V. Dissolution of the trading companies

The cases leading to dissolution are the following:

a) the term stipulated in the company contract has expired or another ceasing condition has been achieved. If the company was established for a definite period of time and that period came to an end, or another clearly stipulated condition has been accomplished or the objective for which the company was established has been accomplished, the company dissolute.

b) dissolution is decided in the absence of the lawful heir by:
- the bankruptcy procedure;
- the liquidation procedure;
- the lawful cancellation from the Trade Registry.

Bankruptcy is the procedure whose aim is to indemnify the creditors according to the legal provisions. In the process of bankruptcy procedures, the denomination of the company will be followed by "f. a." (felzamolos alatt - bankruptcy procedure in progress). The rules contained in Law I. L/1991 on the bankruptcy, liquidation procedure and the patrimony distribution.

Liquidation is the procedure during which the company that is not under payment incapacity decides the cease of activity without lawful heir and pays back the creditors. Under this procedure, after the denomination of the company it is compulsory to write "v. a." (The general rules are comprised in Law I. L/1991 on the bankruptcy, liquidation procedure and distribution of the patrimony).

The cancellation ex officio from the Trade Registry is made only when the company transposes one of the imperative legal regulations (cogent provisions).

c) dissolution with lawful heir (modification of the company)
By modification one may understand:
- merging
- division

The trading company may turn into a public utility company.
The decision with regard to the modification belongs to the general assembly.
Companies under dissolution or bankruptcy procedure may not be modified.
During the transformation process that form of company must be chosen for which the law does not state the quantum of the minimum subscribed capital or its lowest limit.

By transformation, the obligations towards the thirds are kept and they are the charge of the newly established company.
The trading company set up by modification is the lawful heir of the former trading company. The newly established company overtakes the rights but also the charges and duties the former company, the obligations from the labor contracts with the employees included.

d) The number of partners decreases to one except for the case the legal provisions do not prescribe the contrary. For setting up and operation of the trading company at least two partners are necessary, except for the sole partner limited liability company and the one-person joint stock company.

e) The Courthouse (the judge at the Trade Registry) declares the cease of company's activity:

a- The Courthouse decides ex officio the cancellation of the company;
b- The Courthouse decides the cease of the company's activity within the bankruptcy procedure;
c- Legal provisions with regard to the legal forms of trading companies prescribing the end of activity.

Once the cancellation from the Trade Registry performed the activity of the company ceases.

Liability for the obligations

In case of dissolution the claims towards the company in dissolution process are barred within 5 years from the set-up date, except for the cases in which, for some claims, the law does not prescribe shorter terms.

The terms run if the liability of the partners for the company's obligations have been unlimited during the operation of the company and the legal relationships between the partner and company ceased before the dissolution of the company.

Liability in case of succession

If the company is dissolute by succession, the lawful heir company of the former company is liable for the obligations of the company. The liability of the former company partners may be ascertained only when the lawful heir company may honor its obligations.

Liability for the obligations in case of dissolution without successor

The partner of the trading company dissolute without successor is liable for the obligations of the dissolute company.

In case of limited liability companies, partners are liable up to the limit of their share from the patrimony of the dissolute company. That partner who is guilty for trespassing the rules of limited liability can not claim limited liability. Consequently, those partners of the limited liability company who abused the creditors - having in view the type of company and the limited liability - will be jointly and unlimitedly liable for the obligations unpaid by the dissolute company.

This unlimited and joint obligation is in charge of the partners and when they enjoyed benefit of the company's patrimony as if it was their own property or diminished the patrimony in their own or somebody else's interest although they knew that by doing so the company would not be able to pay its obligations towards the thirds.