About Sole Proprietorships

The establishment and authorization of a sole proprietorship (întreprindere individuală) are regulated by Emergency Government Ordinance No. 44 of 2008, alongside two other business forms: authorized natural persons (PFA) and family businesses.

Similar to authorized natural persons, any type of economic activity can be carried out under this form, except for liberal professions and activities regulated by special laws that require other mandatory business forms.

A sole proprietorship does not have legal personality, but its owner gains merchant status once it is registered in the Trade Register.

The founder must be an individual who:

  • Has full legal capacity (is at least 18 years old),
  • Has not committed acts punishable under financial, accounting, customs, or tax laws,
  • Has a registered office,
  • Declares on their own responsibility that they comply with health, veterinary, environmental, and occupational safety regulations,
  • Has qualifications or professional experience if required by law for the type of economic activity they wish to conduct.

The first step is to check and reserve the business name with the Trade Register that has jurisdiction over the location of the registered office.

The registration application must include a copy of the applicant’s ID card or passport, the name reservation document, a specimen signature, and documents proving compliance with the aforementioned requirements. Within 3 days of submission, the Trade Register will order the registration of the sole proprietorship and authorize its operation, issuing the relevant registration certificate.

Legal provisions that came into effect on January 17, 2017, limit the number of activity codes, allowing a sole proprietorship to conduct up to 10 types of economic activities listed under CAEN codes and employ up to 8 workers.

A sole proprietorship can enter into contracts with any individual or legal entity, other sole proprietors, family businesses, or authorized natural persons. The owner can also be employed as a worker under a separate employment contract.

Like other simplified business forms, a sole proprietorship keeps simplified accounts and is subject to a 16% tax on net income, along with social security and health insurance contributions. The owner has unlimited liability, meaning they are responsible for claims and damages not only with the business assets but also with their personal property.

In the event of the owner’s death, the business can continue to operate if the heirs declare their intention to do so in a notarized statement within 6 months of the completion of the probate process. If there are multiple heirs, they may appoint a representative, and the business may continue as a family business.

Law No. 1 of 2017 abolished the fees for registering sole proprietorships, so the procedure is currently free of charge!