by Corina Roman

When discussing 2025, we expect changes on multiple levels and with various consequences. Similarly, companies should expect changes that require the attention of their management and shareholders.

After many years without any changes, lawmakers around the globe decided that it was time to update how the companies’ scope of business was being mapped. Although the main purpose remains the streamlining of statistical processes, which enables a better cooperation between the various institutions drafting economic policies, the decision was also made due to the need to bring the Classification of Activities in the National Economy (NACE) up to speed and match a fast-paced economic reality.

Hence, after 16 years of no changes, certain classes of NACE codes have been compressed, while others have been reorganized and expanded. In Romania, after January 1, 2025, companies will have to align to the 3rd revised version of the NACE, introduced by the Order no. 377/2024 on the update of the Classification of Activities in the National Economy – NACE.

Regarding Trade Registry formalities, as per the latest draft order published for consultation by the Romanian Ministry of Justice, there appears to be no intention to set a hard deadline for updating the NACE codes constituting the companies’ scope of business. Basically, companies that will be incorporated in Romania after January 1, 2025, will need to include in their articles of association the new NACE Codes, while the ones already operating on January 1, 2025, will need to update their scope of business either on demand (as a special endeavor) or together with the following registration to be made in the Romanian Trade Register.

However, it is worth mentioning that updating the NACE Codes is not an option, but a requirement. Namely, in most cases, the directors of a company are the ones required to ensure that the company’s operation and existence are in accordance with the laws in force. With the help of the shareholders, if needed (depending on the company type), the changes will need to be approved and implemented in the articles of association of each company.

Hence, the first step would be to check if the NACE Codes already included in the company’s articles of association have suffered changes or have been removed. If the answer is yes, the activities previously covered by codes that are no longer included in the last revised version of the classification, will need to be replaced by one or more codes.

If changes need to be made, the articles of association must be updated, approved and then submitted to the Trade Registry, together with the other documents required to authorize the new scope of business of the company. A check of how changes will impact the authorizations, permits and licences held by the company, if the case, is highly recommended, since it might be necessary to either notify the issuing authority about the changes and/or obtain a new authorization/permit or license.

Last but not least, the right choice on the NACE codes might also trigger tax implications, since Romania has in place a tax framework that relies in part on the specific activities conducted by companies.

As always, planning ahead and carefully analyzing the arguments for a decision on how to implement any required changes will ensure a smoother and healthier transition towards compliance with the NACE Codes for the immediate benefit of all stakeholders involved.

This article was first published in the Which Lawyers in Romania magazine. Also, insights have been included in interviews with the esteemed avocatnet.ro platform.

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