Appointment of a procurator – a mandatory step

Appointment of a procurator (commercial manager) is a mandatory step for both commercial structures – OOD and EOOD (in Bulgaria). It is determined by their main management structures. For EOOD this is the sole owner of the capital.  And for OOD – Manager and General Assembly (GA).

According to the law, it is possible to appoint more than one procurator (commercial manager) in a company. The procurator is a natural person (NP) and is most often either a partner in the company or a sole owner. Under certain necessary conditions, a procurator (commercial manager) is sometimes appointed, who has nothing to do with the enterprise.

Main functions and characteristics of the procurator

  1. NP, which is appointed by the trader to manage the company for a fee. A contract is concluded, which can be employment or mandate.
  2. The functions of the procurator are mainly related to the representative part of the company. His representative power covers almost all the activities of the merchant. But it is not unlimited and is limited to actions and transactions of a commercial nature. These include: taking out insurance, taking out a loan, signing lease agreements, filing claims with the relevant authorities, etc.
  3. The procurator (commercial manager) cannot make decisions alone that require the intervention of the owner. It cannot transform the enterprise or create a new one. He has no right to expropriate real estate of the trader. But by law he has the right to authorize ordinary commercial proxies.
  4. The appointment of a procurator (commercial manager of Ltd.) is in writing and with notarized signatures. Then it is entered in the Commercial Register (CR) at the request of the trader.

Important: all agreed relations, rights and obligations between a traderand a procurator have a limited effect (no matter how strictly they follow the law) and are limited to their internal relations in the company. With regard to third parties, they have no force. This means that if the procurator makes any change that is allowed by law, even though the owner or the General Meeting has not authorized him to do so, the change will be taken into account and will be valid. Therefore, provide a strong liability clause in the procurator’s contract with the company (for example, his immediate replacement), in case of incorrect actions taken by him. 

Deletion or replacement of a commercial manager

There are two options for changing or appointing a new commercial manager (procurator). The first is by decision of the General Assembly (or the sole owner). The second is if the manager himself decides to resign. The change is entered with an application in the CR and is taken into account from the moment of entry of the new manager. 

Basic steps in changing a commercial manager of the company

  1. Records of a decision of the General Meeting (or a decision of the owner if the company is an EOOD).
  2. Dismissal of the old manager and appointment of a new one by simple majority (more than half of the company’s capital, not those present at the meeting).
  3. Entry of the appointed manager (or managers) in the Company Agreement (articles of Association – EOOD) of the enterprise.
  4. Simultaneous notarization of the signatures and decisions of the General Meeting (GM).
  5. The new manager signs a declaration under the Commercial law and the CR Act together with a notarized specimen.
  6. Entry of the change in the Commercial Register after an application submitted by the new sales manager. If it is a question of adding another (new) manager or managers, the change can be requested by each of them.

Appointment of a procurator – all necessary documents and procedures

Hristo Vassilev Law Firm has serious experience in the field of Commercial Law. Our clients are large corporations and respected business structures, which our law firm serves in the field of administration, commercial law, investment and more. Do not hesitate to contact us if you need advice or assistance in appointing a procurator. Our legal experts will prepare and submit the necessary documents to the relevant authorized bodies. All deadlines and procedures will be strictly observed. Our professionalism means peace and prosperity for you.