Although much less regulated than the right to information of shareholders in joint-stock companies, the right to information of shareholders in a limited liability company (LLC) is equally important.
The difference in regulation likely stems from the distinction between the two types of companies: those based on capital (as in joint-stock companies – S.A.) and those based on persons and capital (as in limited liability companies – S.R.L.).

According to the classical definition by Prof. St. D. Carpenaru, a limited liability company “is a company established on the basis of full trust, by two or more individuals, who contribute certain assets to jointly carry out a commercial activity (production, trade, or services) for the purpose of sharing the profit and who are liable for the company’s obligations only up to the amount of their contributions.”

Thus, it is considered that when establishing an LLC, the persons or personal qualities of the shareholders are essential, and therefore, communication between them should, in theory, be easy and consensual. Both in theory and in practice, setting up an LLC is based on the trust and qualities of its shareholders—hence the intuitu personae nature of such a company.

On the opposite end, the joint-stock company was previously referred to in Romanian legislation as an anonymous company (societate anonimă), a term borrowed from more developed Western legal systems.
The first provisions regarding joint-stock companies were included in the French Commercial Code, which also used the term société anonyme. The attribute “anonymous” was attached to these companies because, in such cases, the shareholders’ contributions are more important than their personal qualities. Consequently, due to the emphasis on capital contributions over personal characteristics, the joint-stock company became known (and in some countries continues to be known) as an anonymous company.

Therefore, a joint-stock company is a capital-based company, where the essential element is the shareholder’s capital contribution—hence its intuitu pecuniae nature.

Back to the Right to Information:

The scope (legal regime) of the control right of non-managing shareholders in an LLC without auditors is governed by Article 199, paragraph 5, final sentence of Law no. 31/1990 (special law), and by Article 1918, paragraph 2 of the Civil Code (general law, which begins with “unless the law provides otherwise”).

Article 199, paragraph 5, final sentence of Law no. 31/1990 grants the same legal regime for control rights to LLC shareholders as it does to shareholders in general partnerships—this was also confirmed by the Bucharest Court of Appeal in Decision no. 2624 dated December 14, 2018.

Here is the content of Article 199, paragraph (5) of Law no. 31/1990:

“In the absence of auditors or, as applicable, a financial auditor, each shareholder who is not an administrator of the company shall exercise the right of control held by shareholders in general partnerships.”

Article 1918 of the Civil Code explicitly sets out the control rights of non-managing shareholders, granting them the right to be informed of the company’s operations and to consult any company document. The only limits imposed are that the exercise of these rights must not hinder the company’s operations or affect the rights of other shareholders.

Here is the content of this article:

“Unless the law provides otherwise, any shareholder has the right to consult the company’s registers and financial statements, to be informed of its operations, and to consult any company document, without hindering the company’s operations or affecting the rights of other shareholders.”

Therefore, in the absence of auditors, shareholders of a limited liability company, who risk the contributions they make in pursuit of profit, are entitled to consult the company’s registers and financial statements, as well as any company document, provided they do not infringe upon the rights of other shareholders. However, a clearer regulation of this right in Law no. 31/1990 would eliminate any uncertainty regarding its existence, scope, and content.

Currently, the Companies Law merely acknowledges the existence of this right, without clearly defining its content or the manner in which shareholders can be informed or monitor the management of the company. The practical content of this right is determined through a systematic interpretation of the above-mentioned provisions, together with those of Articles 192, 1887, and 1918 of the Civil Code.

It should be emphasized, however, that despite its brief regulation, this right exists. The High Court of Cassation and Justice concluded:

“The shareholder’s right to access the company’s documents is enshrined in law,” and
“An unjustified refusal to grant a shareholder access to the company’s documents, records, and registers attesting to the legal entity’s operations is an abusive act that cannot be upheld by a court of law.”
— Decision no. 4199 of November 27, 2013 – High Court of Cassation and Justice.

If the majority shareholder(s) or the managing shareholder refuses to provide access to documents, records, and company registers attesting to the company’s operations, this constitutes bad faith, which, depending on the circumstances, may lead to:

• a functional deadlock (due to the inability to vote in the General Assembly or to submit financial statements on time),
• the exclusion of the problematic shareholder,
• the dissolution of the company due to irreconcilable differences between shareholders,
• or even the liability of the administrator.

Author: Atty. Lavinia Rusu