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Is Incorpo.ro Legal?

We believe in transparency and letting our customers know about our framework, and how working with us works.

In this post, we will discuss the legality of our work, our justification for it, and the limitations and solutions we've found to ensure Incorpo.ro functions as intended.

Preface

This page aimed to inform users, lawyers, partners, and government entities about what Incorpo.ro does and how it adheres to legal requirements.

Automatizing work that lawyers also do has always been seen with skepticism and reasonably so.

As such, our article will explain how we ensure our platform complies with the laws, and ensures it doesn't provide any legal assistance that would otherwise be forbidden.

Our approach to business registration

1: We sell you a template

    • Our templates are sold in a manner similar to contract books available in libraries such as Editura Hamangiu, C.H. Beck, and Universul Juridic.
    • These are standard-form contracts; they are not customized but are instead general-purpose legal documents prepared by legal experts.
    • This method offers reliable and legally compliant documents for standard business setups.

What's Included in These Templates?

  • The templates are comprehensive, adhering to Law 31/1990 and Law 255/2022.
  • They include necessary forms for business registration and shareholder agreements.
  • Proiectat pentru a acoperi toate bazele legale pentru înființarea unei companii.

2: Personalizing Your Documents

    • Our system uses your details from the onboarding forms to fill the templates.
    • This automation ensures accuracy and saves time by eliminating repetitive data entry.
    • It provides a personalized touch to standard templates, making them specific to your business needs.

Unlike a lawyer, we don't do it for you - you self-serve through our web app, using our AI assistant, Alexandra, and the guides we prepared for you.

3: Signături Electronice

    • We offer digital signing through a partnership with a certified electronic signature provider.
    • These electronic signatures carry the same legal validity as traditional hand-written signatures and allow you to continue self-serving without a lawyer needing to attest your identity.
    • This feature is particularly useful for remote or overseas clients, enabling them to complete processes from anywhere.

When hiring a lawyer, you'd have to have an additional contract to allow them to represent you and certify your identity. This often takes a lot of time, needs to be done manually, and in general, requires more KYC procedures if we still want to sign electronically.

So, our procedure makes sure you can get your documents signed fast, digitally, and without a lawyer involved.

3: Submitting Your Documents

    • Once signed, your documents are automatically sent to the Registry of Commerce via an email you will be assigned and will own.
    • Our AI system manages responses from the Registry, ensuring smooth communication.

      You will always have simultaneous access to view communications with the registry alongside our app.
    • This step streamlines the submission process, making it efficient and hassle-free.

4: When You Need a Lawyer

    • In cases requiring direct legal representation, we connect you with a qualified lawyer registered with UNBR.
    • While we are not allowed to help counsel you in contentious cases (Cases in court) or consultancy veering outside of business-related themes (legal assistance), lawyers are.
    • So we will assume that we will pay for one for you if necessary, and you will sign a contract with them to ensure that you and the lawyer know each other and, if necessary, you can give up Incorpo.ro as a partner.

      The customer-lawyer relationship is respected.

Why did we choose this approach?

Normally, it would've been more ideal if we didn't have to customize our platform to ensure compliance through these extra hoops.

Having the platform be owned by a law firm, or being allowed to provide assistance with legal registration ourselves, without an AI being provided instead, would've been ideal.

However, Romanian law is ambiguous on this matter, and there are several compelling reasons why this may not be possible:

We do things lawyers aren't allowed to do:

We offer services that go beyond the scope of what a lawyer is permitted to do. With our tool packages, we provide technical assistance, and we also offer business consulting and economic advisory services.

This is something that lawyers aren't allowed to so, and as such, they can't own this platform.

Art. 29, Lawyer Statue

(1) The following are incompatible with the practice of the law profession, unless otherwise provided by special laws:

    a) personal acts of commerce conducted with or without authorization;

    b) the status of a partner in a general partnership, a limited partner in a simple limited partnership or in a partnership limited by shares;

    c) the status of a manager in a partnership limited by shares;

    d) the status of a sole administrator or, in the case of multiple administrators, that of an administrator with full powers of representation and management, president of the board of directors, or a member of the management committee of a limited liability company;

    e) the status of president of the board of directors or of the supervisory board, or a member of the management committee or the directorate of a joint-stock company.

[...]

(5) Violation by a lawyer of the provisions of paragraph (4) constitutes a serious disciplinary offense.

The problem arises here:

  • Paragraph 1(a): It mentions that personal acts of commerce conducted with or without authorization are incompatible with the practice of the law profession.

    Since providing technical assistance and business consultancy often involve commercial activities, they fall under this prohibition.
  • Paragraph 1(d) and (e): These clauses restrict a lawyer from holding certain managerial positions in limited liability companies and joint-stock companies.

    This implies that owning or managing a business platform that offers non-legal services would be incompatible with their role as a lawyer.

General Interpretation:

The essence of these clauses is to prevent conflicts of interest and maintain the integrity and focus of the legal profession.

Engaging in business activities, especially in fields unrelated to law, could compromise these principles.

Therefore, a lawyer owning a platform that provides technical and business consultancy services would likely be seen as incompatible with the dignified practice of law, as it diverts from the core legal profession and ventures into commercial and advisory realms.

We can't share our lawyers to work for you through us:

Another good idea would've been to share a lawyer, so you wouldn't have to sign a contract with a lawyer yourself, and waste more time with KYC procedures to get a qualified signature.

However, this isn't allowed, as even sending an email would've been a form of power of attorney, although limited. OUR servers would be required to send the emails on your behalf, analogue to how Gmail works.

Art. 411, Lawyer Statue

(1) It is prohibited for a lawyer in the exercise of any activity mentioned in Art. 3 of the Law to collaborate in any way with physical or legal persons who perform acts or carry out activities specific to the legal profession without the right to do so.

(1^1) It is prohibited for a lawyer in the exercise of any activity mentioned in Art. 3 of the Law to conclude legal assistance contracts with legal entities that act as agents for other physical or legal persons who are beneficiaries of the professional activities of the lawyer.

(2) Violation of the provisions of paragraphs (1) and (11) constitutes a disciplinary offense and is sanctioned with exclusion from the profession.

The problems arise here:

  • Paragraph 1: This clause prohibits lawyers from collaborating with any individuals or entities engaging in activities specific to the legal profession without the proper authorization.

    Therefore, the idea of sharing a lawyer through a platform, which might involve unauthorized entities managing legal communications or services, would contravene this rule.
  • Paragraph 1^1: It specifically prohibits lawyers from entering into legal assistance contracts with legal entities that act as intermediaries or agents for other individuals or entities who are the actual beneficiaries of the lawyer's services.

    In the context of Incorpo.ro, using a platform to share a lawyer may be seen as forming a contractual relationship with a multi-agent entity (the platform), which is explicitly prohibited.
  • Regarding Email Communication: The restriction on collaboration with unauthorized entities extends to any form of power of attorney, agency or intermediation.

    If our platform (analogous to Gmail in this context) were to facilitate communication via email (by sending an email from an account we create), it could be perceived as an unauthorized entity engaging in legal-specific activities.

    This could be interpreted as a restricted form of power of attorney, which is not allowed according to these regulations.

General interpretation

While these regulations were intended to prevent the breach of confidentiality and ensure customers can connect directly with the lawyer, without a third party involved, the wording disallows any form of collaboration.

Lawyers aren't allowed to provide price transparency or a good deal

Even if our platform would do strictly business registration, we'd be able to only work based on a quotation, and wouldn't be allowed to practice standard prices, and be price transparent.

^15 Code of Ethics of the Romanian Lawyer: Art. 20 par. 3-4.
A lawyer's communications on online platforms must not contain^16:
^16 Code of Ethics of the Romanian Lawyer: Art. 20 par. 6.
- the fees charged in relation to clients. Announcing hourly rates is allowed, provided that these are the same for all clients;
- false or potentially misleading statements that cannot be verified regarding the results obtained, the identity of the clients, the number of cases, turnover, or the success rate;
- comparative and/or derogatory remarks;
- communications that assure clients or potential clients of a guaranteed outcome;
- references to functions or activities unrelated to the practice of the law profession, as well as any reference to potential results that could be generated by judicial roles or within other public authorities.
In promoting their services, a lawyer may not use the notoriety of their client.
A lawyer must refrain from any form of advertising that damages the image of the legal profession.
Lawyers may not accept their profiling for the marketing purposes of the platform.
Article 176, Lawyer Statue

(1) The following forms of unfair competition are prohibited:
    a) Poaching of personnel, i.e., aggressive job offers to associate lawyers, collaborators, or salaried employees, or other key employees of a competitor;
    b) Client poaching, personally or through others;
    c) Disclosure, acquisition, or use of confidential information by a lawyer or by their collaborators or employees, without the consent of the legitimate holder and in a manner contrary to honest practices;
    d) Entering into contracts by which a lawyer provides their services to a client advantageously, either to compete with other lawyers through reduced prices, or to induce the client to recruit other clients for the said lawyer;
    e) Public communication or dissemination by a lawyer of statements about their firm or its activities, intended to mislead and create a favorable situation for themselves at the expense of competitors;
    f) Communication, even if done confidentially, or dissemination by a lawyer of false statements about a competitor or their services, statements that could harm the smooth running of the competing lawyer's activity;
    g) Offering, promising, or granting, directly or indirectly, gifts or other advantages to the associate, collaborator, or employee of a lawyer in order for them to divulge confidential information or work procedures, to know or use the clientele of the competitor, or to obtain other benefits for themselves or another person to the detriment of a competitor;
    h) Diverting a lawyer's clientele by using connections established with this clientele in a previous position held with that lawyer;
    i) Dismissal or attraction of associates, collaborators, or employees of a lawyer for the purpose of establishing a competing entity to capture the clients of that lawyer, or hiring associates, collaborators, or employees of a lawyer with the aim of disrupting their activities.

(2) The commission of any acts of unfair competition listed in paragraph (1), as well as the concurrent commission of several such acts, constitutes a serious disciplinary offense for all participating lawyers.

The problems arise here:

  • Paragraph 1(d): This clause is particularly relevant as it prohibits lawyers from entering into contracts that offer their services advantageously to compete with other lawyers through reduced prices or to induce clients to recruit other clients for them.

    This directly impacts the ability of a platform to offer standardized, transparent pricing for legal services, such as business registration.

    The clause implies that providing legal services at a reduced or competitive price in a way that disrupts the standard pricing practices of the legal profession is considered unfair competition.
  • Fees Charged and Hourly Rates (First Point): The restriction on disclosing fees except for uniform hourly rates can limit a platform's ability to provide detailed pricing information.

    Platforms like Incorpo.ro, which might want to offer transparent, fixed, or variable pricing models for legal services, could face challenges in complying with this rule while providing clear cost information to potential clients.
  • Guarantee of Outcome (Fourth Point): A platform cannot assure clients of guaranteed legal outcomes.

    We offer a guarantee of successful registration or your money back. If you were to work with a lawyer, you typically wouldn't be able to request a refund if the registration process failed.

General Interpretation

The usual price for business registration for foreigners, or entrepreneurs through digital means, are significantly over the prices that we practice.

As such, even if the platform was managed by a Lawyer, it would mean we need to increase prices significantly so as not to get penalized for our reduced pricing.

We wouldn't be able to guarantee your money back or services, even if we want to and we deem our success rate good enough.

In addition, we wouldn't be able to publish any non-hourly pricing.

How our platform works

Am pregătit o reprezentare grafică a modului în care funcționează colaborarea cu Incorpo.ro, pentru a sublinia faptul că ne asigurăm că sistemul nostru este legal și corect.

Relevant documents, case law, etc:

Punctul de vedere al UNBR și comunicarea dintre incorpo.ro și UNBR

Florida Law System (United States)

Generally speaking, a nonlawyer may sell legal forms and kits and complete them with information provided in writing by the customer. Florida Bar v. Brumbaugh, 355 So. 2d 1186 (Fla. 1978).

If the nonlawyer is using a Supreme Court Approved form, the nonlawyer may engage in limited oral communication to elicit the factual information that goes in the blanks of the form. Rule 10-2.1(a), Rules Regulating The Florida Bar.

Generally speaking, it does not constitute the unlicensed practice of law for a nonlawyer to sell a book that contains general legal information. New York County Lawyers Association v. Dacey, 287 N.Y.S. 2d 422 (N.Y. 1967);

The book may also contain legal forms.

A nonlawyer may conduct a seminar at which general legal information is given, however, the nonlawyer may not give specific legal advice.

The Florida Bar v. Raymond, James and Associates, Inc., 215 So. 2d 613 (Fla. 1968).

Therefore, while the nonlawyer may give general information, the nonlawyer may not answer specific legal questions.

California Law System

Allowing outside-of-court "advice"

The Court finds that a preliminary injunction is justified. Plaintiffs' program cannot be subject to the UPL rules because the First Amendment safeguards their legal counsel as a form of expression, and these rules do not pass strict scrutiny as they are not narrowly tailored for this scenario.

Further, the balance of equities favors an injunction because Plaintiffs’ program would help alleviate an avalanche of unanswered debt collection cases, while mitigating the risk of consumer or ethical harm.

And enjoining enforcement against Plaintiffs alone, whose activities are carefully limited to out-of-court advice, will not threaten the overall regulatory exclusivity of the legal profession.