1. Types of Companies
In Bulgaria entrepreneurial activity can be developed through several types of companies. In partnerships, such as general partnership and limited partnership, members are jointly and unlimitedly liable; there are no requirements in terms of capital, there are no management bodies. Capital companies (limited liability company, joint stock company and limited partnership with shares) are characterized by a mandatory minimum of capital and management bodies, as well as limited liability of partners or shareholders.
General partnership (SD) - can be formed by two or more natural persons or legal entities who have unlimited and joint liability for the obligations of the company. The capital is formed by capital contributions of the partners, which can be monetary or non-monetary. The capital increases by attracting new partners, capitalization of part of the profit, accumulation of reserves and their transformation into capital. Decrease in capital can result from a partner’s leaving or from covering losses of the company.
Limited partnership (KD) - formed by a contract between two or more persons to carry out commercial activities under a common company, where one or more partners are jointly and unlimitedly liable for the obligations of the company, and the other partners are liable to the extent of their capital contribution. The company is managed and represented by the general partners. The capital is formed from capital contributions of partners with unlimited and limited liability.
Limited Liability Company (Ltd) - can be formed by one or more persons liable for the obligations of the company to the extent of their contribution in the company’s capital. Each partner is entitled to part of the profit, in proportion to his shares in the capital of the company.
Single-member limited liability company (EOOD) - the company is a single-member company when formed by only one natural person or legal entity, who is the sole shareholder. The minimum capital for establishing a limited liability company/single-member limited liability company is BGN 2, and it consists of shares. Management bodies are the General Meeting of partners and the manager/s, who is (are) not necessarily a partner.
Joint Stock Company (AD) - a company whose capital is divided into shares. It may be established by one or more natural persons or legal entities. The company is liable to its creditors with its property. The minimum required capital is BGN 50,000.
Single Member Joint-Stock Company (EAD) - formed by one person (natural person or legal entity), which is the sole shareholder. Management bodies are
the General Meeting of the Shareholders and the Board of Directors (one-tier system) or Supervisory Board and Management Board (two-tier system). In EAD, the sole shareholder decides on matters within the competence of the General Meeting. Shares may be registered shares and bearer shares. Preference shares may be issued. Registered shares are materialized and non-materialized. Bearer shares are transferred by their transmission, and transfer of registered shares is made by endorsement. Non-materialized shares are transferred by entering in the register of the Central Depository.
Limited partnership with shares (KDA) - formed by a contract between partners with limited and unlimited liability, and shares are issued for the contributions of limited partners. The number of limited partners cannot be less than 3. The management bodies are the General Meeting of the Shareholders and the Board of Directors. Right to vote at the General Meeting belongs only to the limited partners, and the Board of Directors consists of general partners. The minimum required capital is BGN 50,000.
2. Documents Required
Documents required for registration of limited liability company/single-member limited liability company:
- - Memorandum of Incorporation - it specifies the scope of business activity, partners’ details, amount of capital, manager’s details;
- - Protocol of Incorporation (for EOOD) or Protocol of the General Meeting of Shareholders (for Ltd) – specifies the agenda of the Constituent Meeting and the decisions made;
- - Application for registration of details - contains details about the company, manager, capital;
- - Statement under Art. 13, para. 4 of the Commercial Register Act - declare the truth of the details stated;
- - Statement under Art.13, para. 5 of the Commercial Register Act - declare that the application and attached documents have been provided by the applicant;
- - Statement under Art. 142 of the Commercial Law - declares that without the consent of the company neither business transactions will be made, nor participation in other companies will be established;
- - Statement under Art. 141, para. 8 of the Commercial Law – the Manager declares that he/she meets the legal requirements for company manager;
- - Consent for management and signature specimen – accepting the management of the company;
- - Certificate of paid-in capital;