Measures To Support Self-employed Persons In The Context Of The State Of Emergency

1. NOTION

Generally, according to Law no. 346/2004 on stimulating the establishment and development of small and medium-sized enterprises, the category of Micro, Small and Medium Enterprises (SMEs) is made up of enterprises employing less than 250 people, have a net annual turnover of up to 50 million euros and / or have total assets up to 43 million EUROS.

Micro-enterprises are defined as enterprises with less than 10 employees and whose annual turnover or total annual balance sheet does not exceed 2 million EUROS.

Small-enterprises are defined as enterprises with less than 50 employees and whose annual turnover or total annual balance sheet does not exceed 10 million EUROS.

Medium-sized enterprises are defined as enterprises with less than 250 employees and whose annual turnover does not exceed 50 million EUROS or whose total annual balance does not exceed 43 million EUROS.

The category of Micro, Small and Medium Enterprises (SMEs) is the genus, and the self-employed person belonging to the micro enterprises is the species.

According to art. 2 letter i) of the Government Emergency Ordinance no. 44/2008, the self-employed person is defined as the economic enterprise, without legal personality, organized by a natural person who mainly uses his labour force and his professional skills.

An self-employed person may combine this quality with that of a third-party employee who operates both in the same field and in another area of economic activity than the one for which the first is authorized.

The law allows the self-empolyed person a maximum of 5 classes in the CAEN code as an activity object and a maximum number of 3 persons having the quality of employees. In addition to these, the self-employed person may establish contractual relations with any natural and legal persons, other SEPs, individual enterpises or family enterprises, in order to carry out the activities for which it was authorized.

1. MEASURES TO SUPPORT SELF-EMPLOYED PERSONS

By the Government Emergency Ordinance no. 110/2017 has been established a program to support small and medium-sized enterprises, which aims to provide state guarantee facilities for loans granted to small and medium-sized enterprises by credit institutions.

The beneficiaries of this program are the companies, the self-employed persons, the individual enterprises, the family enterprises, the cooperations, the micro-enterprises established by the beginner entrepreneurs and that fulfill the conditions of classification in the category of small and medium enterprises.

According to the amendments made by the Emergency Ordinance no. 29/2020 regarding some economic and fiscal-budgetary measures and by the Emergency Ordinance no. 42/2020 regarding the amendment and completion of SMEs support program, the beneficiaries of the following types of credits can benefit from the program:

1.One or more loans for investments and / or one or more credits / lines of credit for working capital, guaranteed by the State, through the Ministry of Public Finance, at a maximum of 80% of the financing value, excluding interest, bank fees and charges related to secured credit; the maximum cumulative value of the two types of loans and which can be guaranteed by the state is 10,000,000 lei, the maximum value for financing investment credits is 10,000,000 lei, and the one for financing working capital loans is 5,000,000 lei, within one of the following conditions applicable to both financing, which represents the largest value of:

– double the amount representing the salary expenses, including the compulsory social contributions due by the employer related to the salary income and assimilated to the salaries, registered at the level of 2019. In the case of the companies established after 1^st  January, 2019, the maximum amount of the loan cannot exceed the estimated amount for the first 2 years of activity; or

– 25% of the beneficiary’s net turnover for 2019, respectively the gross income or the annual income norm in the case of natural persons who obtain income from independent activities, as the case may be, according to the Single Declaration on the income tax and the social contributions due by the natural persons deposited to the competent fiscal bodies for the year 2019; or

– a value arising from its liquidity needs, these may include both working capital costs and investment costs, provided that the beneficiary submits supporting documents, in which case the amount of the loan cannot exceed the liquidity needs of at the time of grant for the next 18 months.

2.One or more guarantees for loans / lines of credit for financing working capital, excluding the interest, commissions and bank charges related to the state guaranteed credit in a maximum of 90% granted to a micro or small enterprise, with a maximum value of 500,000 lei for microenterprises, respectively maximum 1,000,000 lei for small enterprise, within one of the following conditions applicable to both financing, which represents the largest value of:

– double the amount representing the salary expenses, including the compulsory social contributions due by the employer related to the salary income and assimilated to the salaries, registered at the level of 2019. In the case of the companies established after 1^st January 2019, the maximum amount of the loan cannot exceed the estimated amount for the first 2 years of activity; or

– 25% of the beneficiary’s net turnover for 2019, respectively the gross income or the annual income norm in the case of natural persons who obtain income from independent activities, as the case may be, according to the Single Declaration on income tax and social contributions due by the natural persons deposited to the competent fiscal bodies for the year 2019; or

– a value arising from its liquidity needs, these may include both working capital costs and investment costs, provided that the beneficiary submits supporting documents, in which case the amount of the loan cannot exceed the liquidity needs of at the time of grant for the next 18 months.

By the completion brought by O.U.G. no. 42/2020, only the interests related to credits / lines of credit for working capital and loans for investments from point 2 above are subsidized by the Ministry of Public Finance in a percentage of 100%.

May benefit from this program enterpsises that meet the following cumulative conditions:

• are not in financial difficulty (for example, the SME is not in insolvency procedure, forced execution procedure triggered by the tax authorities and / or other creditors, operational closure, dissolution, liquidation, special administration or agreed and does not fulfill the criteria in the national legislation to be subject to an insolvency procedure at the request of the creditors, according to the declaration on their own responsibility, completed and signed by the beneficiary of the financing);
• are not in dispute, as a defendant, with the Ministry of Public Finance and / or the partner credit institution;
• does not appear with outstanding loans, including for leasing financing, in the last 6 months prior to the date of 31 December 2019;
• are not forbidden to issue checks on the date of 31 December 2019 and it does not appear in the database of the Payment Incident Office with major incidents with promissory notes in the last 6 months prior to the date of 31 December 2019;
• the insolvency proceedings have not been opened;
• presents to the credit institution collateral guarantees, which, in the case of investment loans, together with the state guarantee and the legal real estate and / or movable mortgage on the assets financed from the credit, cover at least 100% the value of the financing. For credits / lines of credit for financing working capital may be included in the structure of guarantees related to the loan legal movable mortgage on the credit balances of all accounts opened by the beneficiary at the credit institution, together with the state guarantee;
• are eligible according to the internal regulations of the credit institution;
• does not register outstanding tax obligations and other budgetary debts administered by the central fiscal body, and otherwise, the beneficiary undertakes to pay the outstanding obligations from the credit / credit line for the working capital granted under the program;
• submit a written document committing not to lay off existing staff from the date of entry into force of this emergency ordinance until 31^st December 2020; the company can organize the work program of the employees according to the evolution of its current activity.

According to O.U.G. no. 42/2020, are not eligible for granting guarantees under the program small and medium-sized enterprises in the sectors / areas: gambling and betting activities, production or sale of weapons, ammunition, explosives, tobacco, alcohol, substances under national control, narcotic and psychotropic plants, substances and preparations, investigation and protection activities.

In accordance with art. 6 paragraph (2) of the O.U.G. no. 110/2017 updated, the maximum duration of the financing is 72 months in the case of investment loans and 36 months in the case of credits / lines of credit for working capital, with the possibility of extending the latter for a maximum of 36 months.

Also as a means of protection of the authorized natural person, as a taxpayer, art. VII of the O.U.G. no. 29/2020 stipulates that, from the date of entry into force of the ordinance, interest and default interest for the due tax obligations are not calculated and due. This measure shall cease 30 days after the cessation of the state of emergency.

During the state of emergency, small and medium-sized enterprises, which have discontinued their activity in whole or in part based on the decisions issued by the competent public authorities and hold the emergency certificate issued by the Ministry of Economy, Energy and Business, benefit from deferred payment for utilities services – electricity, natural gas, water, phone and internet services, as well as for the deferred payment of the rent for the building destined for registered headquarters and secondary headquarters.

For other ongoing agreements of small and medium-sized enterprises, force majeure may be invoked only after the prior and proven attempt to renegotiate the clauses. The impact upon small and medium-sized enterprises activity is proving by the emergency certificate.

A case of force majeure is assumed to be the unpredictable, absolutely invincible and inevitable circumstance that results from an action by the authorities in applying the measures required to prevent the infection with COVID-19 virus. Being a relative presumption, the interested party can overturn it by any means of evidence.