In Romania, family-run businesses form the backbone of many local economies. Yet when it comes to planning for what happens after the founder steps away, too many companies put off the conversation. Whether due to discomfort, uncertainty, or lack of time, business succession planning is often delayed until it becomes urgent, sometimes even too late.
Transferring ownership and leadership within a family company isn’t just a technical process. It involves emotions, long-term vision, and legal foresight. Without a plan, even well-established businesses can fall into internal conflict or struggle to maintain momentum. That’s why thinking ahead -well before retirement or unexpected events- is crucial for ensuring continuity.
Transferring shares: donation, sale, or step-by-step business succession
In practical terms, most business succession in Romania involves passing on shares. This can happen through a straightforward donation, a sale, or sometimes through a hybrid process. Founders may choose to gradually transfer equity over time to a child or trusted successor, allowing for a smoother transition while they remain involved in day-to-day operations.
Romanian law requires certain formalities to make share transfers legally binding. For example, in SRLs (limited liability companies), all ownership changes need to be updated in the company’s Articles of Association and registered with the Trade Registry. In companies structured as SAs (joint-stock companies), the rules can be stricter—pre-emptive rights may apply, and the transfer of shares may need to comply with conditions set in the company’s statute.
These are not just formal steps. Without proper legal documentation, a transfer could be challenged by other shareholders or heirs, leading to disputes that can destabilise the business.
Business succession clauses and internal governance
Beyond ownership, it’s equally important to address who will run the business, and how. Good governance during a leadership transition can make or break the next phase of a family company.
Many businesses update their corporate documents to include succession clauses. These clauses can specify who takes over in case of death, incapacity, or voluntary exit. They may also establish clear voting rights or create advisory boards to support the successor.
Governance planning should reflect the reality of the business: Is the next generation prepared to lead? Are there multiple heirs involved? Do they all want a role in management? A mismatch between ownership and management often causes friction. Legal tools can help separate these roles, or define them more precisely, to avoid confusion.
The role of inheritance law and estate planning
Even when shares are transferred during the founder’s lifetime, Romanian inheritance law still plays a role. Under the Civil Code, close relatives like spouses and children have a legal right to a share of the estate, regardless of what a will might say. This is called the “forced heirship” rule.
For business owners, this can create unexpected challenges. If the business is the main asset, how can it be passed intact to a single child who’s active in the company, without being divided among all heirs? Careful planning is needed. A will alone might not be enough; it should be supported by earlier transfers, shareholder agreements, or even buy-sell clauses that allow certain heirs to sell their interest back to the company or to another family member.
Holding companies and international structures
More established family businesses are starting to explore other options. One of them is setting up a Romanian holding company to manage all family-owned assets. This structure can offer more control, especially when there are multiple lines of business or properties involved.
Others look abroad. While Romania doesn’t have its own trust regime, families can still make use of international trust structures, provided they meet Romanian tax and legal requirements. These tools are especially relevant for families with multinational assets, or for those considering succession across generations and jurisdictions.
Planning succession is protecting your company’s future
Putting off a succession plan might feel easier in the short term, but it comes at a cost. Without a roadmap, even a successful business can quickly run into legal uncertainty, strained family dynamics, or loss of value.
Succession is not just about who inherits shares. It’s about how a company continues to grow, protect jobs, and retain the founder’s vision across generations. The right legal tools -adapted to the company’s size, structure, and family needs- can make this transition a smooth and positive one.
In Romania, as in many countries, the law offers multiple instruments to make this possible. But it’s up to business owners to start the conversation and seek the legal advice that will help them turn intention into action.