In the Official Gazette no. 595/12.07.2018 was published the Law no. 163, which provides the possibility for the shareholders to distribute dividends on quarterly basis. The law brings changes simultaneously to the Accounting Law no. 82/2991, Company Law no. 31/1990 and Association Law no. 1/2005. In order to regulate the accounting matters, the Ministry Order no.3067/2018 it was recently published in the Official Gazette no. 792/17.09.2018.
You may find below the main provisions brought by the above normative acts, which entered into force starting 15 July 2018.
According to the new provisions, the companies may opt to distribute the profits to the shareholders quarterly, during the financial year, to the extent of the net accounting profit of the quarter, adjusted with any profits/losses carried forward.
The persons that opt for the quarterly distribution of dividends must prepare interim financial statements, which should be approved by the General Shareholders Assembly. According to the provisions of a Ministry Order 3067/2018, these financial statements will include the balance sheet, profit and loss account and the significant accounting policies and there will be submitted to the tax authorities in 30 days following their approval by the Shareholders Assembly.
If the companies are required by the law to audit their annual financial statements, they will also be required to audit the interim financial statements.
The interim distribution of dividends are booked and presented in the interim financial statements as receivables from the shareholders. Specifically, as per the mentioned Order, the distribution is booked in account 463 “Receivables representing dividends distributed during the financial year”, balanced with account 456 “Settlements with the shareholders regarding the capital”.
The differences resulted by distributing the dividends during the financial year will be adjusted in the annual financial statements. The quarterly dividends distributed and paid in excess of the financial year’s profits, must be returned in no more than 60 days after the approval of the annual financial statements, otherwise the legal penalty interest will be applicable (currently 6,5% per year). The management of the company must ensure that these amounts are recovered.
The founder, the administrator, the manager, the general manager, the member of the supervisory board or of the directorate or the legal representative of the company who pays dividends from fictitious profits or which could not be distributed during the financial year based on the interim or annual financial statements, or which were contrary to these financial statements, shall be punished by imprisonment from 1 to 5 years.
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