Branch of a Foreign Company

A branch of a foreign company does not have its own legal personality or share capital. Being a unit of the parent company, branch activities cannot exceed the scope of activity of the parent company. Partnership as a legal form is seldom used in Romania. The three kinds of partnerships provided by law that lead to the creation of an entity with legal personality are general partnership.


Limited partnership and partnership limited by shares The partners in a general partnership and the active partners in a limited partnerships have unlimited liability with respect to the obligations of the partnership toward third parties. Among themselves, each partner is individually and collectively responsible for these obligations. The minimum capital is stipulated only for a partnership limited by shares (i.e., RON 90,000, equivalent of approximately EUR 25,715). No capital requirements are provided for the other forms of partnerships.

Domestic legislation allows for the conclusion of a joint venture agreement. Under this agreement, parties act together for the accomplishment of a common business goal. This form of doing business in Romania does not create a legal entity. Generally, one party is in charge of the bookkeeping of the joint venture. The analysis of a ratio can disclose relationships as well as form a basis of comparison that reveals conditions and trends that cannot be detected by an inspection of the individual components making up the ratio.

Some ratios may be described as being desirable, others as being weak. The analyst shouldn't become a slave to the numerical value of certain ratios, since they often mean more when compared to the same measure of earlier years, similar farms, or industry standards. It is important to realize that no two farms are alike. Again, the trend of these ratios over time is often more important than the ratio.