On the fight to register INCORPORO S.R.L

Ever since we are at the inception phase of our project, one of the major drives for transforming the idea into reality was that we could use technology to reduce money spent on non-value-added tasks, bureaucracy, and time-sinks, while allowing entepreneurs to focus on doing what they do best.

With many tasks traditionally performed by lawyers and accountants not being legally restricted to these professions, and with market demands for lower costs on essential services such as business registration and accounting, we set out to create a plan that would allow us to innovate in a financially feasible way. We wanted to ensure that even if we didn't succeed, our progress could be built upon by others.

The laws are quite clear - you are legally allowed to have a platform complete forms for individualsand this does not constitute unauthorized practice of law.

As long as you don't provide legal assistance (which distinguishes itself by being catered to customers, and manually and personally individualized to them), it is fully legal to run such activities.

We were also strongly thinking of implementing elements to automate accounting, as accounting is not a value-added process for most businesses (most expert accountants DO NOT offer business financial analysis, and many times this task is better automated than banks).

Consequently, numerous entrepreneurs expend substantial sums of money on endeavors that yield no revenue for them. Thus, we scrutinized the accounting laws to ascertain the possibility of automation in this domain.

Now, as laws go, the details were also quite clear. You are allowed to do any kind of accounting, except doing financial reports, tax reporting, and directing (managing) the accounting of the company - a task reserved for expert accountants.

The Romanian Law on Accounting reserves the above activities as the sole prerogative of Romanian Accountants. but lets anyone else do all other activities, whether as an employee or a contractor.

Step 1: Registering with the Registry of Commerce

The first step to legally doing busienss as a company in Romania is what we set out to do as a business - to help individuals register companies. And so, completing our own forms, and submitting them to the registry - first issue appeared - a complaint on using NACE CODE 6920, which, in the registry's opinion at that specific point in time, was reserved only to regulated activities.

While this was not legally binding - a quick run-through would reveal this Law on Accounting This would demonstrate that the law is silent on codes, and the law pertaining to expert accountants solely applies to CECCAR, not all entities related to accounting. The functionaries at the registry didn't grasp this nuance - as economics and accounting weren't their areas of expertise - and we didn't obtain an opinion on CECCAR either.

Although they are the entity authorized by the government to self-regulate their profession, they cater to the collective interests of their members rather than serving the public. They function more akin to a syndicate than the public institution they are supposed to be.

Although not necessary nor required by law, we explained the distinction between our intended actions and their underlying reasons CAEN code This was applicable and why it wasn't a restricted activity. Our request was denied.

Step 2: Establishing a favorable precedent

As this would impact our future customers who want to run auditing as a service but are authorized by bodies in another EU member state, we took legal action to contest the decision and attempt to overturn it.

And as such, we filed a complaint to the Commercial Tribunal in Cluj-Napoca, and awaited our court date. Time in court was short - we thought the case was simple, and we just reiterated the facts and waited for the opinion of the National Statistics Institute to explain away the misconceptions that led to the wrong decision.

Time passed, and the court was ready to decide. Their decision - to deny our claims without justification - would prevent us from starting our business for 182 days.

After a lengthy wait, we received our reasoning: 152 days beyond the legal limit, or 92 days if you account for extreme circumstances.

The decision, very short in arguments, reiterated the same phrases that the registrator did, and didn't explain them, justify them, nor add any arguments except now claiming that the activites we were going to do are exclusive to expert accountants, as some would also be part of what an expert accountant does.

Such an argument—that humans are equivalent to pigs because pigs eat apples too—is something we didn't expect from a specialized tribunal. Nonetheless, we had the means to appeal, contest, and attempt to prove, once again, that we were in the right.

Step 3: Our attempt to appeal the decision

With slightly more experience now in courts, our second appeal was more targeted, and included additional documents to prove the reality of what we said.

By contacting the National Institute of Statistics again and presenting the court decision of the first court, they refuted the arguments provided by the court and left us with what we again believe was sufficient.

Not only that, but to prove the unconstitutionality of the norms, we also got proof that internal regulations were used to restrict the legitimate rights of individuals wanting to register a company - Internal protocols, not intended for public knowledge, are being used to block NACE codes, leaving individuals without a clear avenue to contest this decision, despite its binding nature on subordinates of the registry.

And so we thought, because, in the end, it wasn't enough.

Even though we clearly stated that the initial argument - that CAEN codes were inherently subject to interdiction and therefore could not be accepted - was incorrect, and we even created a slideshow presentation to make this easy for the courts to understand (as statistical and argument-based reasoning is not common in court), our initial positive feelings about this approach proved insufficient.

In short, after a year of litigation, the decision was withheld, and the status quo remained unchanged.

Not only that, but the court gave additional arguments, not included in the registrars' decision, to bar us, arguing that only expert accountants can do any accounting-related work.

Companies like SmartBill, Oblyo, and any software that integrates eFactura are, according to the judge, operating illegally. As such, measures should have been taken to block their ability to conduct business.

We managed to get the court to partially approve notifying the constitutional court on the legality of the norms allowing entities like CECCAR to block CAEN codes from being used through secret protocols with the registry of commerce, but again, this wasn't enough.

Of course, notifying the constitutional court was done only with one of the 2 incident articles of law, which were unconstitutional sine qua non, and not by themselves.

However, we're currently appealing at the high court, ICCJ.

Step 4: Proceed to the extraordinary Appeal at the High Court of Cassation and Justice (ICCJ)

In Romania, typically, once these forms of attack are no longer applicable, the likelihood of succeeding through extraordinary means of attack is very low. Their admissibility is strictly based on specific reasons, and only about 22% of appeals are admitted.

Appeal #1 - On notifying the Constitutional Court

Normally, the procedure of notifying CCR to judge on the matter of constitutionality only implies doing a relevancy check on the articles to the court case itself, as the court can only be notified to judge on articles relevant to the case.

While the registry rarely disputes their rationale, often providing blanket reasons - citing the (30-page) law X, and so on - it was evident that the hidden procedures were the cause of the rejection. As such, it was logical to address this sole cause to prevent any misconceptions.

And prove it we did.

Appeal #2 - On our Registration

Of course, the main issue that remains is on our company registration, which after 1 year is still denied.

Using MinervaAI, a tool that we are providing to law firmsWe crafted a response that is thorough, detailing all the errors made by the courts, and hopefully sufficient to prevent them from making an incorrect decision.

Step 5: Waiting...

We are still awaiting the court's decision on curbing its powers and operating within set parameters. We hope that, ultimately, the court will not repeat the same mistake.