The branch is just an extension of the parent company and therefore has no legal personality and no independence. Law no. 105/1992 on the Regulation of the Private International Law Relationship adopts the accepted international practice by which a branch is governed by the national law of its parent company.
Legally, the branch has no separate status from the foreign company itself. It is merely carrying on business in Romania. The foreign company will be liable to the employees and creditors of the branch for the actions of, and debts contracted by, its managers and agents on behalf of the branch.
The formation of a branch follows the same steps as that of a subsidiary, but they do not need to establish incorporation statutes.
- a notarized copy of the articles of incorporation of the parent company;
- evidence of registration of the parent company in its country of origin;
- documentation indicating the company's solvency; and
Assuming the branch is accepted, it must then be registered with the local office of the National Trade Register Office.
The main differences between a subsidiary and a branch are:
- While a subsidiary has a legal personality and is considered a Romanian entity, the branch is just an extension of the parent company and therefore has no legal personality and no independence.
- The branch has no separate status from the foreign company itself and a Romanian subsidiary of a foreign company is a Romanian legal person and, consequently, it is subject to Romanian laws.
For any further details or information please do not hesitate to contact us.
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