Mar 29

Company registration in Bulgaria

  Among the most common company types registered in Bulgaria by Bulgarian or foreign natural persons or entities are companies of capital – limited liability company – LTD (respectively single member limited liability company) and joint-stock company – JSC (respectively single member joint stock company). Basically, the legal regulation regarding the structure, the registration and the functioning of this type of companies can be found in the Commercial Act (CA), the Commercial Registry Act (CRA) and Ordinance No 1 form 14 February 2007 for maintenance, conservation and access to the Commercial Registry (Ordinance No 1).

  The company registration procedure in Bulgaria follows a certain legally prescribed order, which ends with the registration of the new company with the Commercial Registry. From this moment on the company begins its “life” as an independent legal entity. All rights and obligations which have been assumed up to this moment on behalf of the company are to be regarded as assumed by the stockholders/the partners, who are deemed jointly responsible therefore to the creditors of the company (in process of registration). From the moment of the entry of the new company with the Commercial Registry all rights and obligations previously assumed on behalf of the company are to be ex lege deemed rights and obligations of its own and constitute its initial property balance.

  By and large, the registration of a company (a company of capital) begins with the adoption by the founders of a decision for starting the company. With joint-stock companies this is done at the so called constituent assembly at which the stockholders adopt the constituent act of the future joint-stock company as well. In accordance with it they are to elect the managing bodies and the company representatives. A decision is to be adopted for the price of the subscribed shares – their nominal value and issue price, the amount of the capital that needs to be paid up with the registration of the company. The constituent assembly adopts a number of other important decisions as well, and the thus held assembly has to be duly taken minutes of. Limited liability company partners adopt a decision for founding the company. They sign an agreement of association and elect a CEO. Provided that the partners/stockholders make capital contributions in kind with the constituent act/the agreement of association/the statute, an additional procedure for the assessment of the contribution in kind is to be made. Additionally, there has to be a notary certification of the partner/stockholder will for the contribution in kind when it comes to real estate. The law further prescribes certain minimums of the subscribed capital, which have to be paid up into a bank account of the company (in registration procedure).

  Documents proving that the steps above have been followed together with additional documentation required by virtue of the CA, the CRA and Ordinance No 1 are to be attached to an application for the registration of the company with the Registration Agency by the Ministry of Justiсе.

  The procedures for registering investment companies and for issuing public securities (stock, bonds, etc.), thus creating the opportunity for trading them on the stock exchange and the regulated markets, are significantly more complicated and are mainly regulated by Securities Public Offering Act (SPOA) and the thereto related bylaws.