Limited Liability Company in Bulgaria (Ltd.)
Limited liability company (LLC) is a type of a capital company which can be established by two or more Bulgarian and foreign physical or legal persons. The management structure of a Ltd. consists of a General Assembly of shareholders and one or more managers who manage the company and represent it in respect to third parties.
A limited liability company may be formed also by one person and in this case it is a single/sole-member limited liability company (SMLtd) A Ltd. company is established on the basis of a company contract that ought to be concluded in writing. The name of the company shall contain the words “Limited Liability Company” or the abbreviation “Ltd.”, and should be of a national exclusivity.
The entry of a Ltd. in the Commercial Register is based on an application form. It must be stated personally by the Manager/Managers of the company or a lawyer with an explicit written power of attorney. Regarding the Bulgarian legislation, only a physical person can be a manager of Ltd. The manager may be a partner or a third party. There are no restrictions on a foreign person to be appointed as a director of a Ltd.
The capital of a limited liability company cannot be less than 1 Euro (minimum 2 BGN). It consists of the shares of the partners which must not be less than 1 BGN/each. Partners can bring both cash and non-cash contributions. Non-cash contributions are subject to mandatory assessment by three independent experts appointed by the Registry Agency.
The shares of a Limited liability company are not a subject to trading. They can be transferred with a notarized contract for transfer of shares. The one between shareholders does not require a decision of the General Meeting. Otheriwse, the transfer of shares to a third party, as well as the adoption of a new partner does require such a decision.
Rights and obligations of the shareholders
According to the Bulgarian Law, the members of a Ltd. have got rights such as the following: right to dividend and liquidation quota, amoral rights like right to participate in the management of the company, as well as to be elected as a manager. Immaterial rights include: accessing company’s information, supervising the meetings of the General Assembly, etc. Shareholders have got a financial obligation – it is payment of contributions. Non-compliance with these obligations could result in exclusion of a partner. Immaterial liabilities include participation in the management of the company, implementation of decisions taken by the General Assembly. Competition is absolutely prohibited both for the partners and the manager.
Registration of a Limited Liability Company/ sole-Owner LLC
Usually the legal framework for company set up in Bulgaria is following – Commerce Act; Commercial Register Act etc.. The competent authority is the Bulgarian Commercial Register with the Registry Agency.
Now we would like to inform you for all nessesery legal steps of the entire procedure of company registration. Our legal work start from the same beggining of preparation of the paperwork & documents as:
1) Checking up with the electronic register of the Commercial Register and/or reservation of a business name.
2)Holding of an Incorporation Meeting, adoption of a Memorandum of Association or an Act of Incorporation, appointment of managing director/s.
3)Depositing the company capital into a special capital raising account (the minimum capital amount is 1 Euro (minimum 2 BGN).
4) In case of any specific business, an authorisation by the competent authority shall be provided when filing the documents with the Commercial Register.
The list of the documents, which are required for every company registration is following :
– Preparation & drafting of Application form for registration.
– Preparation & drafting ofMemorandum of Association or Act of Incorporation.
– Preparation & drafting of Minutes of the Meeting of Incorporation of the company.
– Preparation & drafting of docuiment for Specimen *(signatures) of all appointed managing directors/ managers of the company.
– Preparation & drafting of declaration pursuant to Article 142 of the Commerce Act signed by each of the appointed managing directors.
– Preparation & drafting of declaration pursuant to Article 141, paragraph 8 of the Commerce Act signed by each of the appointed managing directors.
– Preparation & drafting of Certificate of the deposited capital issued by a bank.
– Preparation & drafting of resolution of the body managing and representing a member who is a legal entity.
– Preparation & drafting of Certificate of good statement from the relevant business register regarding a member who is a foreign legal entity.
– Preparation & drafting of document evidencing payment of the state fee for incorporation of a limited-liability company.
– Preparation & drafting of declaration under Article 13, paragraph 4 of the Commercial Register Act signed by the applying managing director.
– Preparation & drafting of relevant license or permit according to any special law on the performance of a specific business.
After the first initial steps of preparation of documents, we would like to advise you for the legal terms of the entire registration process :
For submitting an application for registration or deregistration before the Bulgarian commercial register, we need about 5-7 business days after its acceptance of the documents