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FIND YOUR HOME |
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WHY CHOOSE BULGARIA? |
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Membership of EU in 2007 |
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Currency pegged to Euro. |
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Full member of NATO. |
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Established tourist industry. |
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Rapid economic growth. |
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Price rises over 20% p.a. |
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Regular direct flights. |
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| COMPANY FORMATION |
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FORMS OF BUSINESS ORGANISATIONS:
The Commercial law recognises two distinct types of business enterprise
» Partnerships
» Corporations
The legal differences between them concern the allocation of liability and
the legal identity of the entity. Corporations established by foreign joint
venture partners with or without a Bulgarian partner are treated as Bulgarian
corporations (local persons) and are entitled to all rights available to
Bulgarian companies under the Commercial law.
Foreign investors may establish a company in either of these two forms,
although all forms of business organizations, permitted by law, may be used:
» Limited Liability Company
» Joint Stock Company
These business types exist as separate legal entities and offer their shareholders
limited liability.
Joint Stock Company (AD)
Joint stock company is defined as a company having its own trade name and
a predetermined amount of capital divided into shares. The liability of
the shareholders is limited to their capital.
The structure and organisation of joint stock companies are subject to regulation
by the Commercial law. However, the founders of joint stock companies are
afforded significant flexibility in drafting the articles of association,
thereby serving the needs of the specific venture.
A minimum of two shareholders, who may be either natural persons or legal
entities, are required for the formation of a joint stock company. Joint-stock
company were capital is owned by one person is called single-member joint-stock
company (EAD) The overall share capital must be a minimum of 50 000 BGN
and the minimum capital contribution (the minimal nominal value of a stock)
by each shareholder is 1 BGN.
The capital of a joint stock company is divided into shares of equal value
which are treated as negotiable commercial paper. The shares may be issued
in registered or bearer form. Both of them might be preference shares. Registered
shares are transferable by means of endorsement and must be recorded in
the registered stockholders register. Other conditions for the transfer
of registered shares might be stipulated in the company's articles of association.
Bearer shares are freely transferable by means of delivery.
Decision making in a joint stock company is by majority vote. There are
certain provisions for protection of the minority interests.
Limited Liability Company (OOD)
Limited liability companies may be composed of natural persons or legal
entities and consist of at least 2 partners.
A single-member limited liability
company (EOOD) is a limited liability company which capital is owned by
one person.
The overall share capital must be a minimum of 5000 BGN and
the minimum capital contribution by each shareholder (the amount of each
share) is 10 BGN.
The quotas of the members of the company may be unequal.
All partners are personally liable for the debts of the company up to a
maximum of their contribution, however, partners are not held liable for
the unpaid portions of others' contributions.
Shares held in a limited liability
company are non-negotiable and may be transferred only with the approval
of the other partners. Transfers must be approved by at least 75% of majority
vote, with at least 75% of the total capital represented. Limited liability
companies are also prohibited from engaging in banking or insurance business.
A limited liability company differs from the joint stock company in that
its capital is not divided into shares of stock nor represented by share
certificates. There is no board of directors for a limited company. Instead,
the appointed manager or managers have authority to run the company.
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