Acounting Introduction

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Business Law_course 0_Introduction

OCT - 12 - 2013

C.Stoica, Dreptul afacerilorContracte, Editura ASE, Bucureti, 2012;

S.Crpenaru, Tratat de drept comercial romn, Ed. Universul Juridic, Bucureti, 2013;

R. Dimitriu, Romanian Industrial Relations Law, Ed. Intesentia, 2007;

S.Angheni, M.Volonciu, C.Stoica, Drept comercial (curs universitar), Ed. CH Beck, Bucureti, 2008;

C. Lefter, R. Dimitriu, O. Maican, Civil Law, Ed. Economica, Bucureti, 2000;

F.Baias, E.Chelaru, R.Constantinovici, I.Macovei (coord.), Noul cod civil. Comentarii pe articole, Ed. CH

Beck, Bucureti, 2012

Business law_course 1_Legal Rule

OCT - 13 - 2013

LEGAL RULE

THE STRUCTURE OF A LEGAL RULE

Each legal rule has an internal structure named the formal-logical structure and an external structure

called the technical-juridical structure.

The formal-logical structure of a legal rule

This structure shows the internal parts of a legal rule and their aims. Thus, any legal rule, usually, has

three parts or elements of structure, as follows:

a) the hypothesis. It is the part of a legal rule that describes the circumstances when a certain behavior

is requested. The hypothesis can be determinedwhen the circumstances are very detailed or

indefinitewhen the circumstances are generally provided.

b) the provision or command. The command is the substance, the core of the legal rule. It prescribes

what the person, the subject of law shall do under the circumstances provided for by the hypothesis.

Taking into account how precise the behavior provided for by legal rule is, the command might beabsolutely determined or relatively determined.

The command is absolutely determined, for example, when legal rule refers to an action or to a

non-action, such as: the merchants should be incorporated, the seller is obliged to warrant the

buyer, the judge is forbidden to

The command is relatively determined when legal rule allows the subject of the law to choose his own


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behavior, such as: the owner may take any appropriate decisions.

c) the sanctionIt is a part of a legal rule that specifies whose are the consequences in case of the

non-observance of the rules command.

It means that this part of the internal structure of a legal rule specifies the penalties the judge can take

against those who do not comply with the rules command. According to the determination rank the

penalty can be:

- absolutely determinedin this case the judge cannot modify it. For example the nullity of a contract;

- relatively determinedin this case, law provides for a minimum and a maximum limit of the penalty

and the judge might choose the concrete penalty in accordance with the gravity degree of the fact, the

perpetrator and his relapse into crime status. E.g. the fine is from 100.000 up to 5.000.000 lei, the

penalty is prison from 2 up to 5 years;

- alternative penaltiesin this case the judge might choose between 2 penalties, such as prison or

criminal fine;

- cumulated penaltiesin this case law provides for two or many penalties for a specific crime, such as

prison and withdrawal of rights (e.g. loss of parental authority or loss of associate right).

It should be mentioned that it is not necessary for a legal rule to have in the same article of law all these

three parts together. Frequently, the hypothesis or the sanction of a legal rule can be included in

another normative act, or in another article, but the legal rule cannot ever be deprived of its command.

The technical-legal structure of a legal rule

Legal rules are usually included into normative acts, the so-called laws, governmental decisions, ministry

orders, and so on.

Any normative act is divided into paragraphs, articles, sections, chapters, titles, parts or books.

The main element of this structure is the article. As it was mentioned above, it is not necessary that all

the three elements of structure of a legal rule belong to the same article. More frequently an article can

include many legal rules or a legal rule may be included in many articles.

THE CLASSIFICATION OF THE LEGAL RULES

Due to the fact that a lot of legal rules apply within a specific moment in time and in a particular state, itis important to find out which are the main features of each category of legal provisions. Thus, different

criteria are used to classify the legal rules, as follows:

A) According to the object under settlement, there are as many legal rules as branches of law are. Thus,

there are constitutional legal rules, administrative legal rules, civil legal rules, labor legal rules, etc.

B) According to their juridical force, the legal rules form a hierarchic system similar to the hierarchy of


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the state bodies which adopt them. Thus, in the top of this hierarchy there lie the state Constitution and

other fundamental laws, further, there are ordinary laws and decrees and then decisions and

government orders, and finally ministrys orders and instructions.

This hierarchy has a great importance when there are, and usually this is the case, many legal rules

adopted by different state bodies for the same field of social behavior. In this case, a well-knownprinciple is used to solve any possible confusion: the legal rules endorsed by the superior state body

have priority to apply.

C) According to the behaviors character requested, the legal rules can be classified as imperative rules

and disposal rules.

1) The imperative rules are those which require a specific action (imposed rules) and those which forbid

a specific action (prohibitive rules). We emphasize that it is not possible to depart from imperative legal

provisions and law forbids any contrary agreements as well as any restrictive interpretation.

a) The imposed rules are those which expressly provide for the obligation to do something, e.g. theseller has two main obligations, to deliver the goods and to be responsible for it

b) The prohibitive rules are those which forbid a specific action, e.g. the judge is forbidden to pass

general provisions through his rulings.

2) The disposal rules are those which allow the subjects of law to choose their behavior. These rules can

be :

a) permissive rules which allow the subjects of law to choose from the options provided for that one

which fits better to their interest, e.g. the landowner may build or till on his land anything he wants to.

b) suppletive rules which allow the subjects of law to choose their behavior and if they do not, the

provision of law applies, e.g. the agreements legally concluded have the force of law between the

contracting parties

D) According to the extend of their application, legal rules are general rules, special rules or exception

rules.

1) The general rules apply either within the entire system of law or within one of its branch, as being the

greatest comprehensive rules;

2) The special rules have a limited sphere of application, according to the specific criterion or thequalities of people. It should be noted that there is a close connection between general and special

rules. Thus, sometimes a rule can be called general rule as compared to a second rule, or special rule

as compared to a third one. This classification appears to be very important when two legal rules have

equal vocation to apply. In this case, always the special rule has priority to apply.

3) The exception rules allow the subject of law or the judge to depart from a general or a special rule

and thus their interpretation and application is very strict.


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E) According to the technique used for their drawing up, the legal rules can be classified as follows:

1) Complete ruleswhich have all the three elements of their formal-logical structure;

2) Reference ruleswhich do not have all the elements of their formal-logical structure and for the

missing parts they send to another normative act;

3) Blank ruleswhich also do not have all the elements of their structure, but the missing elements will

be completed in the future through another normative act.

THE INTERPRETATION OF LEGAL RULES

The interpretation of a legal rule is a logical and reasoning procedure to understand and to explain the

content and the real sense of a legal rule. The interpretation is important in order to have an accurate

application of the rule to a real situation.

The interpretation is a minds work that allows us to understand thro ugh the words used by law the

legislators spirit, his ideas and his aims.

This is why the interpretation is a preliminary step for the application of law. The interpretations

content deals with the human judgment to understand the legislators will. Thiswill forms the core of

the legal rule. The interpretations goal is to collect by frame a real situation to the legal provisions in

force and thus to make a rightful application of law.

The interpretations necessity

Firstly, we should emphasize that because of the wide variety of real situations a legal rule, even if it is

perfect, it cannot regard all of them.

Secondly, when we compare a real situation with the provisions of a legal rule, the latter appears to be a

static element versus a dynamic one. The real situation is the dynamic element of our analysis because

specific cases come out in real life. That is why the legal rule cannot take into account all the actual and

possible situations.

Thirdly, because the legislator cannot describe in detail all the social situations, he frequently uses

general terms to protect the persons rights and that is why the interpretation is more than necessary.

Fourthly, the interpretation is necessary each time when between different normative acts or different

prescriptions of the same law contradictions arise.

Finally, the interpretation is always necessary because the words may have, from the legal point of view,

other meanings than those of current speech.

The forms of interpretation

According to its juridical force the interpretation can be:


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1. official interpretation;

2. non-official interpretation.

1. The official interpretation is given by the state organ, which has this ability under law. Actually, the

Parliament, the government and the courts of law have this competence. The official interpretation, on

the other hand, can be:

A) legal or authentic interpretation. The legislative state body, which enacts the legal rule (parliament,

government or ministries), gives this form of interpretation. It should be mentioned that the

interpretation rule has the same juridical force as an imperative rule has;

B) judicial interpretation. This is given by the judicial organs (courts of law, tribunals, courts of appeal or

the Supreme Court of Justice) when they judge concrete cases. From the juridical point of view a judicial

judgment (decision or verdict) is compulsory only between the litigations parties. Therefore, this kind of

interpretation, the so-called casuistic interpretation, has compulsory power only in the concrete case

stand for judgment.

2. Non-official interpretation. Persons who do not act as representatives of a state body give the official

interpretation. As far as its legal force is concerned, this interpretation does not bind the judges, but

may help them towards a unitary application of law.

At the same time, the so-called lex ferenda proposals given through thenonofficial interpretation may

support the improvement of law.

According to the result obtained through interpretation, the interpretation can be:

A) literal interpretation;

B) extensive interpretation;

C) restrictive interpretation.

A) The literal interpretation, the so-called interpretation to the letter of law, means that the content

of law text and the practical issued solution are identical.

B) The extensive interpretation, the so-called interpretation to the spirit of law, means that by

comparing the content of a legal text and the practical issued solution, it appears that the legal rule

covers much more cases than the legal text shows. We emphasize that this kind of interpretation cannot

be used:

- when laws text gives limitative enumeration;


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- when laws text provides for exceptions;

- when laws text establishes presumptions;

C) The restrictive interpretation, the so-called interpretation to support law, means that comparing

the content of the legal text to the practical issued solution, it appears that the legal text is more broadly

formulated than the real intention of the legislator was.

According to the methods used:

With the view to its interpretation, law uses different means than other sciences. These means are the

so-called methods of interpretation. The methods of interpretation are the following:

1) grammatical interpretation;

2) systematical interpretation;

3) historical interpretation;

4) logical interpretation.

It should be noted that, as far as the result of interpretation is concerned, there are frequently used

different methods of interpretation in connection to one another. There is not any hierarchy concerning

these methods either.

1) The grammatical interpretation

As we mentioned above, the legislator includes in a legal rule the state will, and thus the rules

command has to be understood by the addressees, subjects of law. The rules command is expressed by

words linked together in clauses and sentences.

The words used to form the content of a legal rule should belong to common speech, should be well

known by the addressees and should help them to understand the legislators will.

That is why the legal rule has to be clear, accurate and precise. It also has to allow a simple and common

understanding and to be written in a concise style, without ambiguities. But, very often, the text of a

legal rule does not fit these requirements. Therefore, using the morphological and syntactical analysis,

we can interpret the legal text according to grammar rules.

The grammar interpretation takes into account the meaning of the words (the sentences morphology)

as well as the content of the sentences and the syntactical position of the word (the sentences syntax).

Thus:

- the words are used with the common meaning they have in the usual speech because laws language

should be the addressees language. It should be emphasized that the meaning of a specific word is the


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dictionary meaning and not the ordinary, local meaning;

- sometimes, the meaning of the word may be specific for the juridical field, even if the word is common,

e.g.: to give, to pay, payment, movable, Thus, to give commonly means to hand over

something, while from legal point of view it means to transmit a real right as the ownership right. In a

similar way, to pay usually means to give an amount of money, while from legal point of view it meansto execute an obligation (having as object either an amount of money or the handing over of goods); .

- when it is necessary, law itself explains the meaning of specific words, such as : living place, floor

space, legal person, etc.

2) The systematic interpretation

According to this method, the interpretation of law has to take into consideration the existing

connection between different legal rules or different normative acts referring to the same object under

settlement.

3) The historical interpretation

According to this method of interpretation, in order to understand the content of legal rules, the

interpreter should analyze the concrete conditions which have been determined for the endorsement of

law, such as: explanatory notes, the parliamentary debates within the Senate or the Deputies Chamber,

etc.

4) The logical interpretation

In order to explain the meaning of a legal rule, this method of interpretation uses the rules of formal

logic and its system of reasons.

The best known logical rules of interpretation are the following:

a) the exception has a very strict interpretation. Theoretically, an exception rule applies only under a

specific hypothesis it cannot be extended to other cases with different conditions.

Using this rule, we can settle the relation between general and special laws. Thus, special law (lex

specialis) is the exception, and general law (lex generalis) is the rule. Special law always derogates from

general law, but general law cannot ever derogate from special law.

For example: the creditors may exercise all the debtors rights or actions, except those which are

exclusively personal, such as divorce, fatherhood, etc.

b) nobody can limit the application of a legal rule because its general wording, ubi lex distinquit, nec

distingeure debemus: It means that, a general wording implies a general application.

c) a legal rule has to be interpreted in order to apply not to remove its application. It means that, the

purpose of interpretation is to support the application of law. In other words, from the logical point of

view, law was adopted in order to produce a juridical effect. If that effect cannot clearly occur, the


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adoption of law is senseless.

For example: when a contract clause has two meanings, it will be interpreted in order to have an effect,

not in the sense it cannot have any effect. Another example: the future litigati on between parties will

be solved according to law it means that, no matter who is called to judge the trial (litigation), court

of law or arbitration tribunal, it should solve the case according to the existing legal provisions.

d) Besides these logical rules, in order to interpret legal rules, the logic interpretation uses logical

arguments. The most frequently logical arguments are:

1) The argument per a contrario. This argument applies the rule of a third partys exclusion, meaning

that A cannot be A and non-A at the same time. In this respect, the Latin said tertium non datur or

qui dicit de uno, negat de altero, qui de uno negat de altero dicit. In other words, anytime when a

specific command is provided for by the legal rule, the opposite command is denied. For example: it

cannot depart from law of public regime towards contracts or specific agreements.

Using the above-mentioned argument, it means, per a contrario, that we can depart from laws that arenot related to public regime.

Nevertheless, it should be mentioned that this argument has a relative value because the silence of the

law is not always equal to the opposite command.

2) The argument a fortiori rationae. This argument is used in order to extend the application of alegal

rule to an unknown case, which has similar conditions with the case provided for by the legal rule or

belongs to the same category of cases. In this situation, in spite of the fact that there is no direct

solution for the case under the application of a legal rule, the judge should take into consideration the

spirit of law and not the laws words.

3) The argument a majori ad minus, or in other words, qui potest plus, potest minus. This argument

means that those who can do more can do less. For example, the Constitution guarantees the

fundamental citizens rights and thus, the labor rights are also guaranteed by Constitution.

d) The argument of reductio ad absurdum. This argument is based on the fact that among the

different meanings of a legal rule there should be used that one which suits better to the rules aim. For

example, commercial law does not have compulsory provisions regarding the minimum amount of the

register capital for some private companies as sleeping partnerships or general partnerships. That does

not mean that this kind of companies do not have any capital requirements.

Indeed, according to the provisions of commercial law, any company, no matter its form, must have a

capital in order to fulfill its commercial activities. In this case, using the argument ad absurdum, we

should understand that sleeping partnerships and general partnerships companies should have a certain

capital, but its amount is not imposed by law and thus may vary according to the partners will and their

financial possibilities.

The establishment of a legal rule


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To settle a legal rule means to identify that legal provision which suits the above-established reality and

to select that rule which should apply to the present case. The difficult process of framing a legal rule to

a real situation is named juridical qualification. An application act based on an accurate judicial

qualification is named legal act. This is why the legality is the second condition of the validity of an

application act.

As soon as the solidity and the legality of the act are pointed out, the application act will be issued

according to the condition of shape and the content provided for by law. The conditions of shape and

content of a legal act are studied by civil procedural law. The application act cannot be mixed up either

with normative acts (which express the state will) or with acts (which express a private will).

The application act must be the result of a logic and scientific process made by the judge. On the ground

of the proofs presented to him, the judge has to make a correct application of those legal rules

appropriate to the case and to issue a legal and justified solution (judgment).

The application of law

When we speak about the application of law we usually take into account three main factors which limit

our judgment. These factors are:

- a certain period of time when a particular law applies;

- a certain territory where a particular law applies (because law is always national and there are as many

different laws as states are);

- certain persons to whom law addresses its commands.

Grounded on all these three approaches, it is frequently included within the application of law thefollowing topics:

1. the application of law in time;

2. the application of law in space;

3. the application of law to people

1.The application of law in time

As it was mentioned above, the living conditions within the society change every day, they are, not the

same throughout the years. It appears that in order to have a correspondence between the state will

and the societys reality, it is necessary to modify the legal rules according to these changes. Indeed, it is

senseless to apply to day, in Romania, legal rules adopted hundreds years ago for regulating the

relationships between the king and his subjects. And thus, the human behavior requested by state is

different in time and the societys development implies new legal rules.


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Nevertheless, nobody can say when, as a certain moment in time, a particular law has to be changed.

Thus, law will be changed whenever it is necessary, because its legal provisions do not correspond any

more to the societys development.

We should also emphasize that at a particular moment, a plurality of laws may coexist in a certain space.

For states bodies or private persons it is very important to know which laws apply at a particular

moment, because the applicable law will be the measure of their behavior. From this point of view, the

principle is very simple at each moment in time, law which is in force should be applied, but law is not

in force forever.

Thus, the issue here is to ascertain the period of time when law is in force.

It means, to establish the moment when a law begins and ends its application. In the respect of its

application, law applies from the moment it enters into force until it no longer applies (it ends its

application, no matter in what way). It should be also emphasized that there can be a difference, in

time, between the moment when law is adopted and the moment it enters into force. These momentsare frequently not the same, as it will be explained further.

a) The laws entering into force

According to the provisions of Romanian Constitution, law can enter into force only after the President

of Romania enforced it. The enforcement of law is the last stage of the so-called decision-making

process.

This process begins when the legislative draft of law, prepared by the ministers or other states bodies

or political parties is forwarded to the Parliament in order to be adopted.

At the Parliament level, the draft is discussed and approved, first of all, by the specialized commissions

of the Parliament, according to the laws field.

Secondly, the draft is subject to the Chambers (Deputies Chamber and Senate) discussions. At this

moment, the draft may be amended and goes back to the specialized commissions for a new approval or

may be approved by each Chamber.

If the form of the draft approved by each Chamber has the same content, law is sent to the President for

enforcement.

The President may enforce it or may reject it. In this latter case, law is sent back to the Chambers forfurther discussions.

In fact, the enforcement of law means that the President signs the draft of law as it was approved by

Chambers and orders its publication. Thus, theoretically, law enters into force on the date of its

publication in the Official Monitor of Romania (the Official Monitor of Romania is the only means of

legal publicity in Romania) or on a further date expressly mentioned within the content of law.


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b) The end of the application of law

The application of law usually ends towards its abrogation (or repeal). We may have different kinds of

abrogation, but the result is always the same: law ends its application.

Firstly, according to the way the abrogation occurs, it can be express or implicit (tacit) abrogation. The

abrogation is express when new law expressly specifies that the application of a specific law comes to an

end. The express abrogation, on the other hand, can be either direct or indirect.

The direct express abrogation occurs when new law mentions which laws or the articles of a particular

law are repealed (abrogated).

The indirect express abrogation occurs when new law specifies that all legal rules contrary to that new

law are repealed.

The implicit abrogation occurs whenever a new law, without mentioning what old law is abrogated, has

incompatible provisions with the latter.

Secondly, taking into account its extend, the abrogation is total or partial.

2.The application of law in space

Speaking about where law has to apply, we should remember that a special state body empowered with

this task always adopts law. Thus, the legislative power of the state delegated to different state bodies

express the state sovereign right to impose certain rules of behavior. But, because each state has its

own national sovereignty, and has to observe the sovereignty of other states, its laws cannot apply

beyond its national territory.

Usually, the application of law in space is governed by the principle of territoriality. By the idiom

territory of the state we understand the area of lands and waters contained between t he borders of

the state including the afferent air space, as well as the continental plateau of the sea and the territorial

sea (12 miles). .

3.The application of law to people

As it was mentioned above, the beneficiaries of legal rules are natural or legal persons. It means that law

applies equally to all persons regardless their sex, nationality or race. In other words, it means that

people are equal in front of law. However, that does not mean that law applies in the same way and

with same limits to all persons. From this pointy of view, there are laws with general application (such as

Constitution or civil code) and laws which apply only to specific persons (Law no.31l1990 republished,

regarding commercial companies). In addition, we emphasize that the application of law is always

national because, as it was mentioned above, law applies only on the national territory.


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Business Law_course 2_Legal Relation

OCT - 13 - 2013

LEGAL RELATION

2.1.Definition

The legal relation is a social relation, patrimonial or not, regulated by law.

2.2. Elements of legal relation

1) the object of the legal relationthe behavior of the parties

2) the content of legal relationthe ensemble of rights and obligations

3) the subjects of legal relationthe legal and natural persons

2.3. Object of Legal Relation

1) Classification of goods

The classification of goods has more a practical importance than a theoretical one because it determines

the legal regime that applies to different categories of goods.

1. Following the regime of legal circulation, there are goods in civil circuit and off civil circuit.

a). There are goods in civil circuit all the goods that can be object of civil juridical acts. It means that

there can be alienated or obtained through civil acts. In this respect we can say that all the goods are in

civil circuit if law does not expressly forbid their free circulation. Thus, as a rule, all the goods are in civil

circuit and law must expressly provide the exceptions.

The goods in the civil circuit are divided in two categories:

a.1) goods in free circulation. Such goods can be object of any contract with no restrain;

a.2) goods with a restrictive circulation which are subject to a special legal regime due to public

security reasons, such as: guns, ammunition, flammable materials.

b). The goods off the civil circuit are those which cannot be object of civil juridical acts. Indeed, the

goods belonging to public domain are usually out of the civil circuit. Thus, according to Art. 5 from

Romanian Constitution the goods from the public property are inalienable. In addition, Art.5 para.2


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from Law no.18/1991 stipulates that the lands belonging to public domain are off the circuit if law does

not provide otherwise. The property right on them is indefeasible.

2. Based on the nature and qualification made by law, the goods are movable and immovable.

Civil code expressly stipulates that The goods are movable or immovable. This characterization is

based on a social and economic value criterion.

Movable goods are classified as follows:

a.l) The goods movable by their nature are those which can be transported from one place to another,

either those that are moving themselves, such as animals or those that can be moved with the help of a

foreign force, such as inanimate things.

a.2) The goods movable established by law are those considered movable based on the object they

apply to. In other words, they are incorporated in the object. .

There are movable goods established by law the bonds and the shares that have as object due amount

of money or movable goods. Similar, the shares and interests in financial, trade or industrial companies

are movable goods even if their registered capital is made up of immovable goods.

The shares and the interests are considered movable goods only in the respect of each shareholder or

the partner and during the time of association. There are also considered movable goods the perpetual

and lifetime revenues on the state or on the private persons.

Moreover, law considers movable goods: real rights except the ownership right that have as object

movable goods (such as the usufruct right, the use right or the pledge right); debt rights that have as

object movable goods and the obligation to do or not to do; shares and other social contributions to

the registered capital of a company; the right of industrial property (such as the inventors right, the

innovation right, the right to have a firm or a trademark, etc.).

a.3) Goods movable by anticipationto Art.540

This category includes certain immovable goods by their nature, but which are considered by the parties

of a legal act as movable by anticipation because they will become movable in the near future.

For example, there are considered movable goods by anticipation: harvests and fruits which are not

picked up yet, bushes attached on roots; materials coming from demolition of a construction;

non-extracted products of a quarry (stone, marble). It should be emphasized that, the above mentionedgoods, have this movablecharacter only through the will of the contracting parties who consider them

as such. Indeed, for third parties these goods are immovable but will become movable by separating

them from the background (cutting, picking, demolition).

b) Immovable goods

Immovable goods are those which cannot be transported either by their own energy or by a foreign


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energy. If we take into account the fact that the earth is moving all the time, nothing is immovable.

Immovable goods are classified into:

b.1) Immovable goods by their nature.

According to 537 civil code lands and constructions are immovable by their nature. It is usually

admitted that the expression construction refers to all constructions or works built on the ground or

underground such as warehouses, bridges, tunnels, channels, brake water, etc.. At the same time, we

emphasize that all the parts of a construction are considered immovable by their nature through their

incorporation in the building or by their destination, such as the windows, the doors, the installations,

etc.. The legal provisions mentioned above also stipulate that the windmills or the watermills situated

on pillars, uncut trees, harvest attached on roots, non-picked up fruits, vegetation stuck to the ground

are immovable goods by their nature.

b.2) Immovable goods through the object they apply to. There are immovable goods through the object

they apply to the usufruct right of the immovable goods, the servitude right, lawsuits for recovery ofproperty.

By interpreting these legal provisions we emphasize that there are included into this category all the

rights having as object immovable goods.

Thus:

- real rights excepting the ownership right (the ownership right is immovable by its nature because the

right is confused with the thing);

- debt rights regarding immovable goods which correspond to the obligation to give;

- actions regarding the evaluation of the real estate rights, such as action of recovery of property, or

petitory action of usufruct, or mortgage action and the action for claiming a servitude;

- actions regarding the nullity of alienation of a building; the resolution of selling a building; cancellation

of a donation of building; the reduction of a donation of building.

b.3) Goods immovable by destination. This category is provided by Art.538

It includes some movable goods by their nature but which can be considered immovable because they

are designated as annexes for the service or exploitation of that building. In order to qualify goods as

immovable by destination two conditions should be cumulated observed:

1) both goods (the building by its nature and the movable goods) should belong to the same owner at

the moment the destination is established;

2) those two goods should have the same destination, it means that the movable goods follow the same

juridical position as the immovable goods have. It is the so-called accessory relationship, accesorium

seguitur principalem. This relationship can be established either when the movable goods are affected


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for the exploitation or service of the principal (immovable) goods or when it is materially or artificially

attached to the immovable goods.

There are immovable by destination:

- goods used in agricultural operations, such as: animals used for harvesting, different instruments,

seeds, animals dependent to the buildings as rabbits, fishes, water channels;

- goods used in industrial operations, such as: tables, furniture, machines;

- movable goods attached forever to the owner, such as: movable in cement or movable that cannot be

removed without damaging them (mirrors, pictures, statutes) etc.

This classification is important from the legal point of view because each of these categories of goods

(movable and immovable) has a different legal regime.

Thus:

- the ownership right on real estate is submitted to special publicity which has as purpose to achieve the

opposability of this juridical operation towards the third parties;

- the alienation of real estate is strongly regulated (taxes, authentically act, registration in a special

register, etc.);

- the immovable goods can be mortgaged and the movables goods can only be pledged (with some

exceptions: ships, aircrafts);

- a real estate can be acquired through acquisitive prescription (possession), while the possession in

good faith of movable goods is equal to their property right (Art. 928 Civil. code);

- the place where the real estate is located determines the judicial court which has the competence to

judge the lawsuits having as object that real estate (actor seguitur forum rei sitae). In case of movable

goods, the judicial instance legal competent is that of the place of defendant (actor segiutur forum rei);

- according to private international law, law of place where the real estate is located applies to

immovable goods (lex rei sitae) while law of the owner of the goods applies to movable goods (lex

personalis that can be lex patriae or lex domicilii).

3. According to the way used to determine them there are goods individually established (res ceria) and

generally established (res genera).

a) there are goods individually established, those which by their nature or by the will of the parties are

individualized by specific features and characteristics (a certain car, a certain house, a certain watch, as

well as all unique things).

b) there are goods generally determined, those individualized by features corresponding to a class or

category they belong to. These goods can be counted, weighed or sized, such as a certain quantity of


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wheat, cement, apples.

This classification is important for the following reasons:

- the moment when the real right is transferred is different. Thus, in case of individually established

goods, the real right is transferred at the very moment when the agreement of the parties was achieved,

even if the goods were not transferred yet or the parties did not agree otherwise. In case of generally

established goods, the real right is transferred at the moment when the goods was individualized or

handed over.

- the risk of the contract is differently supported. Thus, if individual established goods accidentally

vanished before there were handed over, the debtor is exempted to hand them over. But, if the

vanished goods are generally established, the debtor is bound to hand over other goods from the same

category.

- the place of delivery is different. Thus, the individual established goods must be delivered at the place

where they were at the moment the contract was concluded, if the parties did not agree otherwise. Incase of generally established goods, the delivery takes place at the debtors domicile because the debt is

not payable at the address of payee.

4. According to the fact that the goods can be substituted or not where the payment of the civil

obligation is concerned, goods are fungible and non-fungible. .

a) Fungible goods are those which can be substituted for each other within the payment of a debt.

b) Non-fungible goods are those which cannot be substituted for each other and therefore the debtor is

not exempted from his obligation if he delivers another good.

It should be mentioned that, the fungible character is determined either by the fact that the goods are

generally established or by the will of the parties.

Usually, the generally established goods can be always substituted for each other, while individual

established goods cannot.

This classification is important within the payment of the civil obligations.

Thus, the debtor is exempted only if he delivers. to the creditor goods of the same good, but the debtor

makes a valid payment only if he gives the exact individual established goods agreed upon.

5. After their quality to produce or not fruits the goods are classified into producing and non-producing

goods.

a) the producing goods are those which periodically produce other goods, the so-called fruits without

consuming their substance;

b) the non-producing goods are those which do not have the quality to produce other goods.


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According to Art.548 Civil code there are three types of fruits: natural, industrial and civil fruits.

- natural fruits are those produced by the ground itself (berry fruits, grass-land) as well animal breed

(according to Art.548 par. 1 Civil code);

- industrial fruits are those obtained by culture or by mans activity(Art.548 par. 2 Civil code);

- civil fruits are: the rent, the interest of due amounts, the profits from rent or lease (Art.548 par. 3

Civil code).

It should be mentioned that the fruits are not to be confused with products. The products are the

benefits extracted from goods that consume their substance (marble, stone or sand from the quarries)

Art.549 Civil code.

This classification is important because it explains in what way these fruits are obtained. Thus, natural

and industrial fruits are obtained by picking them up, while civil fruits are obtained daily.

The difference between fruits and products is important from the usufruct and possession points of

view, as follows:

- the one using the good is entitled only to the fruits and not to the products that belong to the owner of

the goods;

- the possession in good faith leads only to ownership right of the fruits but not of the products.

6. As far as the use of the goods implies or not their consumption, there are consumable goods or

non-consumable goods.

a) Consumable goods are those which consume their substance by use or are alienated at their first use.

b) Non-consumable goods can be repeatedly used, without consuming their substance by use or

alienation.

From the legal point of view, the term consumption means not only material consumption but legal

consumption as well (such as alienation or erasing from the patrimony).

It should be mentioned that some goods are consumable by their nature such as the fuel or money. The

other goods are not consumable by their nature, such as lands, buildings, and equipment.

This classification is important for loan and usufruct. Thus, consumable goods can be only the object of

the consumption loan contract (mutuum), while non-consumable goods are object of loan contract

If the object of the usufruct is non-consumable goods, the one using the good must return to the owner

the same goods and, at the same time, he is obliged to preserve their substance.

7. As far as the goods can be divided without changing their economic substance there are divisible and

non-divisible goods:


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a) Divisible goods are those that can be divided without changing their economic destination;

b) Non-divisible goods are those that cannot be divided without changing their economic destination.

The legal importance of this classification is reflected within civil obligations and conventional or judicial

partition, thus:

- conventional or judicial partition applies to in case of common property (in fact, to co-ownership and

joint property). If the goods is not divisible, it is given either to one of the owners and the others are

entitle to an additional payment in order to equalize their shares or it is sell in auction and the price is

divided afterwards;

- in case non-divisible goods are object of an obligation relationship with more subjects of law (passive

pluralism), it determines a natural co-ownership.

8. After their perception, the goods are tangible and intangible.

a) Tangible goods have a material existence and can be touched using human senses. It should be

mentioned that most of the things are generally tangible goods.

b) Intangible goods have an abstract, ideal existence and cannot be touched with our senses. This is the

case of all the rights provided for by law, such as real rights, debt rights or authors rights.

In fact, this classification makes the distinction between rights and goods, not between goods. At the

same time, we emphasize that tangible goods participate within real life only through the rights which

are exercised on them. This is why, it is usually considered that the goods absorb rights (we do not say I

am selling the ownership right over a car but I am selling the car, even if in reality all the legal

prerogatives are alienated together with the car).

This classification is important because it reefers to the acquirement of the ownership title. Thus:

- only the tangible movable goods can be acquired through possession in good faith or by simple

delivery or hand over;

- securities can be transferred in different ways depending on their form.

Indeed, the bearer bonds are transferred by handing or delivery, while registered shares are transferred

by cession. Also, the bills payable to order are transferred by endorsement.

9. Following the correlation between goods, there are principal goods and auxiliary goods.

a) principal goods are those that can be use independently;

b) auxiliary goods are those goods which help the use of principal goods.

Thus, by their destination these goods are attached to principal goods and support their use, such as the

immovable by destination are or the TV antenna.


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The classification is important in case of the achievement of civil obligations. Thus, according to the rule

accesorium sequitur principalem, the debtor must pay for the principal goods together with the auxiliary

ones, unless law stipulates otherwise.

2.4. Content of Legal Relation

1) Classification of Rights

Absolute and relative rights

a) The absolute right is that subjective civil right according to which the established owner has the

possibility to exercise it alone and all the other persons have the general and negative obligation not to

do something that could jeopardize the owners right.

The absolute right has the following specific features:

- the juridical relationship that contains an absolute right is established between its owner, as definite

active subject and all the other persons as passive subjects;

- the content of the indefinite passive subjectsobligation is always the same: not to do something that

could jeopardize the owner of exercising his prerogatives;

- the absolute rights are opposable to all persons, erga omnes. It means that everybody is bound to

observe the prerogatives held by the owners of these rights.

In this category there are enclosed the personal and non-patrimonial real rights (the right to have a

name, etc.) and patrimonial real rights such as the ownership right and its dismemberments (use,

usufruct, servitude, and so on).

b) The relative right is that subjective right according to which the definite active subject (creditor) has

the possibility to pretend from the definite passive subject (debtor) to give, to do or not to do something

for him. The relative rights have the following specific features:

- both the active and the passive subjects are determined from the beginning of the juridical

relationship;

- the obligation of the passive subject consists of his duty to give, to do or not to do something. Thus,

the content of the obligation is not always the same, it consists either an action or an abstention;

- this right is opposable only versus a definite person (erga certam personam).

We emphasize that in case of debt rights, the content of the passive definite subjects obligation is to

give, to do or not to do something. When the passive subjects obligation is negative (not to do) its

content is different from one juridical relationship to another. Thus, by not to do, the person abstains

from doing an action that is not forbidden by law, but the debtor himself, through his own will has

limited his own right. For example, the offer to sell a good to a person at an established date obliges the

offer or not to sell to another person until the deadline, otherwise law does not forbid him to sell the


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good to whom he wants to.

Patrimonial rights and personal, non-patrimonial rights

a) The patrimonial right is the subjective right that has an economic content or in other words which can

be estimated in money.

b) The personal, non-patrimonial right is the subjective right that has no economic content. In other

words, it cannot be estimated in money and it is connected to the person. Therefore it is used to

individualize the person. These rights individualize the person within the society or his family or refer to

the non-patrimonial aspects of the intellectual creation rights.

Patrimonial rights (that together with their corresponding obligations form the patrimony of the

persons) are classified into real and debt rights as follows:

a.1) real rights (jus in re). There are those subjective rights according to which their owners can directly

exercise their attributes towards a thing/goods without the intervention of another person;

a.2) debt rights (jus in personam). There are those subjective rights according to which the active subject

(creditor) can pretend to the definite passive subject (debtor) to give, to do or not to do something.

There are some differences between real and debt rights, as following:

- in case of real rights, only the active subject is definite, while in case of debt rights both subjects are

determined;

- in case of real rights, the content of the obligation is always not to do, while in case of debt right is

to give, to do or not to do something;

- real rights are limited in number and are expressly stipulated by law, while debt rights are unlimited;

- the real right owner exercises his prerogatives alone, while the debt right owner needs the action or

non-action of the others (to give, to do, not to do);

- real rights are absolute rights, opposable erga omnes, while debt rights are relative rights, opposable

erga ceria personam;

- real rights can only have as object sure things (res ceria), while debt rights can have as object either

sure things or general established goods (res genera). For example, the obligation to sell 10 tones of

cement;

- the owner of a real right has in addition of his prerogatives the right of pursuit and the right of

preference. The right of pursuit consists in the possibility recognized by law to the owner of the real

right to pretend the goods, wherever there are.

So, if the owner of a mortgaged apartment sold it before the payment of the debt warranted with the

mortgage, the creditor can follow the apartment wherever it is, because that apartment could not be


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sold unless the debt is paid. The right of preference consists in the possibility recognized by law to the

owner of a real right to be satisfied with priority in front of other owners who have obtained their rights

later.

The same right of preference applies versus the owners of debt rights without warranties (the so-called

simple creditors). Thus, the owners of a real right will be paid according to the order of the date oftheir rights. In the same way, the owner of a debt right warranted with pledge can ask for his debt to be,

paid before the creditors that have not the right of pledge;

- from the procedure point of view, in case of real rights, the lawsuit is instituted before the court where

the goods are located, according to the rule actor seguitur forum rei site. The action is the so-called real

action because through it only the goods are followed, while the person is taken into account only in

relation with the non-observance of his real right. In case of debt rights the lawsuit is instituted before

the court competent according to the headquarters of the debtor, following the rule actor seguitor rei.

At their turn, the real rights can be classified into principal and accessory real rights.

Thus:

a.1.1) Principal real rights have a self-existence and are established by civil code and other normative

acts. The following are considered principal real rights:

- the right of public property that belongs either to the state (public domain of national interest), or to

the administrative territorial unit of the county, the city (public domain of local interest) as legal persons

of public law; the regime applicable to this ownership right is legal regime of public law and the goods

belonging to the public domain are out of civil circuit;

- the right of private property, having as owners natural and legal persons (with state or mixed capital,or cooperatives) including the state private domain having as owners the State and the administrative

territorial units in which they are acting as legal persons under private law;

- the dismemberments of private ownership right, such as : usufruct right, right of occupancy, right of

servitude.

a.1.2) Accessory real rights are those which cannot exist alone. Their lends on other rights that they

guaranty.

There are accessory real rights: pledge or pawn right; mortgage right and privileges. The latter can be

general privilege on all the debtors goods or general privilege on entire movable goods or specialprivilege on real estate.

Pure and simple rights and rights affected by modalities

Pure and simple right is that created within a juridical relationship in its most simple form. It supposes a

creditor, a debtor and a single object. This right produces its effects immediately, giving to the owner

full power. Therefore the debt is due from the moment the contract is concluded.


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Rights affected by modalitiesthe time and condition produce specific effects.

2.5. Subjects of Legal Relation

A. The Legal Capacity of Natural Person

The legal capacity can be defined as being the natural persons abstract and general ability to have rights

and obligations and to exercise their rights or to assume their obligations by concluding juridical acts on

their own name.

We emphasize that each person has his own legal capacity and has only one. Moreover, law can only

state who has legal capacity and when, as well as in what conditions a person loses his legal capacity. In

other words, the legal rules regarding the legal capacity of persons are imperative provisions and thus,

they should have a very restrictive interpretation and application.

The legal capacity deals with two issues:

1) the abstract capacityor the persons ability to have rights and obligations;

2) the concrete capacityor the persons capacity to exercise the above rights or to assume their

obligations by concluding on their own name juridical acts.

We emphasize that, all natural persons have the legal capacity under law, but the moment when it is

granted to them is different for each part of this capacity.

Thus, the abstract capacity is granted under law to each human being from the moment of his birth, or,

by exemption, from the moment of conception. But, in this latter case, the person can get only rights.

Furthermore, the way of the correlative obligations is suspended till the moment of the birth when the

legal representative of the child (parent or tutor) can assume the obligations. The abstract capacity ends

when the natural person dies, no matter the ways this event occurs. The abstract capacity also ends by a

final judicial conclusion of death or disappearance announcement. .

The concrete capacity is granted, according to Romanian law, at the age of 18. At this age it is

presupposed that the human being has the capacity to understand his actions and to decide what to do.

In other words, at the age of 18 the person is considered under law to be mature and therefore gains his

full concrete capacity.

The underage persons (persons under age of 14), the non compos mentis (weakly/mental handicap)

persons and the people under judicial guardianship have not at all concrete capacity.

Law divides the so-called restrained capacity, the period between 14 and 18 years old, in two intervals:

the first between 14 to 16, and the second between 16 and 18.

During the first interval of their restrained capacity the persons can conclude some juridical acts (e.g.

will, employment contract) on their own name.

Sometimes, as it is the case of the employment contract, they need a preliminary consent of their legal


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representatives (parents or tutor). According to the provisions of civil code, an underage person can

dispose through will for half of his fortune. Also, a girl can marry at the age of 15 with the preliminary

consent of her legal representative, but a boy cannot. Through marriage, the girl obtains the full

concrete capacity because it is possible that she becomes a legal representative for her future child.

B. The Legal Capacity of a Legal Person

The abstract capacity of legal persons

The abstract capacity of a legal person means its general and abstract ability to have rights and

obligations. Nevertheless, no matter which branch of law is involved (commercial, civil, administrative,

financial, etc.) a legal person is a subject of law. Thus, all the rights and obligations which may occur

from these different branches of law will form the content of the legal persons abstract capacity.

Indeed, as a subject of law, the legal person has only one legal capacity and each legal person has its

own legal capacity. In other words, the legal capacity of a legal person is unique, as it is for the natural

person too.

But, in fact, unlike the abstract capacity of a natural person, the general and abstract ability of a legal

person to have rights and obligations is limited.

The abstract capacity of a legal person has the following juridical features:

1) it is legalmeaning that it is stipulated by law and nobody can extend or limit its content;

2) it is generalmeaning that the rights and the obligations which form the content of the abstract

capacity are not exactly provided for by law for each legal person. Thus, the limits of the abstract

capacity result from the legal persons object of activity;

3) it is inalienablemeaning that the abstract capacity cannot be alienated or yielded either in total or

in part by juridical acts. Moreover, any act of renunciation or alienation regarding the abstract capacity

of a legal person is absolutely void (null). This sanction occurs because a renunciation act has as juridical

effects the cessation of the legal person and that may happen only through the ways provided for by law

(e.g. the merger, the division or the dissolution);

4) it is intangiblemeaning that it can be limited only by law and these limits depend on the object of

activity of the legal person. These limits also express the principle of specialization;

5) it is specialthe specialization of the abstract capacity is that character which departs the abstractcapacity of a legal person from the abstract capacity of a natural person. Thus, the content of the

abstract capacity of a natural person is the same for all natural persons and for each of them, but for a

legal person, the content of its abstract capacity is different according to the goal for which each legal

person has been set up.

The beginning of the abstract capacity of legal person


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Taking into account the fact that the legal person is submitted or not to registration, its abstract capacity

begins at different moments. Legal persons are submitted to incorporation or registration, if the

applicable laws provide for the incorporation or registration.

Thus:

1) No matter the way of setting up used, the legal persons submitted to registration obtain their

abstract capacity on the date of their registration;

2) The legal persons which are not submitted to registration obtain their legal capacity according to the

way used to set them up. In fact this moment can be the date of the order of the state organ I

competent to set them up; the date of the recognition act; the date of the authorization act or the date

when any other legal requirements have been fulfilled.

3) Other legal persons obtain their capacity to have rights and obligations on the date of the order of the

state organ competent to set them up, on the date of the recognition or authorization act. Finally, there

are legal persons that obtain their abstract legal capacity and are valid set up on the date when otherlegal requirements have been fulfilled.

We should emphasize that the date of registration or the dates of the other acts which have to be

observed for a valid setting up (act of recognition, act of authorization, or other legal requirements)

have a constitutive effect. It means that these dates mark the moment when the full abstract capacity

begins. This moment is considered as follows:

4) the date of their incorporation in the Register of trade for:

- the commercial companies (according to Art.20 from Law no.26/1990)

- the States Companies (according to Art.20 from Law no.26/1990);

- the crafts-mens co-operative organizations (according to Art.20 from Law no.26/1990 and Art. 10 from

the Decree-Law no.66/1990) ;

- the consumers and credits co-operative organizations (according to Art.20 from Law no.26/1990 and

Art.8 from Decree-Law no.67/1990).

5) the date of the authorization act for the political parties and public organizations. It should be

mentioned that according to Art.4 from Decree-Law no.8/1989 and Art.19 from Law no.54/1991, the

date of the authorization act is the date when the judicial conclusion of the admission to the registrationof a political party or a public organization became final (irrevocable);

6) the date when the Government recognized the setting up of the Chambers of Commerce and

Industry.

The end of the abstract capacity of legal person

The end of the abstract capacity of a legal person concerns the anticipated abstract capacity as well as


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the full abstract capacity. Thus, the anticipated abstract capacity ends when the full capacity is obtained

and this moment usually coincides with the moment when legal personality is granted to a legal person.

Further, the full abstract capacity ends when the subject of law (the legal person) ceases. It means that

without its full abstract capacity a legal person cannot exist.

Therefore, when a legal person begins the clearing off process, its full abstract capacity still has to exist

but it is restricted. In other words, the legal person can no longer carry on its business but it still has

rights and obligations with the view to accomplishing the clearing off process. Also, from the date when

the dissolution has decided and until the legal person is erasure from the register (either register of

trade or other kind of special register), it can unfold its activities but only in order to achieve its

patrimonial. rights and to pay its debts. This restricted abstract capacity ends on the date when the legal

person is erased from the register where it was incorporated.

We emphasize that, when a juridical act was concluded without the legal rules regarding the abstract

capacity of a legal person having been observed, the act is void, it is annulled. This sanction, the

absolute nullity of the act, occurs either if the legal person did not have its full abstract capacity to

conclude the act, or the principle .of specialization was infringed.

The concrete capacity of legal persons

The concrete capacity of a legal person is defined as being the abstract and general ability of a legal

person to obtain and to exercise subjective civil rights and to assume and to fulfill civil obligations, by

concluding on its own name civil juridical acts through its organs.

The common legal rules regarding the concrete legal capacity of a legal person are the following:

- the legal person exercises its rights and fulfills its obligations through its management organs;

- the juridical acts concluded by the organs of the legal person within the limits of the powers conferred

to them, are the acts of the legal person itself;

- the lawful or unlawful facts committed by the organs of a legal person within the exercise of their

functions obliged the legal person itself;the natural person acting on behalf of a legal person is

personally ~ responsible before it and before the third party as well if they commit an unlawful fact;

- the relationships between the legal person and those who form its organs are submitted to the

mandates rules if law, the setting up deed or the statute does not provide for otherwise.

From these legal provisions we should understand that, as an abstract legal construction, a legal person

expresses its will through its management organs.

Between the legal person and its management organs there is the so-called legal representation. It

means that the director, the general manager, or the president represents the legal person within the

relationships with third parties. This kind of representation is not the same with that settled by civil

code. In fact, this representation is only similar due to the fact that it does not represent a real mandate.


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Sometimes, the management organs of a legal person can mandate a natural person, such as its legal

advisor, to represent it in front of the court of law, or within other relationships with third parties. In this

case, without any doubts there is a contractual representation.

As far as the management organs are concerned, they can have either unipersonal form, such as the

minister, the president, the director or the rector, or a collective form, such as council, committee,board of directors, etc. No matter the form of the management organs is, according to their

competencies, they exercise the rights and assume the obligations of the legal person by participating

within juridical relationships. .

The beginning of the concrete capacity of legal person

Due to the absence of legal provisions, the juridical doctrine has expressed several opinions regarding

this issue. Thus: it is considered that the legal person obtains its concrete capacity at the same time with

its abstract capacity, or on the date when its management organs are appointed.

The common opinion is that the legal person obtains its concrete capacity on the date of its setting up.This moment, as it was mentioned above, can be even before its incorporation or registration, or before

the recognition/authorization act has been issued or other legal requirements have been fulfilled.

Therefore, besides the anticipated abstract capacity, the legal person has an anticipated concrete

capacity from the moment of its setting up and with the view to its valid setting up.

The end of the concrete capacity

The concrete capacity of a legal person ends when the existence of the legal person ends.

It can also end in case the legal person is reorganized. It means that the legal person is subject of a

fusion or of a merger by absorption or of a total division.

Business Law_Course 3_The Subjects of Business Law

OCT - 20 - 2013

The Professionals

Legal basis: art. 3 Civil code :

1) The provisions of the Code apply to both relations between professional and those between

professionals and other subjects of civil law

2) Are considered professionals all those managing an enterprise.

The new civil code has erased the term merchant and it has introduced a new one: professional which

includes all persons licensed to perform economic activities.

Art. 8 from law no. 71/2011 (the law issued for the entering into force of the Civil code) stipulates the


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professional includes all types of merchants, enterprises, commercial agents and any other persons

authorized to exercise economic or professional activities.

The new Civil code presents the professional as the one managing an enterprise, the activity of this

enterprise being an systematic exercise for producing, administrating or selling goods, services.

Classification of professionals

For the moment, the doctrine hasnt presented a clear classification of professionals, but, the provisions

of the Civil code and the law no 71/2011 help us issue one:

a) Merchants: commercial companies, individual merchants, co-operative organizations, economic

interests groups, state institutions, etc

b) Liberal professions: attorneys, doctors,

c) Foundations, Associations, Unions

d) Public institutions

Conditions:

a)The legal capacity

Can be defined as being the natural persons abstract and general ability to have rights and obligations

and to exercise their rights and to assume their obligations by concluding juridical acts on their own

name.

The legal capacity deals with two issues:

a) The abstract capacitythe persons ability to have rights and obligations (granted to each human

being from the moment of birth or, by exception, from the moment of his conception)

b) The concrete capacitythe persons capacity to exercise their rights or to assume their obligations by

concluding on their own name juridical acts (granted at the age of 18 years old and a restrained capacity

from 14 or 16 years old)

Incapacities

Do not have legal capacity:

- underage persons

Full capacity from 18 years old and special cases:

a) married person after 16 years old (art. 39 Civil code)


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b) by court decision (art. 40 Civil code)

c) member of family enterprise (art. 8 oug 44/2008)

Incompatibilities

The business law activity is incompatible, because its speculative character, with certain positions and

professions like: deputies, senators, public persecutors, judges, officers, public servants / attorneys,

doctors;

Declines

The business legal system has to respect the legal provisions regarding the public order.

According to Law nr.12/1990, Criminal Code, Law nr.26/1990 and Law nr. 31/1990, a person who was

convicted of a criminal act incompatible with the commercial activity (like: theft; taking/offering bribe),

cannot be a merchant.

Interdictions

In order to protect general interests, economical, social or moral ones, some activities cannot be done

by private persons, but only by the state (for example: fabrication and commercialization of guns, drugs,

narcotics with other purpose than medicine)

Interdictions (legal or conventional)

Are due to legal interdictions or the parties will

- Legal incapacitiesrelated to public monopoly domains (e.g. mine exploitation) or to public order

requests (existence of a labor permite.g. foreigners)

- Conventional incapacities (general/special):

- continuation of trade in case of selling the stock trade (good will)

- exclusive distributor

- franchisee position

b) Name and risk

Name = firm(according to Law no.26/1990)

Exception = permanent commercial agent is merchant according to art.1 par.5 Law no.509/2002.

Permanent commercial agent is a natural or legal person who acts as independent intermediary and is

entitled constantly


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- to negotiate business for other natural or legal person

- to conclude business operations on the name and on behalf of the principal

Note: It carries on its intermediation acts as principal or accessory acts in exchange of a remuneration =>

he carries on trade activity as a profession

Auxiliary of trade are not merchants (perform commercial acts/facts on the name of their employer):

pre-posed agent (prepus)

shop vendor (vnztor)

delegate

commercial traveler (comis-voiajor)

Risk = unlimited liability => debtor of all its commercial obligations> commercial creditors (as simple

creditors) have as warranty the merchants entire present or future fortune (patrimony)

The merchant has to reduce the risk which is objective => clauses for modification /adaptation of

parties obligations

c) Profitability of the activity

Finis mercatorum est lucrum = the activity has to be completed with a certain gain necessary to cover

the needs of his own existence and of his family, the activity has a speculative character => non-profit

activities are excluded

Important is the intention to obtain profit and not the obtainment itself

It has no relevance if the activity is his only source of revenue or not

d) merchants authorization and registration

The authorization and registration in Register of Trade is imposed by art.1 of law 26/1990 for:

individual merchants, individual enterprises, family enterprises,

commercial companies;

cooperative organizations;

cooperative companies

state companies and national companies

economic interest groups


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european companies

european cooperative companies

european interest groups

Authorization is an administrative act issued by the Register of Trade

Professional knowledge or practice can be proved with the following documents:

college or university diploma or certificate of graduation, certificate of professional competences, labor

book that proves at least 2 years of work within the activity for which the authorization is requested.

Art.1 para.1 of Law no.26/1990 modified and republished and art.16 of Law no 300/2004: the

merchants have the obligation to request the registration within the Register of Trade, before the

beginning of their activity or during it, or at the end of it, and to request the registration within the same

register of all mentions regarding acts or facts that are submitted to registration by law

The professional obligations of merchants

These professional obligations of merchants are provided by the law in order to protect the public

interests, as well as the interests of third parties and merchants themselves. Thus, the merchants are

obliged to accomplish certain formalities of publicity within the Register of Trade, to keep specific books

and to organize and manage their own accounting activity.

1. The obligation to keep specific books

It is provided by the Commercial Code, articles 22-24 and the Law no. 82/1991 on the accounting

system, republished, amended and completed. Thus, the merchant is bound to keep the following

books:

- Journal ledger, where all economical and juridical operations of the merchant are recorded daily;

- Inventory ledger, where all movable and immovable goods of the merchant are recorded, on the basis

of a yearly inventory.

- General ledger, which serves as a summary of the journal ledger.

2. The obligation to organize and manage his own accounting activity which refers mainly to the yearly

financial statements, accounting books, inventories and so on.

3. The obligation of registration within the Register of Trade

The publicity within the Register of Trade is regulated by Law no. 26/1990 republished.

Thus, before starting their business, the merchants are bound to ask for the incorporation in the

Register of Trade. During the performance of their commercial activities, the merchants are also obliged


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to ask for the registration in the same register of certain mentions concerning acts and facts that are

subject to publicity, as follows:

- juridical acts such as sale, donation concerning the goodwill;

- any act certifying changes to the records in the Register of Trade;

- information concerning the legal representative of the merchant;

- patents, trade marks, firm, emblem and other distinctive signs upon which the merchant has any right;

- the insolvency procedure and so on.

The Register of Trade is kept by the Office of the Register of Trade organized in each county and in

Bucharest. The Central Register of Trade is kept by the National Office of the Register of Trade, which is

a public institution subordinated to the Ministry of Justice.

The Register of Trade is public and thus, any interested person may have access to all its records.

The Register of Trade consists of a register for recording individuals and family partnerships and another

one for recording legal persons.

The merchants must apply for incorporation to the Office of the Register of Trade organized in the

county where they have their headquarters.

The registration in the Register of Trade is done on the basis of a decision provided by the judge

delegate.

The incorporation and the mentions registered within the Register of Trade have a publicity function, in

order to be opposable to third parties. It means the law considers that all records in the Register of

Trade are known by third parties form the date of their registration.

The merchants must apply for the incorporation in the Register of Trade within 15 days:

- form the date of the authorization, in the case of individual merchants;

- form the date of conclusion of the constitutive act, in the case of commercial companies.

According to article 22 form the Law no. 26/1990 republished, the obligation of merchants to ask for the

registration of mentions in the Register of Trade is due within 15 days from the date of the acts or facts

that are subject to publicity.

As far as the merchant natural person is concerned, the incorporation in the Register of Trade does not

produce constitutive effects in order to obtain the quality of merchant. As we mentioned before, the

natural person becomes a merchant by performing commercial facts, under the conditions provided in

the Commercial Code.

However, concerning the commercial companies, by the incorporation in the Register of Trade they get


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the legal personality, meaning they become legal persons.

Business Law_Course 4_The Stock-trade

OCT - 25 - 2013

In common law legal systems, the good will is an intangible asset that normally represents the excess

of the value of the business over the value of its tangible assets established reputation of a business

regarded as a quantifiable asset

In legal systems of French inspiration (Romanian), the good will is more than the merchants

reputation, it is a totality of different elements which together are used by the merchant with the view

to carry on his business

The performance of commercial activity requests the existence and the use of goods such as buildings,

merchandise, industrial equipment, raw materials, patents and so on. All these goods used for the

accomplishment of commercial activity represent the goodwill of a merchant.

The Civil code does not provide either a definition of the goodwill or legal provisions for its regulation.

The legislator had used the term goodwill, without explaining it, within several normative acts, such as

the Law no. 26/1990 on the Register of Trade, republished.

However, there is a definition of the term goodwill provided by the Law no. 298/2001 concerning the

amendment of the Law no. 11/1991 on the unfair competition. Thus, according to article 11 point c form

the law, the goodwill represents the ensemble of movable and immovable, tangible and intangible

(trade marks, firms, emblems, patents, the place of business and so on) used by a merchant in order to

perform its activity.

The Definition

Thus, the goodwill is an ensemble of movable and immovable, tangible and intangible goods used by a

merchant in his commercial activity, in order to get clients and to obtain profits.

The Distinction between Goodwill and other close notions

a) Goodwill and Patrimony. Unlike the goodwill, which is an ensemble of goods, the patrimony contains

all patrimonial rights and obligations of the merchant.

b) Goodwill and Enterprise. As we mentioned before, the enterprise is an independent organized activitywhich combines elements like capital, labor or nature for the purpose of producing goods and services

and of obtaining profit. The goodwill is an ensemble of goods used for the accomplishment of

commercial activities. Thus, we may see from these definitions that, beside goods, the enterprise also

combines other elements like capital or labor. As a consequence, the goodwill is only a part of the

enterprise.


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The legal nature of the goodwill

Legal doctrine considers it as de facto universality and not a legal universality as the patrimony is.

In the juridical doctrine, most authors consider that the goodwill constitute an ownership right over an

intangible thing, as the copyright.

As a consequence, the features of the goodwill are the following:

1. it is an unitary thing, different from the goods that compose it. Thus, the goodwill can be the object of

juridical acts such as the sale-purchase or the donation.

2. it is a movable thing because in its composition the movable goods prevail.

3. it is an intangible movable thing because in its composition the intangible goods have the highest

value.

4. It can be object of pledged

5. It is a part of the patrimony of the merchant, not the patrimony itself.

6. It lasts as long as it is exploited (used), so its existence is less stable than of other intangible goods

The assignment contract (contract de cesiune), is the agreement concluded between the assignor

(cedent) and the assignee (cesionar) with the view to transfer to the assignee the rights that belong

to the assignor

The elements of the goodwill

Because the goodwill contains those goods that are necessary for the performance of a specific

commercial activity by a specific merchant, its composition is different from one merchant to another, it

depends upon the specificity of the merchants activity.

In the same time, the elements that compose the goodwill may change, in accordance with the needs of

the trade, but the goodwill as a whole continues to exist.

Generally, regardless of the specificity of commercial activity, we consider that the goodwill contains

two categories of goods:

1. tangible goods

2. intangible goods

1.The tangible elements of the goodwill

They are included within this category:


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a. immovable goods, such as buildings, real estate and so on.

b. movable goods, such as raw materials used for the production of other goods and products or

merchandise which are the result of commercial activity.

2.The intangible elements of the goodwill

They are included within this category: the firm, the emblem, the clients, the place of business, the

patents, the trade marks and so on.

1) The Firm

It is an element of identification, a name, registered in the Register of Trade, used by the merchant to

identify his business. (article 30 Law 26/1990).

Natural personsthe firm is composed by the name (full name or only the family name with the first

letter of the second name) and, sometimes, with a phrase representing the object of activity.

Commercial Companiesthe firm has different forms, depends on the type of company we discus

about.

Characteristics:

- each new firm has to be different than the others already in use

- the name must be avaible, so we have to check at the Register office (Registrul Unic), but an erased

name can be taken after 2 years it has been erased.

- the firm must not include a denomination, name, used by public institutions;

- it can be transmitted through acts intervivos/ mortis causa only together with the goodwill.

- protection by:

- incorporation and no matter if it is used or not

- action in counterfeit (contraf

Acounting Introduction

Documents

Transcript of Acounting Introduction