Key reforms regarding the management of limited liability companies in Moldova

In a move to create a more adaptable legal framework and stimulate a favorable business environment, Moldova has recently implemented crucial reforms in the legislation governing limited liability companies. These changes, effective from October 22, 2023, introduce a range of benefits designed to enhance flexibility and encourage business growth, with particular implications for residents of the Moldova Innovation Technology Park (MITP).

Key Reforms:

1. Removal of the 50-associate limit:
   One of the most significant changes is the elimination of the maximum limit of 50 associates. This change provides unprecedented flexibility and expanded opportunities for association and business growth within limited liability companies. MITP residents stand to gain from the advantages of operating within a more extensive business structure.
2. Consolidation of documents:
   The reforms include the consolidation of the articles of incorporation and the bylaws into a single document – the bylaws. This streamlines administrative processes, simplifying the establishment and operation of limited liability companies.
3. Streamlined decision-making:
   The decision-making process has been significantly eased by reducing the threshold for the adoption of decisions by the general assembly of associates from 3/4 to 2/3. This adjustment aims to prevent potential activity blockages caused by decision-making difficulties.
4. Virtual general meetings:
   An innovative addition is the allowance for holding general meetings electronically. This eliminates certain convocation procedures, making remote decision-making more efficient and adaptable, particularly beneficial for MITP residents seeking swift and efficient decision-making processes.
5. Revamped voting rules:
   The proportionality rule between the value of social parts and their associated rights has been removed. Associates now have the flexibility to negotiate and establish new rules regarding the right to vote in certain situations. This includes a change to the proportion to 1 leu = 1 vote, offering associates more autonomy in decision-making.
6. Unilateral withdrawal for minority associates:
   A notable inclusion is the introduction of the unilateral right of withdrawal for minority associates (holding up to 33% of the social capital). This provides them with a clear and equitable exit route, determined proportionally in relation to the net asset value of the company.

Implications for MITP Residents:

These legislative changes carry significant implications for residents of the Moldova Innovation Technology Park:

• Business Expansion: MITP residents can now expand their businesses by increasing the value of their companies through contributions.
• Structural Flexibility: The removal of the minimum limit of associates provides MITP residents with an extended business structure.
• Administrative Streamlining: Unifying the articles of incorporation and bylaws simplifies administrative procedures, facilitating smoother operations.
• Efficient Decision-Making: The reduction in the voting threshold and the option for virtual general meetings allow for efficient decision-making processes.
• Flexibility in Association: MITP residents enjoy the flexibility to sell or exit their businesses at any time without obstacles.

Conclusion::

The introduced reforms signify a significant leap towards modernizing and flexibilizing the legislation governing limited liability companies in Moldova. The new legal framework emphasizes principles of equal treatment and good faith in corporate relations, promoting a more dynamic and progressive business environment.

Source: Official Monitor of the Republic of Moldova No. 325-327, Article 577, dated August 22, 2023 and mitp.md.