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 entrepreneurs to focus on doing what they do best.

With many of the tasks traditionally done by lawyers and accountants not being legally exclusive to them, and the market demanding lower costs for essential services such as business registration and basic accounting, we started working on creating a plan to innovate and be financially feasible while ensuring that even if we fail, our progress will be continued by others.

The laws were quite clear - you are legally allowed to have a platform complete forms for individuals, and it doesn't 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 considering 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 done by banks.).

As such, many entrepreneurs spend significant amounts of money on what for them provides 0 revenue, and so we checked the law for accounting to ensure that we could automate in that field too.

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 specifies the activities above as being in the sole prerogative of Romanian Accountants, but allows all other activities to be done by anyone, with a work contract, or with a services contract.

Step 1: Registering with the commercial register

The first step to legally doing business 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, the 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 for regulated activities.

While this was not legally the case - a quick run through the law on accounting would show that the law states nothing on codes, and the expert accountants' law only applies to CECCAR, and not all accounting-related entities, functionaries at the registry didn't understand that - economics and accounting wasn't their specialty, and neither did we receive an opinion on CECCAR.

While they're the body empowered by the government to self-regulate their activity, they don't serve the public, but the group interest of members, serving more as a syndicate, and less like the public institution that they are.

Although not necessary nor required by law - we explained the distinction between what we were going to do, why that CAEN code was applicable, and why it wasn't a restricted activity. We were denied.

Step 2: Trying to set a good example

As this would affect our future customers who want to offer auditing services but are authorized by bodies in another EU member state, we went to court to challenge the correctness of the decision and try to stop it.

And as such, we filed a complaint with the Commercial Court in Cluj-Napoca and awaited our court date. The court proceedings were brief—we believed the case to be straightforward, and we simply restated the facts and awaited the National Institute of Statistics' explanation to dispel the misconceptions that led to the erroneous decision.

Time went, and it was the moment for the court to decide. The decision - denying our claims, a decision that wouldn't be justified, but would still hinder us from starting our business, for 182 days.

Finally, 152 days from the legal limit, and 92 days from the legal limit if extreme circumstances intervened, we got our reasoning.

The decision, very brief in its arguments, reiterated the same phrases as the registrar and did not explain, justify, or add any arguments beyond now claiming that the activities 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, equivalent to the fact that humans are pigs because pigs also eat apples, is something we didn't expect from a specialized tribunal, but nonetheless, we had the form of appeal to contest this and try to prove, again, that we were 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.

Contacting the National Institute of Statistics again, with the court decision of the first court, they confirmed 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 destined for public knowledge being used to block NACE codes, without individuals being able to somehow contest them, even if they are binding to subordinates of the registry.

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

Even though we've clearly stated that the initial argument—that CAEN codes in themselves suffer an interdiction from being accepted—was wrong, and even worked to make a slideshow presentation to make that easy for the courts to understand (considering statistics and arguments based on that is not frequent in court), and had good initial feelings, this was not enough.

In short, after a year of litigation, the decision was withheld, and the situation stayed the same.

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, any software that integrates eFactura, are all, according to the judge, illegal, and as such, measures should've been taken to block them from being allowed to work.

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: On to the extraordinary Appeal at ICCJ

In Romania, normally, once these forms of attack are gone, the chances of winning through extraordinary means of attack are very slim, their admissibility being strictly on specific reasons, and only about 22% of recourses being admitted.

Appeal #1 - On notifying CCR

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 seldom argues their reasonings, often giving blanket reasons - according to the (30-page) law X, etc, it was clear that the hidden procedures were the causes of the denial, and as such, it was rational that since that's the only cause that might lead to the misconception, that should be attacked.

And so 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 drafted a response that is comprehensive and detailed all of the errors the courts made. Hopefully, it is enough to curb a wrong decision on the courts' part.

Step 5: Waiting...

We're still waiting for the court to curb its decision and to function within parameters. And we hope that in the end, the court will not make the same mistake.