Checking a company’s situation

Pre-screening of potential clients or business partners / Trustworthy company or not / Checking company assets / How we can help you

Many companies in Romania, before entering into contractual relations with future customers and/or business partners, check their legal situation to ensure that they will not encounter unpleasant situations during the course of business.

Thanks to the transparency system imposed by the Romanian authorities / public institutions, the verification of the legal situation of a company can be carried out with a minimum of effort, using online IT systems and can cover a number of important aspects concerning the company in question (e.g. date of establishment, number of shareholders, persons managing the company, whether or not the company has ever been in a state of insolvency, disputes in which the company is involved, whether the company has been or is in foreclosure proceedings, annual turnover, annual financial results of the company, number of employees, etc.).

Based on the information gathered, companies in Romania can make an informed decision on whether or not to enter into contractual relations.

Company that inspires confidence or not

One of the most common checks is to verify the legal situation of the company, which generally covers the following aspects:

• the date of establishment of the company;
• whether or not the company has relocated its activities over time;
• who are the partners/shareholders of the company;
• who are the directors of the company;
• whether or not the company is in insolvency proceedings;
• whether or not the company has been involved in lawsuits, and if so the type and nature of the lawsuits;
• which is the average number of employees in the company;
• what is the company’s turnover and its evolution over time;
• whether or not the company has made a profit and its development over time.

Verification of company assets

The verification of a company’s assets is relevant in many situations, but two situations stand out: (i) the situation in which the acquisition of assets is desired, (ii) the situation in which the company’s creditworthiness is being verified.

As regards the acquisition of assets, as a good practice in the field, irrespective of their type (acquisition of tangible assets or acquisition of shares/shares), they are checked before acquisition from three perspectives: (i) legal perspective, (ii) technical perspective, (iii) economic perspective.

As long as all prospects are checked and the results are positive, the chances of closing the deal increase considerably.

For more information on the legal status of an asset please go to the section Legal status of an asset.

For information on how to check a property you are planning to buy, please visit the Buying a property section.

In terms of the company’s creditworthiness, the existence of assets of considerable value in a company’s assets, possibly free of any encumbrances, considerably increases the confidence of business partners in the effective possibility of recovering debts.

How we can help you

Our lawyers together with various specialists in relevant fields (e.g. accountants, financial auditors, architects, construction engineers, etc.) can provide you with legal advice in order to verify the legal situation of a company with which you wish to enter into a contractual relationship, including from the point of view of verifying the situation of the assets you wish to acquire:

• verification of company documents;
• checking the disputes in which the company has been involved and their effects on the future transaction;
• identifying possible future litigation in which the company might be involved;
• checking and establishing the legal, technical and economic situation of the assets you wish to acquire;
• drafting and assisting in the negotiation of the contract you conclude.

Additional information on verifying the legal status of a company