Bodies of the limited liability company (LTD.) in Bulgaria are a general meeting and a manager (managers), as the manager may not be a partner. The manager organizes and manages the activity of the company in accordance with the law and the general meeting’s decisions. The company is represented by the manager. Upon several managers each of them can act alone unless the Articles of association provides otherwise. In regard to the sole owner limited liability company (LTD.), the issues that are from the competence of the general meeting are decided by the sole owner of the company. The relations between the company and the manager are settled by a contract for assignment of the management. The contract is concluded in writing on behalf of the company through a person authorized by the general meeting of the partners or by the sole owner.
The remuneration of the persons who work as managers of commercial companies, may be determined in the management contract, may be specified in the company contract, respectively the Memorandum of association, to be determined by a decision of the relevant body of the company or otherwise.
In regard to the managers of commercial companies it is necessary to be made a distinction between the personal labor activity of the manager from the economic activity of the company. The managerial and representative power of the manager derives from his entry in the commercial register, due to which for labor activity is accepted any action having attitude to the functioning of the company after its entry in the register.
The social security insurance arises from the day on which the manager starts working, and for which social security contributions have been paid or are due and continues until its termination. The social security contributions for social security insuring are due on the income from work activity. The income on which social security contributions are due includes all remunerations, including the accrued and unpaid or unaccrued income from labor activity
If, outside the management and control activity, the managers also perform personal work such as self-insured, then they should be insured in this order as well. This means that in depending on the type of the work performed, the indicated persons are obligatory insured on the first or simultaneously on both grounds.
The activity of management and control of a commercial company is different in its nature and essence of the labor activity exercised in the commercial companies by owners and partners in their capacity as self-insured persons. These two different activities are derived as independent grounds for the compulsory insurance of the persons for state social security.
Nevertheless, the two activities can be combined with each other as well as with a third type of activity. The owner (partner) registered as a manager may perform another type of labor activity in the company other than those regulated in its obligations and functions of a manager (to do personal work for which he may or may not receive remuneration). In this case, the person is insured in an order determined for the self-insured persons. When he receives incomes for personal work, they are included in determining the final amount of his social security income. In practice, it is accepted that the self-employed partners /owners exercise labor activity only when the company in which they have a share participation develops economic activity.
For the persons who receive incomes from activities on various grounds, the social security contributions are paid on the sum of the social security incomes but on no more than the maximum monthly amount of the social security income, in the following order:
– incomes from various activities, including incomes from a contract for management and control;
– incomes from compensations paid under the Labor Code or under special laws on which social security contributions are due;
– social security income as owners or partners in trade companies;
– incomes for work without an employment relationship.
For advice in connection with social security of persons holding positions in commercial companies you can contact our experts.