CHOOSING THE RIGHT FORM OF LICENSING A BUSINESS IN ROMANIA

Abstract

Choosing the most appropriate form of licensing a business is an important decision not easy to be made by an entrepreneur and it should be taken only after he has the required skills and abilities to do so. The business idea should harmonize with the business environment and its future trends, with the existing opportunities and the future products or services that the company will provide and not least the entrepreneur has to make sure that he has sufficient resources to get started. We consider that every business has a number of features that make certain forms of licensing to be more suitable than others. This paper aims to present a multitude of items to be reviewed by an entrepreneur at the start-up in order to choose the most appropriate licensing type for his business. Given that our country's law allows entrepreneurs to license their businesses in several forms, the decision to choose between many existing possibilities is a very important one for the future good of the business. Currently in our country there are two major laws governing the licensing of a business. The first one is the republished and subsequently amended Company Law number 31/1990 and the second, the Government Emergency Ordinance number 44/2008 regarding the economic activities of the Sole traders, Individual enterprises and Family enterprises. The Company Law number 31/1990 allows companies to choose between one of the five types of business entities that can operate in Romania: General partnership (in Romanian SNC), Limited partnership (in Romanian SCS), Limited partnerships by shares (in Romanian SCA), Joint stock company (in Romanian S.A.) and Limited liability company (in Romanian S.R.L.). GEO number 44/2008 on economic activities of the Sole traders, Individual enterprises and Family enterprises regulates the licensing and the activity of a Sole traders, Individual enterprises and Family enterprises.

Keywords

• business licensing, types of business entities, Sole traders, Individual enterprises, Family enterprises