Bulgarian commercial companies
Bulgarian companies legal form, Bulgarian commercial entities form of organization


Bulgarian companies legal form

Bulgaria commercial companies

According to the Bulgarian commercial Law and applicable Bulgarian legislation that the following entities:

Sole trader – ET

General partnership – BD

Limited Company – Ltd

Single member limited liability – LTD

Joint Stock Company – AD

Limited Partnership – Limited Partnership

Limited partnership with shares – KDA

All except Sole trader, represented entities. Their founders can become Bulgarian or foreign natural and legal persons. All businesses must be entered in commercial register

Sole trader

Sole trader is an individual/physical/. Established by Bulgarian or foreign citizen having the necessary permanent residence in Bulgaria. A person can register as a sole trader with a company. The minimum initial capital of the company is not defined by law. Founder liable for debts of the company and with his personal property. Sole trader participated in the same property as in civil and in turnover. Sole trader is recommended for persons at the beginning of its business when the company does not imply acceptance of the major duties. The company name must contain no abbreviations and last name or middle name of the founder and the designation “sole proprietor” or ” Sole trader “.

Benefits

complete independence in decision-making and profit-sharing;

relatively easy, quick and inexpensive registration procedure;

law does not require an initial capital.

Disadvantages

trader complies with all my personal property for the obligations of the entity;

relatively low confidence by banks when granting loans.

General partnership – BD

General partnership is a typical representative of the partnerships, which are generally created from well-known each other founders. In this type of company participants are united by a particular individual (personal) work. They must be at least two and bear joint and unlimited liability for debts of the company, including personal property (except such inaccessible – housing, salary etc.. (Inaccessible property – minimum rights, without which individuals can not exist )). The relationship between the founders are determined by the memorandum. They are required to personally participate in the activities of the Board.

The minimum initial capital of the company is not established by law, so this form is suitable for individuals who have little or limited resources and where the company does not imply acceptance of the major duties. Each founding member has the right to manage the company. But without the consent of the other founders, he has no right to participate in other companies or enter into transactions relating to the objects of the company itself.

Benefits

law does not specify a minimum amount of capital on incorporation;

form of association appropriate for the development of family business is not large;

Disadvantages

members responsible for the debts of the company with its entire property, ie in an action against the plaintiff company can make claims against one or more partners;

necessity of unanimity in decision-making on a range of issues;

need a relatively high degree of trust between partners;

may encounter difficulties in finding external funding sources.

Limited liability company – Ltd

Limited liability company is the most appropriate form of development for small and medium capital. It combines elements of personal and capital companies, but belongs to the past in that it limited the minimum amount of initial capital lev -2 Ltd have been widespread in Bulgaria thanks to the advantages they provide.

Unlike CD, Ltd in not requiring the personal involvement of founders in the company and they risk only the amounts paid in initial capital.Meanwhile, Ltd. differ from the limited liability company (another form of capital association) under the simplified procedure of registration, less visibility of performance and the low amount of initial capital.

The share of a co-founder in the initial capital may not be less than 1 lev number of founders is not limited. To manage and represent the company may one or several founders or specially appointed for that purpose a person who is a founder. The number of founders can be changed after registration of the company, ie founders can be excluded or to incorporate the new. Any changes in the incorporation must be registered in the commercial register.

The company must contain the company and add “limited liability company” or “Ltd”.

Advantages:

members are responsible for the company’s obligations only to the extent of its interest therein;

relatively high confidence of creditors;

Disadvantages:

requirement of a minimum capital for the company;

Single/Sole/ member limited liability

Founder of LTD can be only one natural or legal person. In this case it will be named a single member limited liability – LTD. Founder of soleLTD can personally manage and deliver enterprise or to appoint another person. In everything else soleLtd complies with the regulation set for  LTD.

Joint Stock Company – AD

Stock company is typically a company in which the participants have in common only capital. The initial capital is divided into equal parts (shares). The shareholder participates in the company solely those of its shares. He is not obliged to make any personal effort and can always sell their shares. The minimum capital of AD should be 50,000 lev (in nominal value of shares) in the case of formation of the company by subscription – 100,000 Levs shares must be registered with the Central Depository. SA is managed by the General Assembly and Management Board (Board of Directors).To be entered in the commercial register the company needs to be brought down in the statutes of the value of each share, but not less than 25% of nominal or provided in the statute issue price of each share.

Benefits

high credit rating

Disadvantages

complex system of formation and management;

requires a good knowledge of all stocks, bonds and ways to manage them;

Limited Partnership

Unlike the Board of this company one or several founders bear joint and unlimited liability for debts of the company and the rest – only the agreed amount of initial capital contribution. Responsible and co-founder runs the company it represents. Founders with limited liability are not permitted to manage the enterprise and the suspension of decisions adopted by the founders with unlimited liability. The name of the limited partnership consists of the name at least one general partner and the word “limited partnership” (“KD”).In everything KD corresponds to SD.

Advantages:

Advantage of limited partners that are responsible for the company’s commitment to the value of the payments;

For general partners advantage is that limited partners provide capital for the company, without participating in its management;

The law does not require a minimum capital for establishing the company

Disadvantages:

For general partners – responsible for the debts of the company with all his property;

For limited partners – are not involved in the management of the company and can not block decisions of the general partner;

Limited partnership with shares – KDA

Limited partnership by shares is formed by contract between the founders of limited and unlimited liability. Founding a limited liability shall be not less than three and give them their share of the value of their initial capital contribution. Founders of the company founders appear with unlimited liability, they convened the Constituent Assembly. The General Assembly entitled aloud founders have only limited liability. Board of Directors shall consist only of them. In everything else KDA corresponds to public company.

Registering a branch of foreign company

-Every trader can open a branch outside the locality where it is registered, be registered with the Commercial Register.

Foreign-registered person entitled to conduct business under its national law, to organize its business in Bulgaria in the form of a branch of a foreign entity the branch of a foreign merchant in the Commercial Register does not rise to a new entity. Foreign dealer is a party to legal relationships involving registered in Bulgaria through a branch, and meets with all their possessions to those obligations. In disputes arising from direct dealings with the branch of a foreign trader, claims may be brought and the headquarters of the branch. The branch of a foreign trader keeps business books as an independent trader and establish a separate sheet.