A client came to me with a decision imposing joint and several liability for a tax debt of almost two million lei. His first reaction: “But I left that company four years ago.” He was right, he had left, he had handed back the company seal. What he had not done was call the general meeting, file any written notice, or apply for the change to be recorded at the trade registry (registrul comerțului). At the date the decision was issued, the public register still showed him. His second reaction: “And anyway, I did not steal anything.” True, but that is a defence, not a shield.
The starting point is Article 72 of Legea nr. 31/1990, Romania’s Companies Act: the obligations and liability of directors are governed by the rules on mandate and by the special provisions of the companies law. A director is liable for fault, within the limits of the mandate.
Article 73(1) lists five instances of joint and several liability towards the company: the reality of the contributions paid in; the real existence of dividends distributed; the existence and proper keeping of the registers required by law; the exact carrying out of the resolutions of the general meetings; and the strict performance of statutory and legal duties. The procedural tool is the company’s action (acțiunea socială). For joint stock companies, Article 155 assigns it to the general meeting, and paragraph (4) carries a consequence that is often overlooked: if the meeting decides to bring the action, the directors’ mandate ends automatically from the date of the resolution. Article 155¹ allows shareholders representing at least 5% of the capital to bring the action in their own name, but for the company’s account.
Here a point must be made that many people miss: Article 197(4) of Legea nr. 31/1990 expressly provides that the rules on the management of joint stock companies do not apply to the SRL (societate cu răspundere limitată), the limited-liability company. The practical consequence: the “business judgment rule” in Article 144¹(2), under which a director does not breach the duty of prudence and diligence if he decided reasonably, in the company’s interest and on the basis of adequate information, is drafted for members of the board of directors of a joint stock company and does not, as such, extend to the director of an SRL. For the latter, the standard follows from Article 72 read together with the rules on mandate in the Civil Code, not from Article 144¹(2).
It does not require a lawsuit. The tax authority issues a decision, and you challenge it, within the time limit, on pain of forfeiture.
Article 25(2) of the Tax Procedure Code covers the outstanding obligations of a debtor declared insolvent and lists five instances exhaustively. The most frequently invoked is point (d): “directors or any other persons who, in bad faith, caused the non-declaration and/or non-payment by the due date of tax obligations”. The key defence point: bad faith is required for every instance and must be proved by the tax authority; good faith is presumed (Article 12(4) of the Code). There is no strict liability.
The High Court of Cassation and Justice (ÎCCJ) has been firm: failure to pay tax obligations by the due date is a simple presumption from which the conditions of tortious liability do not follow, and the idea of automatic liability for the director is contrary to the legislature’s intent. Bad faith requires a volitional attitude, foreseeing the harmful result and pursuing it anyway, and it must actually be proved, not presumed. Procedurally, Article 26 imposes a mandatory prior hearing: a decision issued without a hearing is null, an express nullity (nulitate) that does not require proof of harm. The decision must be challenged within 45 days of communication. I set out the procedure in detail in the analysis on joint and several tax liability, and when the amount established after inspection is enormous, the priority becomes stopping enforcement and the real limits of enforced recovery.
If the company enters insolvency proceedings, the insolvency judge can order that part or all of the liabilities, not exceeding the loss causally linked to the act, be borne by the persons responsible, for acts listed exhaustively: using the company’s assets or credit for personal benefit; continuing, for personal interest, an activity that was clearly leading to cessation of payments; fictitious accounting or the disappearance of documents; diverting or concealing assets; preferentially paying a creditor in the month before the cessation of payments; and other acts committed intentionally.
It was expressly extended to any natural or legal person who exercises control over the debtor’s financial or operational decisions, regardless of the formal capacity held. Whoever actually runs the company is liable, even if someone else appears on the documents.
Alongside the presumption concerning the failure to hand over accounting records, a presumption was added, until proven otherwise, that the accounts were not kept in accordance with the law where financial statements or tax returns were culpably not filed before the opening of the proceedings.
The previous regime, with a percentage threshold for creditors, has been replaced: the action can be brought by the judicial administrator or the liquidator, as well as by any interested creditor.
The law also provides for long-term consequences: a person against whom a final judgment imposing liability has been given is barred from acting as a director for 10 years and cannot found companies or acquire a controlling stake for 5 years.
The limitation period (prescripție) is governed by Article 170: the action becomes time-barred after 3 years, running from the date on which the person who contributed to the state of insolvency was known or should have been known, but no later than the date the report on the causes of insolvency is published in the Insolvency Proceedings Bulletin. This is the consolidated form after OUG nr. 88/2018, which replaced the old benchmark of “two years from the opening of the proceedings”, still repeated by many outdated sources. For proceedings started before 18 December 2025, the previous law remains applicable.
Article 67 of Legea nr. 31/1990 received four new paragraphs through Legea nr. 239/2025: companies that distribute dividends quarterly may not grant loans to shareholders, associates or affiliates until the regularisation is complete; companies whose net assets fall below half of the subscribed share capital may not repay loans taken from them; a breach triggers the joint and several liability of the company and the beneficiary shareholder or associate for outstanding budgetary obligations, up to the amount lent or repaid; and the act constitutes an administrative offence (contravenție), punishable by a fine.
Note the nuance: this provision does not establish the joint and several liability of directors. The joint liability concerns the company and the beneficiary associate, capped at the amount of the loan. The director remains exposed, but on the other grounds discussed here, not on Article 67. The mechanics of withdrawing money from the company and the lending restrictions are dealt with at length in the analysis on the director who “borrows” from the company.
Over everything said so far lies the criminal dimension: embezzlement (delapidare), simple and fraudulent bankruptcy (bancrută frauduloasă), tax evasion, fraudulent management. Who answers for the figures and who answers for the acts is a discussion with its own stakes; see the analyses on the liability of the accountant and the director, on embezzlement, disguised dividends or shareholder loans, and on fraudulent bankruptcy.
The de facto director (administrator de fapt) is liable even though he does not appear on the documents: Article 25(2) of the Tax Procedure Code speaks of “directors, associates, shareholders and any other persons”, and Article 169 of Legea nr. 85/2014, Romania’s Insolvency Code, after 2025, expressly targets whoever exercises control “regardless of the formal capacity held”. The analysis is evidential, not formal: what matters is who controlled the accounts, who gave payment instructions, who negotiated the key contracts. The “straw” director is the worst situation of all: he accumulates the exposure but has no documents to show that he objected and no access to the accounting records to defend himself on the merits. If someone offers you the position of director “on paper only”, he is offering you a risk that he does not want himself.
NOTE, this is exactly where the red line runs. A director who, seeing the company running into difficulty, documents his opposition, calls the general meeting, applies for insolvency in good time, and does not pay any personal debt out of the company’s account, is exercising management, perhaps poor, but defensible.
A director who, in the same circumstances, preferentially pays a related creditor, transfers assets to a new company run by the same people, “loses” the accounting records, or withdraws funds before applying for insolvency, is not doing asset protection: he is committing exactly the acts listed in Article 169 and, potentially, criminal offences, transfers that can be challenged through the Paulian action. The difference is not made in court; it is made in the months when things start going wrong, and it is proved with contemporaneous documents. What is lawful before an inspection is no longer lawful after it.
Article 169(5) exonerates persons who opposed the acts that caused the insolvency and had that opposition recorded, or who were absent from the decision. Unwritten opposition does not exist in law: if you disagree, ask for it to be recorded in the minutes, on the spot, not the next day.
Who decided, on what basis, with what information. Where it applies, the business judgment rule protects whoever decided on the basis of adequate information, that is, information that can be demonstrated.
The law requires directors, once the company runs into difficulty, to take the interests of creditors into account and to adopt reasonable measures to avoid insolvency. Document what you did and when.
Three steps, in order: written notice to the company; an application to record the change at the trade registry (registrul comerțului) within 15 days at most; and actually checking that the change has been recorded. Unregistered acts cannot be relied on against third parties; what matters is what the register says, not what you said in the office.
For joint stock companies, the law requires the director to be insured for professional liability (Article 153¹² of Legea nr. 31/1990), the obligation to take out the insurance falling on the company. There is no equivalent obligation for the SRL. The policy typically covers financial losses caused by culpable management acts, errors, omissions, negligence, and, practically essential, defence costs.
What it does not cover, as standard: acts committed intentionally or fraudulently; fines, penalties, interest and tax charges; acts giving rise to criminal liability; undue personal advantage. Overlay these exclusions on the grounds of liability discussed above, Article 169(h) targets acts committed intentionally, and practice underlines personal interest, and you get a sober conclusion: the real value of a D&O policy lies in the defence costs, not in the compensation itself. Read the specific policy terms, not the brochure.
For the period after the effective and enforceable end of the mandate, no. The problem is proving that moment against third parties: as long as the change is not recorded at the trade registry, unregistered acts cannot be relied on against them. In addition, Article 25(5) of the Tax Procedure Code limits joint and several liability to the obligations of the period for which you held the capacity on which the liability was based, one of the most effective defences where there were successive directors.
Yes, in several scenarios. Article 25(2)(b) of the Tax Procedure Code expressly targets associates and shareholders who caused the insolvency by disposing of or concealing assets. Article 169 of Legea nr. 85/2014, after 2025, targets anyone who exercises control over financial or operational decisions. And Article 67 of Legea nr. 31/1990 establishes the joint and several liability of the associate who benefited from the loan, up to the amount of the loan.
The tax authority must prove bad faith; good faith is presumed until proven otherwise. The case law of the High Court of Cassation and Justice is consistent: it cannot be presumed that tax debts went unpaid in bad faith, and poor management policies are not treated as bad faith. That does not mean you should remain passive; it means the defence is built by showing what you did.
The two procedures are distinct and can run in parallel: the tax authority issues its own decision, while in insolvency the action belongs to the judicial administrator, the liquidator or the creditors. Actual double recovery is limited by the mechanism of joint and several liability and by the right of recourse. The defence tool is res judicata: a final judgment that established the non-existence of the act, of fault, or of the causal link can be relied on in the other procedure.
Informative material, updated on 18 July 2026. It does not constitute legal or tax advice; individual situations must be assessed on their own facts. Legislation as at 18 July 2026.
If the matter involves a criminal complaint or an open file, the related analyses are grouped under economic criminal law. For how the defence is built, see director's and shareholder's liability.
Time limits run from the date of communication. A first conversation clarifies what is being alleged, what you need to substantiate and how the defence is built, before an estimate becomes a tax assessment decision.