
 After the structure social capital(Enterprises whose capital does not divide, Enterprises whose
capital divides into share odds. Companies whose share capital divide into shares)
 By the issuance of stock securities (Enterprise that emit securities and that can not issue them)
 By the business volume(Monopolistic enterprises, Enterprises holding a dominant position on
market, Other businesses)
 By the type of main activity
3. Elements of legal entities operating for profit

Elements are:
 1.Structure organizational
 2.Distinct patrimony
 3.Own patrimonial liability
 4.Own pourpose
 4. The governing bodies of legal entities operating for
profit
• Supreme Decision Making Body (General Meeting of Shareholders
or Sole Shareholder) forming the will of the legal entity. It decides
on the most important issues concerning the operation and even
the existence of the company.
• Executive Body (Administrator) executes the will of the General Meeting of Shareholders,
which is manifested in relation to third parties, without power of attorney. The Supervisory
Body is an optional body, but mandatory for Joint Stock Companies with more than 50
shareholders, which aims at supervising the operation and at adopting certain categories of
issues, during the period between meetings of the Supreme Decision Making Body.
• The Control Body (Auditor or Audit Commission) exerts control over the acts and operation of
the Executive Body. Board members, administrators and accountants of legal entities cannot
be members of the Control Body. The auditor’s powers can be transferred to an audit
company.
• The company can have one or more administrators that manage the company and represent
it without power of attorney. If the entity has more administrators, their duties shall be
regulated by the act of incorporation. Otherwise, they have equal powers for company
administration and representation.
 Governing bodies

 Any person from the Republic of Moldova or from abroad, with full legal
capacity, can be appointed as administrator, except for cases when:
• by law or court order they are prohibited from holding the administrator
function or other functions, which provides the right of transfer of tangible
assets;
• the person has outstanding criminal records for crimes against property,
economic crimes, crimes committed by officials or by people who manage
commercial organizations;
• the person is registered as administrator of another entity in the Republic of
Moldova and, at the same time, is not its associate.
 Governing bodies

 The administrator is subordinated to the Supreme Decision Making Body (if the act of
incorporation does not establish subordination to the Supervisory Body), which
appoints and dismisses the administrator, sets remuneration and approves its reports.
 The administrator’s name is registered in the State Register and any related changes
shall be duly registered.
 The administrator who is a foreign citizen has to obtain a residence permit with the
right to work in the Republic of Moldova, after the completion of company
registration.
 The administrator shall keep accounting. The entity’s chief accountant shall have
related higher education or specialized secondary education. The law allows
combining the function of administrator and accountant.
 The activity performed by the administrator and accountant can be carried out under
a services contract.
 5. Establishment and operation of legal entities
operating for profit

 The company is considered established from the moment of its state

registration with the registration body, in the territorial jurisdiction of which
its registered office is located.
 The state registration procedure lasts 24 hours. This term starts on the next
working day following the day when all documents necessary for registration
were submitted.
 The company can practice any type of activity that is not prohibited by law,
even if it is not provided in the act of incorporation. However, the act of
incorporation shall indicate the main types of activities, correlated with the
Classifier of Economic Activities. Usually, this is done by the representative of
the registration authority upon submission of the application for registration,
or by the notary, if the act of incorporation is authenticated by a notary.
 It is very important to determine the size of each shareholder’s contribution,
the manner and timeframe for its submission (LLCs have a timeframe of
maximum 6 months from company registration). For certain types of activities
(e.g. auditing) presence of local capital is mandatory. Money and goods in
civil circuit can serve as contributions to the share capital. Goods may be
transferred with the right of ownership or use. If the contribution is not paid
within the established timeframe, the shareholder may be excluded from the
company.
 The financial foundation of a company’s activity is represented by the goods
with which the founders endow the company upon its establishment. The
monetary expression of these goods (contributions) represents its share
capital, which may be increased or decreased during operation. The size of
the share capital shall be fixed in the act of incorporation.
 SUBMISSION OF DOCUMENTS TO THE
REGISTRATION BODY
(1) Submission of the
application for
(2) Registration body
registration with the
specialists verify the
Public Service Agency and
capacity of founders and
annexation of registration
the documents submitted
documents to the
application

(4) The registration

body specialist will set
the day and time when (3) Payment of
founders must appear registration fee
before the Registrar for
the actual registration
 Documents for Registration

 For the state registration of legal entities, the following are presented:
 the identity papers of the founders or their representatives empowered by
proxy authenticated in the manner prescribed by law, as well as by the
administrator of the legal entity;
 the application for registration according to the model approved by the state
registration body;
 the constituent decision and the constitutive acts of the legal person,
according to the legal form of organization, in two copies;
 the opinion of the National Commission of the Financial Market - for insurance
companies, non-state pension funds and savings and loan associations; the
document confirming payment of the registration fee.
 For the state registration of legal entities with foreign
investments, additional registration shall be attached to
the application for registration:
 the extract from the register in which the legal person is
registered with foreign investments, translated and
legalized notarial;
 the instruments of incorporation of the foreign legal
person.
 The documents listed in item 1-2 are presented in original
or in authenticated copies and authenticated by the
consular offices of the Republic of Moldova abroad, being
translated into the state language.
 Foreign official documents drawn up in the territory of States Parties to the
Convention on the Suppression of the Requirement of Legalization of Foreign
Official Documents, concluded at The Hague on October 5, 1961 and to which
the Republic of Moldova is a Party to which the apostille is applied under the
conditions established by this Convention, accepts registration without
additional over legalization. This provision shall also apply to extracts and
copies of such documents.
 Exceptions are made only to the documents issued by the authorities of the
CIS countries, Romania, Lithuania, Latvia, Czech Republic, Slovakia,
Azerbaijan, Turkey, Hungary with which the Republic of Moldova has
concluded treaties in this field, according to which the respective official
documents are recognized in the territory of the Republic of Moldova without
apostille and supralegalization.
 Documents for state registration shall be made in the state language and
submitted to the state registration body by the founder or by his
representative, authorized by proxy authenticated in the manner established
by law.
The registration of the legal entity data in the state
register of legal persons will verify:
 1. the name of the legal person;
 2. founders, natural persons:
 identity bulletins;
 if its name has previously been registered with enterprises that have liabilities to
the national public budget or which do not work and have not been liquidated in
the manner established by law;
 foreign citizens and stateless persons who have entered the Republic of Moldova
for up to 90 days present the copies of their national identity documents, which
will contain the mention of the Border Police on the crossing of the state border;
 foreign citizens and stateless persons who have entered the Republic of Moldova
for more than 90 days are to submit residence permits or identity papers for
stateless persons;
 3. administrators, individuals:
 identity bulletins;
 the administrator with foreign citizenship shall present a
copy of the passport, which shall contain the mention of
the Border Police on the crossing of the state border;
 foreign citizens and stateless persons who have entered
the Republic of Moldova for more than 90 days are to
submit residence permits or identity papers for stateless
persons;
 4. Founders of legal entities:
 to the establishment of a new legal person - the founders'
decision, if its name has previously been registered with
enterprises that have liabilities to the national public
budget or which do not work and have not been liquidated
in the manner established by law;
 5. empowered - special and authentic power of attorney;
 6. for the object of activity - it will be used "Classification of
Activities in the Economy of Moldova" (CAEM) and Law no.160 of
22.07.2011 regarding the regulation by authorizing the
entrepreneurial activity. The types of activity provided for in
Article 10 paragraph 3 of Law 845/1992 are exercised exclusively by
state-owned enterprises.
 7. the legal person's place of business - to be real, which requires
the existence of a clearly defined immovable property or space that
the legal person legally owns in the use or property; the owner of
the building is known and accepts that the legal entity uses its
address as the registered office; data regarding the address of the
headquarters are not indefinite and nonexistent;
 8. the document confirming payment of the registration fee.
 Issued documents

 After the entries in the State Register, the administrator or his / her
empowered person shall be issued, as the case may be, the following
documents:
 decision of the state registration body;
 constitutive acts;
 the extract from the State Register;
 Stamp.
 THE FUNCTIONING OF LEGAL PERSONS OPERATING
FOR PROFIT

1. Obligations of associates (founders, members) towards the legal person.
 2. The rights of associates (founders, members) to the legal person
 3. Structure of the organization of the legal person:
 a) Assembly of Associates - Supreme Body of the Legal Entity. Tasks and
actions.
 b) The administrator (executive body). Administrator's responsibility.
 c) Optional bodies - the representative body and the control body.
 4. Subsidiaries and representations of the legal person
6. Identity attributes of the legal entities operating for
profit

Main
Optional

Number of
Name (Article 26 Civil Code, Share capital
registration
art.24-26 Law no.845 /
1992) Emblem,
The bank account
symbols
Headquarters (Article 27
Civil Code, Art.27 tax code commercial
paragraph 2 of Law
mark(of
no.845 / 1992)
production,
trade,
Phone Fax services)
Electronic mail
 Individual WORK

 Compare the notion of legal person operating for profit with: a)commercial
society ; b) individual enterprise; c) entrepreneur; e) noncommercial
organization
 To classify a legal person for profit according to known criteria;
 To determine the necessary documents for registration of every form of
profit-making legal entities