For the successful start of your business, we always recommend registering a limited liability company or a sole proprietorship with limited liability.
On the website of Euroformat.eu you can read many more details about how to register Bulgarian company and what administrative formalities you have to abide by.
Registration of Limited Liability Company
A commercial company is an association of two or more persons to carry out commercial transactions with common funds. In cases provided by law, a company may be established by one person. Companies are legal entities. Companies are numerous clauses or exhaustively listed in the law.
Ltd. was first established in 1892 with a special law in Germany. A limited liability company may be established by one or more persons who are liable for the obligations of the company with their share contribution in the capital of the company. The establishment itself requires the conclusion of a memorandum of association – a company contract, which is concluded in writing. A partner may be represented by a proxy with an explicit power of attorney with a notarized signature. The company’s name must contain the designation “Limited Liability Company”, or “Ltd.” for short. When the capital belongs to one person, the company contains the designation “sole proprietorship”.
The establishment of a limited liability company in Bulgaria
The capital of the limited liability company may not be less than BGN 2. It consists of the shares of the partners, which may not be less than BGN 1. Call today to get professional help with the registration of Ltd.
The incorporation of a limited liability company is a mixed factual composition (like any incorporation). The legislation of the Republic of Bulgaria provides for the following elements:
Concluding a memorandum of association. This contract has 2 functions:
a) It is a manifestation of the consent of the founders for the establishment of the company.
b) It establishes the status of the legal entity (bodies, procedures, etc.)
Article 115 of the Commercial Law specifies the elements of the content of the company contract. In point 1-6 are the obligatory elements:
- The company, the seat and the address of management of the company.
- The subject of activity and the term of the contract.
- The name, respectively the company of the partners.
- The amount of the capital. When the entire amount of the capital has not been paid at the establishment, the terms and conditions for its payment shall be determined in the contract. The term for additional payment of the entire amount of the capital may not be longer than two years from the registration of the company, respectively from the increase of the capital;
- The amount of the shares with which the partner participates in the capital.
- The management and the manner of representation; and in 7 and 8 – the optional ones.
- The advantages of the partners, if agreed.
- Other rights and obligations of the partners.
The enumeration is not exhaustive. The legislator also envisages a form for the validity of the company contract – simple written. However, if at the signing of the memorandum of association or at the constituent assembly some of the founders is represented, it must be represented by a proxy with a power of attorney with a notarized signature of the founder. The difference in the form is a misunderstanding, because initially the idea is in both cases that the form is notarized, but for the contract this is dropped, and the qualified form of authorization remains. The preservation of this form to this day shows that it is in the interest of legal certainty.
Payment of the assumed shares
Payment of the assumed shares (fulfillment of the obligation for installment). It is not necessary that the whole obligation has been fulfilled – each partner must have paid at least 1/3 of his share, but not less than BGN 10, but so that it is paid 70% of the capital (ie 1/3 of the contributions of each partner is not sufficient). All the rules for contributions to capital companies apply here.
Ltd. must have a manager (1 or more). Capital companies must have bodies. The requirement for a manager exists because if there is no manager, the company is incapable. The manager is the body through which the company enters into relations with third parties. The manager can be appointed by the company contract itself or by a decision of the founders (of the Constituent Assembly) added to it.
Entry in the commercial register
The manager is entitled to request registration. He also has the obligation to request it. The entry is made by presenting:
1) the company contract;
2) a notarized sample of the manager’s signature;
3) minutes of the constituent assembly;
4) certificate for the circumstances under article 142, paragraph 1;
5) receipt for paid DT for promulgation in the State Gazette.
Article 119, paragraph 4
A new moment is the rule of Article 119, paragraph 4: In case of change or addition of a friend. Dr. in auction. A transcript of it shall be submitted to the register, which shall contain all amendments and supplements, certified by the body representing the partnership, as the idea of the legislator is that the third parties may check the current partnership contract as of any date. This requirement was imposed by practice even before the existence of para. 4. There is a similar rule with a Joint Stock Company.
The new rules for publicity should include the provision of Art. 146, para. 4: The audited and approved annual accounting report shall be submitted to the Commercial Register, and a notice to that effect shall be published in the State Gazette, unless a law provides that the annual accounting report of the company may not be audited by expert accountants. At Ltd. ZSchet. says when certification by a certified public accountant is required and when not, if the inspection is mandatory, the General Meeting must accept the report and then comply with the requirement for publicity under Art. 146, para 4. In certain cases, the need for the annual accounting report to be published in a central daily newspaper is envisaged.
The entry is promulgated, but the promulgation is not an element of the factual composition.
IN AN INTERPRETATIVE DECISION № 3 OF 15.11.2013 UNDER TD № 3/2013,
the Supreme Court of Cassation ruled as follows: “Decision of the General Meeting of Ltd under Art. 137, para. 1, item 7 of the Commercial Act is not a necessary condition for the validity of a disposition transaction with real estate, property of the company or real right over it, concluded by the body representing the company (manager / managers).
The prohibition of art. Shall not be applied to the organ representation of the commercial companies upon concluding a commercial transaction by the same person, as an organ representative by virtue of the law of two commercial companies. 38, paragraph 1 Law on Obligations and Contracts.