Transfer Company shares LLC Bulgaria

The most common and most popular legal-organizational form for performing micro, small or even medium business in Bulgaria is Limited Liability Company. Through the registration of a company,  usually a small number of partners of shares resources and efforts to carry out their business project.

But often different reasons, both objective and subjective, lead to situations in which one or more partners leave the company.

When leaving the company without the consent of the other partners, it is necessary to carry out and terminate the procedure of unilateral departure of the company. It is initiated by sending a notice under Art. 125, para. 2 and 3 Commercial Code. However, when leaving the company it is agreed and shared with the other partners, it is done by transferring the shares held to the other partners or to a third party with a contract.

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The transfer of shares, even when the company is sole proprietor, should be distinguished from the transfer of a company and the transfer of an undertaking.

Shares, a company, and an enterprise are three differenmet concepts and three different object deals respectively. According to the Commercial Law, a company is the name under which the trader exercises his trade and is signed. The business firm may only be transferred with the enterprise but may be changed by the trader at its own discretion at any time.

The enterprise, for its part, represents a set of rights, obligations and factual relationships. The transfer of the enterprise (in whole or in part) is a transaction other than the transfer of the shares in the company.

The parties to the transfer agreement are the traders themselves (ET or companies) and the parties to the share transfer agreement are the owners of these shares (natural or legal person) and their purchaser (natural or legal person).

After transferring the property, the property rights (property, cars, belongings, inventory, receivables, debts, etc.) are transferred from one trader to another, whereas, after the transfer of shares, these assets remain the property of the same company. this company.

Transfer of shares from Bulgarian LLC 

The transfer of shares is regulated in Art. 129 Commercial Code. When this transfer occurs between partners, it becomes free (unless otherwise provided in the Company Agreement). However, if the shares are transferred not to a third person or persons, it is necessary that the buyers apply for their admission to the company, which is considered by the General Meeting. Ie. the transfer of shares to outsiders is made by the will of the other partners. On the basis of the submitted application a General Meeting is convened, which votes and decides on the admission of a new partner in the company. The decision is taken by a multiple of ¾ of the capital, unless a larger majority is provided for in the company agreement. This decision is formed in a protocol, which (in view of amendments to Article 137 of the Commercial Code) should be with a notary certification of the signatures and the content.

If the General Meeting approves the planned shareholding, a share transfer contract is prepared. Shares can be transferred at both a nominal and an agreed (market) price – lower or higher. The contract is notarized on both the signatures and the content.

Changes in the Commerce Act since the end of 2017 have also introduced a new requirement for the transfer of shares – whether between partners or outsiders. The new requirements were included in Art. 129 of the Commercial Code.

According to them, for the transfer of the shares, the company should have no outstanding salaries, indemnities and compulsory social security contributions of the employees, including employees, whose employment relationship was terminated within three years prior to the transfer of the shareholding.

However, it has not been clear from the changes what document the fulfilment of this requirement is, and the changes that have been made so far should be further modified to clarify the procedure.

Thus, in mid-February 2018, the law was supplemented, that in the Commercial Register, declarations in a form drawn up by the Company Manager and the transferor of the shares are submitted that the company has no outstanding and outstanding obligations of this kind. A model for such a declaration shall be drawn up by the Minister of Justice and the Minister of Labor and Social Policy. 

After application of the declarations, the transfer of the shares is entered in the Commercial Register, but the Registry Agency is obliged to immediately inform the Executive Department “Main Labour Agency”, which can verify the authenticity of the declared facts. In the event that discrepancies between the declared circumstances and the reality are found, GI EA notifies the Prosecutor’s Office of the possible involvement of the pshareively responsible detractors. that the company has no outstanding and outstanding obligations of this kind.

A model for such a declaration shall be drawn up by the Minister of Justice and the Minister of Labor and Social Policy.

After application of the declarations, the transfer of the shares is entered in the Commercial Register, but the Registry Agency is obliged to immediately inform the Executive Department “Main Labour Agency”, which can verify the authenticity of the declared facts. In the event that discrepancies between the declared circumstances and the reality are found, GI EA notifies the Prosecutor’s Office of the possible involvement of the pshareively responsible detractors. that the company has no outstanding and outstanding obligations of this kind. A model for such a declaration shall be drawn up by the Minister of Justice and the Minister of Labor and Social Policy. After application of the declarations, the transfer of the shares is entered in the Commercial Register, but the Registry Agency is obliged to immediately inform the Executive Department “Main Labour Agency”, which can verify the authenticity of the declared facts. In the event that discrepancies between the declared circumstances and the reality are found, Executive Department “Main Labour Agency”, notifies the Prosecutor’s Office of the possible involvement of the pshareively responsible detractors. but the Registry Agency is obliged to immediately notify the IA “GLP”, which can verify the authenticity of the declared facts. In the event that discrepancies between the declared circumstances and the reality are found, GI EA notifies the Prosecutor’s Office of the possible involvement of the pshareively responsible detractors. but the Registry Agency is obliged to immediately notify the IA “GLP”, which can verify the authenticity of the declared facts. In the event that discrepancies between the declared circumstances and the reality are found, GI EA notifies the Prosecutor’s Office of the possible involvement of the pshareively responsible detractors.

After the shares are transferred, a new general meeting is convened, in which the new owners – who have acquired the quality of partners – participate. At that meeting a decision is taken to accept and sign a new company contract and to enter the changes in the Commercial Register. Other decisions can also be taken at this meeting (seat, address of management, company, etc.). If the old partner was also a manager (except a partner), and if the new manager is also planned, a decision is made at that meeting to release the old and appoint the new partner as manager.

Entry in the Commercial Register is made by submitting an application Form A4, which is signed and deposited by the manager of the company. The law lacks the empowerment of the old shareholder who has ceased participating in the company, if he is not a manager; declare the entry of the change. The record of the new manager shall also be accompanied by documents related to this quality (specimen, declarations, etc.). Adoption of a new partner has effect vis-à-vis third parties from its entry in the Commercial Register.

Transfer of shares from Bulgarian LLC

A particular feature of the transfer of shares in such a company is that the owner is a single person. That’s why the only partner is called the sole owner of the capital. This sole proprietor can transfer all or part of its shares. In the second case, the company will be transformed into OOD.

For the transfer, a decision of the sole proprietor is required, which is reflected in a notarized record. Following is the conclusion of a contract for the sale of the shares, which is also certified notary. In the case of transfer of shares in EOOD no applications for the admission of a new partner are prepared and submitted as a party to the share transfer contract is the sole shareholder in the company. However,the requirements of Art. 129, para. 2 Commercial Code for lack of obligations are valid here as well.

After the transfer of the shares, the new sole owner takes a decision on the dismissal and appointment of a manager, the adoption of a new instrument of incorporation, as well as other changes upon request. If the sole proprietor transfers only part of his shares, these decisions are taken by all the partners.

Nature and characteristics of the transfer

With the transfer of shares, in practice, the membership of the company is transferred and its personnel is changed. Both membership rights and obligations, including non-material ones, are transferred. The transfer may only take place if the shares sold are not apprehended for the obligations of the owner and the divestment is entered in the TP. The transfer itself can take the form of a sale or sale, but it can also be shaped like a donation, a replacement, a contribution, etc. If the case vendor has not paid in full its share contribution, 130 and both parties to the transaction are jointly and severally liable for this outstanding obligation. Shares may be held in joint ownership (one share is sold to several persons), unless the Company Agreement prohibits this. Theoretically, where shares are held in joint ownership by several individuals, it is possible to transfer an ideal part of the share – Art. 132 ТЗ.

Register fees 

In order to carry out the procedure and record the transfer to the Commercial Register, different fees are payable. All notarial certification of the signatures and the content of the documents applied shall be paid in accordance with the Tariff of Notary Fees to the LIND.