Loan agreement signed by the owner personally and on behalf of the society

The High Court of Cassation and Justice has ruled that, in accordance with Law no. 31/1990, the right to represent limited liability company belongs to each administrator, unless otherwise provided in the articles of incorporation, which means that every administrator exercises both asset management and representation, being able to conclude on behalf of the society any legal documents with the legal effect of engaging in relations with third parties. In this case, the defendant argued that, by signing and stamping the contract, he did not intend to bind the corporation legally, and without the consent of the second manager and a decision of the general meeting of shareholders to approve contracting the loan, the signing of the loan on behalf of the corporation is not valid. The High Court held that since the act of incorporation provides that the powers expressly and explicitly linked to the company’s management will be met by the two directors appointed by the associates, with full powers and for an unlimited period and therefore, the society is legally bound in solidarity with the administrator as an individual to return the loan. (Decision no. 3551 of October 25, 2013 passed in Appeal Civil Division II of the High Court of Cassation and Justice covering loan repayment)

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Dan Alexandru NEGRU

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