Commercial act, company setup, limited liability company, articles of association (last amended December 2016 / just a very short extract)
Art. 17 (1) A merchant may open a branch outside the community where its seat is located.
(2) A branch shall be registered in the commercial register on the basis of a written application indicating:
1. the seat and purposes of the branch;
2. data concerning the person who manages the branch, and concerning the scope of his representation powers.
(3) The application referred to in paragraph (2) which shall enclose the notarized consent, with a signature specimen, of the person who manages the branch.
Branch of a foreign person
Commercial act – Art. 17a (1) A branch of a foreign person registered with the right to engage in commercial activity in accordance with its national law shall be registered in the commercial register.
(2) In addition to the data under Article 17(2), the application for registration shall also contain data on:
1. The legal form and company or the name of the foreign person, as well as the branch name, if different from the one of the foreign person;
2. the register and number, under which the foreign person was recorded, if provided for by applicable law;
3. the law of the state, applicable to the foreign person, if different from the law of an EU Member State;
4. persons, which represent the foreign person according to the register, where it was recorded, where such a register exists, the manner of representation, as well as the liquidators and receivers and their powers.
Art. 19 A branch shall keep its account books as an independent merchant, without preparing a separate balance sheet. The branch of a legal person which is not a merchant within the meaning of this Act and the branch of a foreign person shall further prepare a balance sheet.
Commercial act/Art. 21 (1) A procurator shall be a natural person commissioned and authorized by a merchant to manage its enterprise for compensation. Such authority may be given to more than one person for either a separate or joint exercising of the procuration. The signatures on the procurator’s mandate (procuration) shall be notarized and it shall be submitted by the merchant for registration in the commercial register together with a specimen signature of the procurator.
Art. 53 (1) Any merchant shall keep accounts in which it shall record the movements of its enterprise’s property. Such movements shall be recorded in chronological order.
(2) A merchant shall, through inventory performed within the time periods prescribed by the Accountancy Act, establish the availability and value of the items of the assets and liabilities of its enterprise’s property.
(3) A merchant shall sum up the results of its commercial activities on the basis of the entries in its books of account and of the inventory, and prepare an annual financial statement and, where necessary, the relevant accounting notes. The annual financial statement must be audited by a registered auditor in the cases provided for by a law.
Art. 54 The opening balance sheet for each year shall correspond to the closing balance sheet for the preceding year. A balance sheet shall also be prepared when a merchant winds up its activities.
Art. 55 (1) Regularly kept account books and entries therein shall be admissible as evidence between merchants for establishing commercial transactions.
(2) Account books kept in violation of the provisions of this Act or the Accountancy Act shall be inadmissible as evidence in favor of the party whose duty it is to keep them.
Commercial act – Art. 63 (1) A company, limited liability company, is an association of two or more persons for effecting commercial transactions with joint means.
(2) In cases provided by a law a company may be incorporated by one person.
(3) Companies shall be legal persons.
Art. 64 (1) The types of companies are – limited liability company:
1. general partnership;
2. limited partnership;
3. limited liability company;
4. joint-stock company;
5. partnership limited by shares.
Limited liability company
Art. 113 A limited liability company company setup may be formed by one or more persons which shall be liable for the company’s obligations with their contributions to the company’s registered capital. Articles of association.
Commercial act. Art. 116 (1) The trade name of a limited liability company shall contain the extension “druzhestvo s ogranichena otgovornost” [limited liability company] or the abbreviation “OOD”.
(2) Should all the capital be owned by one person, the trade name shall contain the extension “ednolichno OOD” (single person limited liability company).
Capital and Shares
Art. 117 (1) The capital of a limited liability company setup company may not be not less than BGN 2. It shall consist of the participating interests of the members, and no interest may be smaller than BGN 1.
(2) The sum total of the participating interests must be equal to the capital, and the value of each participating interest must be a multiple of 1.
(3) The interests of the individual partners may be of unequal value.
(4) An interest may be held jointly by several persons.
Commercial act. 120 (1) Each partner shall pay up or contribute its interest as provided in the Articles of Association.
Art. 133 (1) The partners cannot claim their interests as long as the company exists. They are only entitled to part of the profits in proportion to their interests, unless otherwise agreed.
(2) No interest on the partner’s profits may be agreed upon.
Art. 134 (1) For covering losses and in case of temporary shortage of cash the partners may be required, by a general meeting resolution, to make additional monetary contributions within a fixed period. The additional contributions shall be in proportion to the respective interests in the capital, unless otherwise determined.
(3) The additional contributions shall not affect the company’s registered capital. It may be agreed that the company shall pay interest on them. Article 73c shall not apply to refunds of additional cash contributions.
Powers of the General Meeting
Art. 137 (1) The general meeting shall:
3. approve the annual report and balance sheet, distribute the profits and resolve on their payment;
4. resolve on the increase or decrease of the registered capital, approve articles of association;
9. resolve on additional monetary contributions.
JOINT-STOCK COMPANY – company setup
Art. 158 (1) A joint-stock company is a company the capital stock of which is divided into shares. The company shall be liable before its creditors with its assets.
(2) The trade name of the joint-stock company shall include the extension “aktsionerno druzhestvo” (joint-stock company) or the abbreviation “AD”.
Art. 159 (1) A joint-stock company may be found company setup by one or more natural or legal persons.
(2) When a joint-stock company is formed by one person, company setup, a constitutive deed shall approve the Statutes and appoint the first supervisory board or board of directors.
(3) The constitutive deed shall be drawn up in writing.
Art.161 (1) The capital stock and the value of the shares shall be designated in leva.
(2) The minimum value of the capital stock of a joint-stock company shall be 50 000 leva.
Art. 162 The minimum nominal value of a share shall be 1 lev. Larger nominal values of shares must be in full levs.
Art.188 (1) The shareholders shall be obligated to make contributions for the shares subscribed, which shall cover the fixed by the Articles of Association portion of the value of the shares. The remainder shall be paid in within a period stipulated in the Articles of Association, but not later than two years of the company’s registration, or increase of capital respectively.
Increase of Capital
Art. 192 (1) The capital stock may be increased by issuing new shares, by increasing the nominal value of shares already issued, or by converting debentures into shares pursuant to Article 215.
Art. 197 (1) The general meeting may resolve to increase the capital stock by partial capitalisation of profits. The resolution shall be adopted within three months from the date that the financial statement for the previous year is approved, with a majority of the votes of three quarters of the shares represented at the meeting.
(2) The company’s balance sheet shall be presented and the fact that the increase is from the company’s own funds shall be explicitly stated upon filing the resolution to increase the capital.
(3) The new shares shall be allocated among shareholders, including the company if it possesses its own shares, on a pro rata basis. Any general meeting resolution in contravention of the latter provision shall be null and void.
Art. 221 The general meeting shall:
2. resolve on increase or reduction of the capital stock; company setup, approve article of association;
6. appoint and dismiss registered auditors when the conduct of an audit is mandatory in the cases provided for by law or a decision is made for conduct of an independent financial audit;
7. approve the annual financial statement as audited by the appointed registered auditor when an independent financial audit has been conducted, resolve on profit distribution, replenishment of the Reserve Fund and payment of dividend;
Annual Closing of Accounts and Distribution of Profits
Commercial act. 245 Annually, not later than the 31st day of March, the board of directors or the management board, as the case may be, shall draw up the annual activity report and the financial statement for the previous calendar year, and shall submit these to the registered auditors elected by the General Meeting when the conduct of an audit is mandatory in the cases provided for by law or a decision is made for conduct of an independent financial audit.
Commercial act: 246 (1) The limited liability company shall set up a reserve fund.
(2) The sources of financing the reserve fund shall be:
1. Company setup. At least one tenth of profit which shall be set aside until the fund’s assets reach one tenth or more of the company’s capital stock or such other larger proportion as the Articles of Association may provide;
2. Company setup. the proceeds obtained in excess of the nominal value of shares and debentures upon their issuing;
3. Company setup. the total of the additional payments made by the shareholders for preferences given them with shares;
4. other sources provided for by the Articles of Association or by a general meeting resolution.
(3) Disbursements from the reserve fund may be made only for:
1. covering losses for the current year;
2. covering losses for the previous year.
(4) When the assets of the reserve fund exceed one tenth of the company’s capital stock, or any other larger proportion thereof as may be provided for in the Articles of Association, the excess amount may be used for increase of the capital stock.
Commercial act. 248 The annual financial statement shall be audited by the registered auditors appointed by the General Meeting in the cases provided for by law.
(2) The audit shall have as its object to ascertain whether the provisions of the Accountancy Act and the Articles of Association on annual closing have been observed.
Nobody believes that you are here to read or study Bulgarian Commercial Act. This is nonsense. It is mote than 200 pages and only our lawyers can enjoy such masochism.
But for sure you may contact us and ask your question.