When should I contact a lawyer if I am or might become a straw man administrator?

Ideally, before you accept the administrator role. If you are already an administrator and you see signs that the company is being used for dubious transactions, consult a lawyer as early as possible. It becomes urgent to seek legal help if the company is under ANAF audit or at risk of insolvency, you receive a summons in a criminal case, or ANAF initiates a joint liability procedure or an action to attract liability in insolvency against you.

Front administrator in Romania: real criminal and tax risks

In a large number of economic criminal cases in Romania, the same story keeps coming up: “I was just a front administrator, I didn’t know what was going on in the company. They put me on the papers because I don’t have any assets in my name.” In practice, this explanation is rarely enough – neither in front of ANAF, nor in front of the prosecutor or the judge.

After the recent amendments to Law no. 241/2005 on preventing and combating tax evasion by Law no. 126/2024, tax evasion offences are punished more severely, with imprisonment of up to 10 or even 15 years in certain situations, and the possibilities of being “forgiven” by paying the damage are more limited and strictly regulated. ANAF itself emphasizes these changes in its official materials on evasion and penalties.

At the same time, the Tax Procedure Code (Law no. 207/2015) and the Insolvency Law no. 85/2014 allow the personal liability of administrators (including “front” or nominal ones) for a company’s tax debts. Court practice in recent years has become increasingly strict in holding individuals personally liable when companies are used as vehicles for evasion, fraud or the artificial accumulation of debts.

In this context, the “front” administrator or straw man is no longer an innocent figure. Accepting to appear “on paper” as administrator of an SRL – even if you are not the person truly “running the business” – may in practice mean:

risk of criminal liability for tax evasion, complicity, participating in an organised criminal group, money laundering and related offences;
risk of joint tax liability with the company for debts that can reach hundreds of thousands or millions of lei, under Article 25 of the Tax Procedure Code;
risk that, in insolvency, the court will order the attraction of your personal liability under Article 169 of Law no. 85/2014 for the company’s outstanding liabilities.

Below, in plain language, we will explain what it really means to be a “front” administrator, how ANAF and prosecutors will look at your role, and what you can still do if you are already caught in this position.

1. Who is the “front” administrator (straw man) in practice?

1.1. De jure administrator, de facto administrator and “straw man”

Under Romanian company law, the de jure administrator is the person mentioned in the company’s articles of association and registered with the Trade Registry (ONRC) as the company’s administrator. According to Law no. 31/1990 on companies, this person has legal duties to manage the company, represent it and protect its assets.

The de facto administrator is the person who, without necessarily being formally registered, in reality runs the company: takes decisions, signs contracts, gives orders, sets strategy and effectively controls the business. Both doctrine and case law have long accepted that this person can be held liable – civilly and criminally – just like the de jure administrator, once their effective role in management is proven.

The “front” administrator or “straw man” is usually a de jure administrator, but not a de facto one. Typically, we are talking about a person who:

appears in the official records as administrator;
does not actually make decisions in the company;
does not control the money, does not issue invoices, does not negotiate contracts (or claims so);
accepted the position because “a friend asked”, “they offered some cash” or “they have nothing to lose, as they hold no assets in their own name”.

In practice, the “front” administrator is used to shield the true beneficiaries of the business – those who actually organise and control schemes of tax evasion, fraudulent insolvency, money laundering or other abuses. Studies and guidance on VAT carousel fraud and “missing trader” schemes explicitly describe the use of interposed individuals (“straw men”) as formal administrators of companies used for issuing fake invoices and generating fraudulent VAT refunds.

1.2. Why is accepting to be a straw man so risky?

In criminal law, what matters is not only what appears in the Trade Registry, but what happens in reality. If you are the de jure administrator of a company through which criminal offences are committed (e.g. tax evasion, money laundering, embezzlement, EU funds fraud), the prosecutor will start from the premise that you had the duty to know what was going on and to prevent unlawful conduct.

In addition:

in criminal proceedings you may be treated as a principal offender, accomplice or even member of an organised criminal group, depending on your actual role (Criminal Code, Articles 47–52 and 367);
in tax proceedings, ANAF may pursue you jointly with the company for unpaid tax debts on the basis of Article 25 of the Tax Procedure Code, if the tax authorities prove bad faith on your part;
in insolvency, you can be ordered to cover the company’s liabilities from your personal assets, under Article 169 of Law no. 85/2014, if the court finds that you contributed to the company’s insolvency.

Put simply: the fact that you were not the one “doing the business” does not automatically protect you. By accepting the formal role of administrator, you step into an area of maximum risk – criminal, tax and civil.

2. Criminal liability of the “front” administrator

2.1. Tax evasion: where does the straw man fit in?

Law no. 241/2005 defines several tax evasion offences, including:

concealing the taxable source or object;
omitting to record income in the accounting documents;
recording expenses which do not have a real underlying transaction;
recording fictitious transactions;
altering or destroying accounting documents, keeping double bookkeeping systems, etc.

After the amendments introduced by Law no. 126/2024, ANAF explicitly points out that the offences listed in Article 9(1) of Law 241/2005 are punished by imprisonment from 3 to 10 years, and in certain situations (especially depending on the amount of the damage) the limits increase further.

In an SRL used for evasion, the “front” administrator can become involved in several ways:

signing contracts, invoices or tax returns at someone else’s request;
accepting to take over a company with tax debts or with a problematic history, without any checks;
signing bank documents, powers of attorney or company transfer paperwork;
allowing the company’s bank accounts to be used for large transactions without any economic justification.

Even if you claim you did not understand the evasion mechanisms, the prosecutor may argue that you acted at least with acceptance of the outcome, in circumstances where any reasonable administrator should have realised they are being used in an unlawful scheme (a standard similar to the “knew or should have known” test used by the Court of Justice of the EU in VAT cases, such as C-255/02 Halifax and other cases building on the Kittel doctrine).

In addition, Article 10 of Law 241/2005 regulates situations where full payment of the damage (sometimes together with additional amounts) may lead to a fine instead of imprisonment or even to a cause of non-punishment. However, these mechanisms are subject to strict conditions and do not guarantee that criminal liability will be entirely avoided, especially when there are multiple defendants or associated offences.

2.2. Accomplice, instigator, indirect perpetrator

The Criminal Code defines several forms of participation:

instigator – the person who determines someone else to commit the offence (Article 48 Criminal Code);
accomplice – the person who in any way facilitates or helps in the commission of the offence (Article 47 Criminal Code);
indirect perpetrator (author mediatus) – the person who uses another individual who acts without guilt or with limited guilt (Article 52 Criminal Code).

In practice, the “front” administrator is often seen either as an accomplice (they signed documents, allowed the use of the accounts, accepted to act as an interposed person) or as a direct perpetrator of specific offences (for example, signing false tax returns or unjustified cash withdrawals). The real mastermind behind the scheme may be treated as an indirect perpetrator, using the formal administrator as a tool.

2.3. Organised criminal group

Article 367 of the Criminal Code incriminates the establishment or support of an organised criminal group, meaning a structured group of at least three persons acting together for a period of time, with the aim of committing serious offences – including tax evasion and money laundering. (Criminal Code – Article 367)

Companies with “straw man” administrators used in chains of fictitious transactions or VAT carousel schemes are frequently treated as elements of such a group. This significantly increases the risk for all participants – including the nominal administrator – because being part of an organised criminal group is itself a separate offence.

2.4. Money laundering

Law no. 129/2019 on preventing and combating money laundering criminalises, among others:

the conversion or transfer of goods, knowing that they come from criminal activity;
the concealment or disguise of the nature or origin of goods derived from offences;
the acquisition or possession of goods, knowing that they come from criminal activities.

If the company where you are a “front” administrator is used to move funds resulting from tax evasion (for example, via fake invoices, circular transactions, unjustified cash withdrawals), you risk not only being investigated for evasion but also for money laundering – an offence punished in Romania with imprisonment from 3 to 10 years, with possible aggravating circumstances depending on the specific facts.

3. Tax liability: ANAF and joint liability of the administrator

3.1. Joint liability under the Tax Procedure Code

Article 25 of the Tax Procedure Code lists the categories of persons who can be held jointly liable with the main debtor (the company) for unpaid tax obligations. Among them are certain individuals – typically administrators, shareholders or other decision-makers – who, acting in bad faith, contributed to the accumulation or non-payment of tax liabilities.

In particular, Article 25(2) refers to situations where administrators and other persons may be held jointly liable if they:

deliberately caused the non-declaration or non-payment of tax obligations;
made the company insolvent by transferring or concealing its assets;
continued the business although it was clear the company could no longer pay its tax debts;
used the company’s assets or credit for personal benefit or for the benefit of other persons.

ANAF does not limit its analysis to the “true” owner of the business. The official procedure for engaging joint liability expressly requires the tax authority to identify all persons responsible (administrators, shareholders, persons who effectively controlled the company), analyse the company’s history and prove bad faith and causation between the actions of these individuals and the tax liabilities.

Legal literature and Ministry of Finance publications stress that bad faith cannot be presumed; it must be proven by ANAF with concrete elements (e.g. acts showing the intention to avoid payment, artificial circuits, asset-stripping operations, repeated non-compliance with tax obligations, etc.).

3.2. ANAF’s procedure: how the “front” administrator ends up personally liable

The official procedures for engaging joint liability generally involve the following steps:

ANAF identifies the main debtor (the company) and the outstanding tax liabilities;
it analyses the company’s history: changes of administrators, seats, share capital, transfers of assets, previous enforcement measures or insolvency procedures;
it gathers information about the individuals who played a real role in managing the company (including those who appear “only on paper” as administrators);
it issues a decision for attracting joint liability, which can be challenged within the legal time-limit set out in the Tax Procedure Code.

The fact that you were “only a front administrator” does not automatically put you outside ANAF’s radar. On the contrary, your name in the Trade Registry, your signature on company documents and your apparent involvement in company affairs bring you to the forefront when the tax authorities look for someone to hold personally liable for unpaid taxes.

The interaction between criminal liability and tax enforcement measures (seizures, garnishments, tax enforcement vs. criminal asset freezing) is discussed in more depth in:

4. Liability in insolvency: Article 169 of Law no. 85/2014

4.1. When can the insolvency court go after you personally?

Article 169 of Law no. 85/2014 allows the insolvency judge to order that members of the management bodies (administrators, directors, board members) and “any other persons who contributed to the debtor’s insolvency” cover, wholly or in part, the company’s liabilities.

The law lists a number of wrongful acts, including:

using the company’s assets or credit for personal benefit or the benefit of other persons;
continuing a business that obviously leads to cessation of payments;
keeping fictitious accounting records or not keeping accounts according to the law;
failing to hand over accounting documents to the insolvency practitioner, etc.

Therefore, not only the “real” administrator but any person who contributed to the insolvency – including a nominal administrator who accepted to lend their name and ignored legal duties – can be ordered to cover the company’s debts from their personal assets.

4.2. ICCJ Decision no. 14/2022 (RIL) and the presumption of liability when accounting records are not handed over

Decision no. 14/2022 of the High Court of Cassation and Justice (ICCJ), rendered on a recourse in the interest of the law, clarified the interpretation of Article 169(1)(d), second sentence, of Law no. 85/2014. The High Court held that when a person targeted by an action under Article 169 fails to hand over the accounting documents after being duly notified by the insolvency practitioner:

there is a (rebuttable) presumption of a wrongful act (failure to hand over the records);
there is a presumption of fault (culpa);
there is a presumption of causal link between this act and the damage consisting in the unpaid liabilities.

In other words, if you were an administrator (de jure or de facto) and do not deliver the accounting records, the insolvency judge may presume that all conditions for liability are met and order you to cover the company’s debts, unless you can rebut this presumption (for example, by proving that you never received the documents or that they were withheld by someone else).

For a “front” administrator, who in practice never dealt with accounting, the obligation to hand over records may look like a technical detail. In reality, it can be the key factor triggering personal liability for the entire debt of the company, even if someone else was the mastermind.

5. From ANAF audit to criminal file: how the “front” administrator ends up being questioned

5.1. Tax audit and referral to criminal authorities

In many cases, everything starts with an ANAF audit – a tax inspection or a verification of the company’s tax situation. If the inspectors find serious indications of criminal offences, they are obliged to notify the criminal investigation authorities.

The link between tax inspection and criminal investigation is explained in more detail in:

Summoned as suspects after an ANAF audit: what to do in the first 7 days as company administrator.

Once a criminal file is opened, the first person called in for questioning is almost always the administrator officially recorded in the company documents. Even if there are other persons in the background who actually managed the business, you are the first official responsible in the eyes of the authorities.

5.2. “I knew nothing” – why this defence no longer works

The defence “I didn’t know what was going on in the company, I was only there in name” is less and less credible, especially when:

the company has high turnovers and complex transactions but no employees, real premises or visible economic activity;
there have been multiple audits, notices or summonses from ANAF that the administrator should have seen;
the administrator signed contracts, bank documents, powers of attorney or other key documents;
the administrator has been involved in several companies with similar issues (profile of a “professional” straw man used across different entities).

Guidelines on tax fraud and money laundering show that authorities increasingly focus on the “should have known” standard – not only on whether the person actually knew about the fraud, but also on whether a prudent and diligent administrator, placed in the same situation, ought to have suspected an unlawful scheme and taken steps to stop it.

6. Typical scenarios involving “front” administrators

6.1. The “friend’s company” used for fake invoices and VAT fraud

Common scenario: a person experienced in business wants to develop a “creative” tax scheme and offers a friend or relative with no assets (often someone with low income) to become sole shareholder and administrator “just on paper”.

The company then issues invoices for fictitious or overvalued transactions, collects money, and VAT is never paid. When ANAF discovers the scheme and notifies the prosecutor, the “front” administrator becomes a suspect or defendant for tax evasion. On top of that, ANAF may seek joint liability for the company’s unpaid tax debts.

6.2. The “poor administrator” in a company heading towards insolvency

Another scenario: the real owner of the business transfers the shares and administrator position to a person with no assets shortly before the company enters insolvency, then “disappears”.

During the insolvency proceedings, the insolvency practitioner and creditors bring an action under Article 169 of Law 85/2014 against the nominal administrator. If this person does not hand over the accounting records and cannot explain what happened to the assets, the legal presumptions work against them and the judge may order them to cover the company’s liabilities from their personal assets.

6.3. A network of “missing trader” companies in VAT carousel fraud

VAT carousel fraud often involves chains of “missing trader” companies with “straw man” administrators through which goods and invoices circulate, but real economic activity does not. In such schemes, each front administrator can be treated as part of a broader fraudulent mechanism and, depending on their actual role, can face charges of:

tax evasion (issuing fake invoices, omitting to record real income);
money laundering (moving and disguising funds derived from evasion);
participation in an organised criminal group.

7. What can you do if you are (or are about to become) a “front” administrator?

7.1. First and most important rule: do not accept this role lightly

Before you accept to become an administrator of a company:

understand clearly what business the company will actually run;
check the background of the person proposing the “deal”: do they have pending criminal cases, companies with significant debts, a pattern of repeated insolvencies?
request access to accounting records and to the banking relationship;
refuse to sign blank documents or to leave your ID card or bank tokens in someone else’s custody.

In many cases, “front” administrators accept this role for relatively small amounts of money, exposing themselves to risks of tens or hundreds of thousands of euros, years of potential imprisonment and long-term restrictions, plus the seizure and loss of their personal assets.

7.2. If you are already an administrator and feel something is wrong

formally request access to accounting documents and tax filings in writing;
refuse to sign documents you do not understand or which lack a clear economic rationale;
if your requests are ignored or refused, consider resigning from the administrator position and notifying the Trade Registry and partners;
keep copies of correspondence in which you request information or raise concerns – these may become key evidence in a criminal or tax case.

7.3. When there is already a tax audit or a criminal file

If there is already a tax audit or a criminal investigation related to the company where you are a “front” administrator, it is critical to build a coherent defence strategy that coordinates the tax, insolvency and criminal angles. Useful references here include:

Going alone to the first hearing, thinking “I was only there in name, so nothing can happen to me”, is almost always a bad idea. Even if you were not the main beneficiary of the scheme, the way you present your role, the documents you can produce and how you explain your relationships with the other participants can make the difference between limited involvement and full liability for evasion, money laundering and outstanding tax debts.

8. Conclusions: the “straw man” is no longer invisible

The practice of using “front” administrators and “companies on someone else’s name” is no longer tolerated by ANAF, prosecutors or courts. The tightening of tax evasion rules (Law 126/2024), more robust procedures for engaging joint tax liability and consistent case law of the High Court in insolvency cases have raised the stakes for everyone involved – including nominal administrators.

If you are already an administrator in such a company or someone offers to “put you on the papers” for an SRL, you need to understand that:

criminal and tax liability does not depend on how much you personally earned from the business;
you can be held liable for the entire tax damage, you can be targeted by asset freezes and confiscation measures and you can lose personal assets (even if they were acquired before you became an administrator);
“I didn’t know” is a very weak defence, especially when there are indications that any diligent administrator should have suspected an unlawful scheme.

In these situations, a serious legal strategy – combining criminal, tax and insolvency analysis – is not a luxury but a necessity. This article is for general information only and does not replace personalised legal advice from a lawyer experienced in economic criminal cases, tax evasion and tax/insolvency litigation.

Frequently Asked Questions (FAQ)

1. If I was only a “front” administrator and received no money, can I still be criminally liable?

Yes. Romanian criminal law does not require that you obtained any personal gain in order to be held liable. If the evidence shows that you accepted to be administrator, signed documents or allowed the company to be used for fictitious transactions or concealment of income, you can be investigated for tax evasion, money laundering, complicity or participation in an organised criminal group, regardless of whether you personally received money.

2. If I prove that I did not actually run the company, am I automatically off the hook?

Not necessarily. Showing that someone else was the de facto administrator does not automatically exonerate you. Courts and tax authorities may conclude that you contributed at least by acting as a “shield” and by failing to exercise any diligence. Both the de facto and de jure administrator can be held liable – and in insolvency, Article 169 of Law 85/2014 allows the court to go after any person who contributed to the company’s insolvency.

3. Can ANAF go after me personally for the company’s tax debts if I was only a straw man administrator?

Yes, if the conditions of Article 25 of the Tax Procedure Code are met: there are outstanding tax debts and ANAF proves that, through your bad faith conduct (for example, allowing asset-stripping, hiding assets, continuing the business when it was clearly insolvent), you contributed to the non-payment of those debts. The joint liability procedure involves a detailed analysis of the company’s situation and of each person’s role.

4. In insolvency, what happens if I cannot hand over the accounting records because I “don’t have them”?

Failing to hand over accounting documents is extremely dangerous. Under ICCJ Decision no. 14/2022, interpreting Article 169(1)(d) of Law 85/2014, not handing over the documents after being notified by the insolvency practitioner triggers a rebuttable presumption that all conditions for personal liability are met – wrongful act, damage and causation. You will then have to prove that you are not responsible for the missing records (for instance, that you never received them or they were withheld by someone else).

5. If I pay the tax damage, will the criminal case be closed?

Not automatically. Law 241/2005 provides certain scenarios in which full payment of the damage (sometimes with additional amounts) can lead to a fine instead of imprisonment or even to non-punishment. However, these provisions are subject to strict conditions and do not apply in every case. Moreover, related offences (e.g. money laundering, forgery, participation in an organised criminal group) are not covered by the same rules. A concrete, case-by-case legal assessment is essential.

6. What can I do preventively if someone offers me to be a “front” administrator for their company?

The safest option is to refuse. If you still consider accepting, check the background of the persons involved, demand full access to accounting and banking information, refuse to sign blank documents and make it clear – in writing – what your role will be. Even then, the risks remain high, and experience shows that most “straw men” regret their decision at the first ANAF audit or the first summons from the prosecutor’s office.

7. When should I contact a lawyer?

Ideally, before you accept the administrator role. If you are already an administrator and you see signs that the company is being used for dubious transactions, consult a lawyer as early as possible. It becomes urgent to seek legal help if:

the company is under ANAF audit or at risk of insolvency;
you receive a summons from the prosecutor’s office or the police in a criminal case;
ANAF initiates a joint liability procedure or an action to attract liability in insolvency against you.