THE JURIDICAL NATURE OF THE RELATION BETWEEN THE

ADMINISTRATOR AND THE COMPANY

(The 6th International Conference of PhD students, University of Miskolc, Hungary, 12-18 august
2007, Published by University of Miskolc, Inovation and Thechnology transfer centre, ISBN 978-
963-661-783-7 Ö ISBN 978-963-661-782-0 )

Bogdan Cristian Trandafirescu

Lawyer, PhD Bogdan Cristian Trandafirescu,
Ovidius University of Constanţa ( Romania), Faculty of Law and Administrative Sciences

ABSTRACT
In this study we are going to analyse the problem of the juridical nature of the
relation between the company and its manager(s), as well as the problem of their
cumulating the position of wage-earner with that of manager of the company, as seen by
the Romanian legislation, commercial practice and juridical studies.

1. INTRODUCTORY EXPLANATIONS
The juridical conditions of the commercial companies in Romania is settled by
Law no 31/19901; this regulation was adopted as a necessity in the context of transition
from the planned economy to the market economy. Due to the rapidity with which it was
adopted and the lack of experience of the Romanian legislator of that time with respect to
the regulation of the aspects specific for the market economy, the law contained a series
of defaults which were later made evident by the commercial practice.
In order to repair these omissions, Law 31 suffered along the time many
modifications. In 2006 the Law was thoroughly revised by Law no 4412, by means of
which the Romanian legislator wanted to give a mature conception to the Law of the
commercial companies.
One of the initial gaps of Law no. 31/1990 was the problem of the legal nature of
the relations between the manager and the commercial company, situation that created the
propitious framework for the theoretical debates and diverse interpretations. Practice
brought about the following solution : the administrator of the commercial society was its
employee and he was ( as the law specifically shows ) at the same time subject to the
regulations of the mandate and to the special provisions contained by the regulation in
discussion.

1
Law 31/1990 regarding the commercial companies, published in Monitorul Oficial no 126-127 / 17 November
1990, with the ulterior modifications.
2
Law no 441 of 27 November 2006 for the modification and completion of Law 31/1990 regarding the commercial
companies republished and of Law 26/1990 regarding the Register of Commerce, Monitorul Oficial , no. 955 of 28
November 2006.
 2. OPINIONS EXPRESSED IN THE SPECIALIZED STUDIES

The legal nature of the relations between the administrator and the commercial
company made the object of contradictory opinions in the specialized literature 3, the
argument being centred upon the insufficient regulations ( and so, allowing for different
interpretations ) and upon the commercial practice.
A first conception regarding the relations between the administrators and the
company is the classic contractual conception, based on the mandate. The texts of the
Commercial Code regulating the administration of the company, now annuled, expressed
unequivocally the ideea that the administrators were mandatory. “The joint-stock
company is administered by one or several authorized agents, who may be temporary,
revocable, associated or not” ( art. 122 – annuled ).
A deriving point of view is that which considers that the idea of mandate was
absorbed by the larger idea of a representative with powers and obligations determined by
the law ( a mandate with a legal content ).
Inspired by the organicistic trend, some authors considered that the manager was
an organ through which the company carries out its activity. It was shown that, strictly
speaking, the administrator cannot be an organ of the company, because he does not
contribute to forming the will of the company, but he contributes to the implementation of
this will. More than that, this theory does not clear up what is the legal nature of the
relations between the administrators and the company.
Other authors, starting from the fact that the administrator carries out a permanent
and paid activity for the company, considered that the legal relation between the
administrator and the society would represent a labour contract. This conception was
rejected, as the weight of the administrative function is given by the juridical acts and not
by the material acts, as it happens in the case of labour contract.
For a correct determination of the relations between the company and the
administrator, as it is shown in the specialized literature 4, it is necessary to start from the
provisions of Law 31/1990. In art. 72 it is shown that “The obligations and the
responsability of the administrators are regulated by the dispositions refering to the
mandate and those especially stipulated in this law”. It results, therefore, that the relations
between the company and the administrator are mandate relations. The administrator is
appointed by the company contract or by the decision of the shareholders’ assembly, and
by accepting the appointment, he enters in mandatory relations with the commercial
company. The contents of the mandate ( the rights and obligations of the administrator ) is
determined by the constitutive acts of the company or by the decision of the shareholder’s
assembly.

3
For a sintetization of the opinions regarding this problem also see CĂRPENARU, S. D. : Drept comercial român,
Ed. All Beck, Bucureşti 2004, p. 224-226; CÂRCEI, E.: Societăţile comerciale pe acţiuni, Ed. All Beck, Bucureşti,
1999, p. 262-266.
4
Idem.
 Beside these determinations, as it is shown in the art. 72, the contents of the
administrator’s mandate is also partially determinated by specific regulations of the law,
this fact owing to the public interest of the legal regulation of the commercial companies.
This last interpretation given to the juridical nature of the relations is only
reinforced by Law 441/2006 concerning the modification of the law of the commercial
companies.
A regulation totally opposite to commercial practice and of a number of opinions
expressed in the specialized literature, found in Law no 441/2006, was received by the
problem of the cumulation ( by the same person ) of the position of administrator and that
of employee of a commercial company.
As we have mentioned, before Law 441 appeared, practice had imposed the
following solution : the administrator of the commercial company was its employee,
being at the same time ( as the law specifically shows ) subject to the mandate regulations
and to the special provisions contained by the regulation under debate. This practice,
permitted by the default-suffering Law 31/1990 in its old form, was also sustained by a
part of specialized literature.
It is shown that a person may cumulate the quality of administrator and that of a
wage – earner, these being contracts of a diffrent nature , but compatible. In this way, the
wage-earning adinistrator would be subject to the dispositions specific for the labor law,
with reference to his quality of wage-earner and those specific to the commercial
mandate, taking into account his position as administrator of the company 5.

3. THE DEFINITIVE SOLUTION GIVEN BY LAW 441/2006

The former commercial practice ( also sustained by certain authors in the

specialized studies ) regarding the problem of the cumulation of the position of wage-
earner and the office of administrator of the commercial company is contradicted by the
new provisions of Law 441/2006. “ during the period of their carrying out their mandate,
the administrators are not permitted to sign a labour contract with the company. In case
the administrators were appointed from the employees of the company, their individual
labour contract is suspended for the period of the mandate “ ( art. 137. 1 par 3).

4. CONCLUSIONS

The problem of the legal nature of the relations between the administrator and the
commercial company, as well as that of holding both the quality of an emplyee and that of
administrator were thoroughly debated in the specialized literature, the argument being
sustained by the insufficient ( and consequently permissive for different interpretations )
regulation, as well as by the commercial practice. If concerning the legal nature of the
relation between the administrator and the commercial company a solution was adopted
by the majority of the authors before the adoption of Law no 441/2006 refering to the
modification of the Law of commercial companies, the problem of holding the position

5
ANGHENI, S. ;VOLONCIU, M.; STOICA, C.; LOSTUN, M.G. : Drept comercial, Ed. Oscar Print, Bucureşti,
2000, p. 197-198.
of an employee and that of administrator at the same time, still remains under debate.
More than that, the opinions of the majority of the authors and the commercial practice
support the possibility of cumulating these positions, a possibility specifically invalidated
by Law no 441/2006.

BIBLIOGRAPHY :
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2000.
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