When Romanian entrepreneurs think about dividends, they usually picture a straight, proportional split based on each shareholder’s capital contribution. It’s the default, the standard, the easy path.
Yet, Romanian Company Law no. 31/1990 contains a powerful but underused option: asymmetrical dividends—the ability to distribute profits in a different proportion than the share capital is held.
This is not a loophole but a deliberate statutory right of shareholders. The mechanism, however, is guarded by strict conditions: it is only valid if explicitly permitted by the company's Articles of Association (AoA) and adopted by the unanimous consent of all shareholders.
When implementedcorrectly, it is a governance tool for rewarding real contribution and attracting capital. When mishandled, it becomes a dangerous tax and litigation trap.
The Legal Foundation: Beyond Proportionality
The legal framework is built on a simple principle: the shareholders' unanimous will, when formally expressed, can override the default rules.
- The default rule: By default, Article 67(2) of Law 31/1990 states that dividends are paid to shareholders proportionally to their stake in the company's share capital.
- The exception: The same article provides the key: "...unless the Articles of Association provide otherwise." This phrase empowers shareholders to design their own distribution model.
- The two golden rules: To activate this exception, two non-negotiable conditions must be met:
- A clause in the AoA: The possibility of a non-proportional dividend split must be embedded in the company's bylaws
- Unanimous shareholder approval: Any decision to apply this asymmetrical split requires a unanimous vote in the General Meeting of Shareholders (GMS). This protects minority shareholders from being unfairly disadvantaged by a majority vote.
- Irrevocable decision: Once the GMS has validly voted to distribute dividends, that decision stands as a firm obligation of the company.
Strategic Applications: Why Bother with the Complexity?
Implementing asymmetrical dividends requires effort, so the strategic payoff must be clear. Here are the most common and powerful use cases:
- Reward real contribution: In startups, professional service firms, or tech companies, a shareholder’s value often transcends their capital. A key founder, a CTO with critical know-how, or a partner who brings in major clients contributes far more than their shares suggest. Asymmetrical dividends can remunerate this "sweat equity" without altering the ownership structure (which sometimes creates unnecessary complications related to voting rights, creditors approvals etc.).
- Balance family business dynamics: It is common for one branch of a family to be actively managing the company day-to-day, while another is composed of purely passive, inherited shareholdings. Asymmetrical dividends can ensure the active members are compensated for their labor and risk before profits are distributed proportionally to all.
- Attract strategic capital with preference shares: A company can create different classes of shares. For instance, it can issue preference shares (acțiuni preferențiale) that offer a fixed or priority dividend but carry no voting rights. This is an excellent tool to raise capital from investors who seek predictable returns without wanting involvement in the company's management.
The Fiscal Minefield
The primary risk lies not in corporate law but in tax law. The Romanian tax authority (ANAF) operates under the "substance over form" principle, enshrined in Article 11 of the Fiscal Code. They will look past the legal label of "dividend" to analyze the economic reality of the payment.
If a disproportionate dividend paid to a shareholder-manager appears to be a substitute for a salary, ANAF can re-qualify it as salary income.
Drafting & Dispute Prevention: From Theory to Practice
A vaguely worded clause inserted in the AoA like "The General Meeting may decide to distribute dividends non-proportionally" is an invitation for future disputes and tax challenges. Precision is your best defense.
Example of a Strong Clause:
"In recognition of Shareholder X’s fundamental and ongoing contribution to the company's proprietary software development, they shall be entitled to a priority dividend equal to 15% of the annual net profit, capped at EUR 50,000 per fiscal year. This amount will be paid before any other profit distributions. The remaining distributable profit shall be allocated to all shareholders, including Shareholder X, pro-rata to their participation in the share capital."
This clause works because it is specific, justified, capped, and unambiguous.
Practical Checklists:
For Majority Shareholders & Management:
- Secure unanimous sonsent: Before any action, ensure you have a clear, written consensus from every single shareholder.
- Amend the AoA first: Do not rely on verbal agreements or separate shareholder agreements. The AoA is the only document that binds the company itself.
- Get professional advice: Engage legal and tax advisors before implementation to structure the clauses and document the process correctly.
For Minority Shareholders:
- Reject vague clauses: Insist on objective, formula-based criteria for any non-proportional distribution.
- Demand caps and justifications: Ask for clear limits and a documented economic rationale for any preferential treatment.
- Monitor executive compensation: Ensure that salaries and bonuses paid to majority shareholder-managers are at a market rate and not a method to drain profits before dividends are declared.
The Bottom Line
Asymmetrical dividends are one of the most powerful strategic instruments available in Romanian corporate law. They can be a brilliant tool to reward effort, attract investors, and balance complex shareholder dynamics. However, this power comes with significant risk.
Success is founded on a precise legal drafting, unanimous shareholder agreement, and bulletproof economic / strategic justification. Without these three pillars, you risk not just punitive tax re-qualifications but also destructive and costly shareholder disputes.
In an economic environment where flexibility in governance structures can deliver a genuine competitive advantage, mechanisms for asymmetric dividend distributions are becoming essential tools for both investors and companies. At Lexters, we assist founders, investors, and businesses in designing structures that accurately reflect the parties’ contributions, risk allocation, and commercial objectives, providing legal solutions that are clear, workable, and aligned with applicable legislation. Our expertise spans the assessment of the legal basis for such mechanisms, their practical implementation, and the safeguards required to ensure transparency and long-term stability within the corporate framework.
Article provided by Irina Vasile, Partner at Lexters, and Cristina Albu Senior Associate at Lexters.
