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Register a limited company in Bulgaria

Set a limited company in Bulgaria is a company formed by a contract between two or more persons to carry out business under a common firm.Register a limited company in Bulgaria 

This is the situation, when one or more of the partners are jointly and fully liable for the obligations of the company, and the rest are only responsible to the extent of the payment agreed. Register a limited company in Bulgaria 

Тhe name of at least one full liability partner and should be of a national exclusivity.Register a limited company in Bulgaria

The contract for the establishment of a limited partnership shall be made in writing with the notarized signatures of all members and must contain the requisites set out in the provisions of Article 102 of the Commercial Law.

Requirements for set up of Limited company in Bulgaria?

The establishment of a limited partnership does not require any initial capital.The entry of a LP in the Commercial Register is based on an application form. It can be requested by any of the full liability partners or by a lawyer with an explicit written power of attorney.

The limited partnership has got two categories of members – full liability and limited liability partners. The management and representation of the company supposed to be made by the full liability partners. Register a limited company in Bulgaria 

The full liability partners do not make any financial or material contributions to the company.

On the other side, limited liability partners are required to make a financial or material contribution in the company but they have no right to manage.

The limited partnership is the second form of partnerships regulated in the Bulgarian Commercial Act. It differs from the general one in respect of the partners’ participation.

There are two different types of partners to the limited partnerships – ones that bear unlimited liability (general partners) and ones that are only limitedly liable (limited partners).

According to the Commercial Act, the limited partnership consists of at least one general and one limited partner.

The partnership is founded on the basis of a partnership contract.

The trade name of the formation must contain the name of at least one of the limited partners.

According to Article 101 (2) of the Commercial Act, a limited partner is deemed to bear unlimited liability, if his/her name is included in the trade name of a limited partnership.

The internal relationship between the limited partners is similar to the relationship between the partners of the general partnership, except for the rights and obligations.

The general partners are obligated to deposit a contribution.

This contribution determines their share in the future profits and their liquidations quatas. Also, limited partners are subject to the obligation of loyalty – without the consent of the other partners, one partner may not have got a rival commercial activity.

With regards to the external relationships of the company, the limited partners do not have got an important role.

Mainly, they do not participate in the management unless they are expressly nominated to.Register a limited company in Bulgaria 

According to Article 112 of the Commercial Act, limited partners bear unlimited liability for legal transactions that have been conducted in the name of the partnership before or after its foundation, whenever the creditor did not know that he was contracting with a limited partner.

Otherwise, limited partners bear liability toward the partnership’s creditors to the extent of the contribution made, even if it has not been paid completely.

This provision also applies regarding losses of the partnership. In General partners bear personal, unlimited, joint and several liability.

Setting up a Business company in Bulgaria

The General partnership is a type of personal partnership formed by two or more persons to carry out the business of trading under a common company. The shareholders of the company shall be jointly and fully liable for its obligations. The liability of the partners is personal, unlimited and subsidiary regarding the obligations of the general partnership. Due to the last peculiarity, the general partnership belongs to the partnerships. Also, the personal participation of the partners in a formed partnership is characterised by the personal participation in business operations.

The trade name of the general partnership consists of the family names or the companies of one or more of the partners with the indication “general partnership” or cooperation (“& Co.” and should be of a national exclusivity.) The establishment of a general partnership does not require any initial capital. The contract for the establishment of a general partnership shall be established in writing with notarized signatures of the partners and shall contain the requisites set out in the provisions of Art. 78 of the Commercial Law.

The entry of a general partnership in the Commercial Register is based on an application form. The application for registration of the GP in the Commercial Register shall be signed by all partners and the Constituent Act shall be applied to it. Entry of a GP can be requested by any of the partners or by the person (s) who represent the company, according to the Company Contract, as well as by a lawyer with an explicit written power of attorney.LAWYER, LAWYERS IN BULGARIA

Rights of the partners

The material rights are as following:

–  Right on shares in profit in the end of the financial year (in case there is a profit).

–  Right on liquidation quota, if in case of a termination of the company assets remain that may be distributed amongst the partners.

–  Right on compensation of the costs regarding the execution of business missions, as well as of all damages that were directly caused when executing business missions. Basically, there is a right on all statutory interest.

The immaterial rights are as following:

– According to Article 84 of the Commercial Code, each partner is entitled to take part in the management of the partnership’s business.

– Voting right – an irrevocable right of the company members;

– Right of examination of each partner that does not participate in the management. It is a protective right each partner is entitled to exercise.

Legal relationship between the partners and third parties

According to Article 89 (1) of the Commercial Code, each partner of the general partnership is a representative of the partnership. The partner acts as a body of the partnership and does not need an authorisation. Restrictions towards third parties are only effective after a respective record into the commercial register. The power of representation may be limited within the Articles of Partnership. It may be transferred to one or more partners but also to a third party.

The most essential particularity of the general partnership is the unlimited personal liability of each of the partners for the debts of the partnership. According to Article 88 of the Commercial Code, the liability is subsidiary and limited on the assets of each partner. The debtors may only try to satisfy their claims by single partners, if the satisfaction by the general partnership became impossible. Each partner may raise any personal objections, as well as any of the partnership’s objections. All claims of the partnership creditors against the partners expire 5 years after the termination of the partnership or the expulsion of a partner, unless another time period applies.

In reverse, the general partnership is not liable for the debts of the partners – neither as a natural person nor as a legal entity. However, there is legal possibility of partnership creditors to obtain the seizure of their claims on the liquidation quotas and the termination of the general partnership. That may happen if he/she unsuccessfully pursued enforcement of the partnership’s movable property within the past 6 months. In this case, according to Article 96. (1), the creditor may attach that partner’s liquidation share and request the dissolution of the partnership upon a notice in writing pursuant to the procedure set forth in Article 94.

The conditions regarding the termination of general partnerships are listed in Article 93 of the Commercial Code:

– Upon request by a written notice of one of the partners in consideration of a time period of at least 6 months, if the partnership was founded for an undefined period.

– Upon request of one of the partners, it may be dissolved by the court if another partner violated an essential obligation of the Articles of Partnership intentionally or by gross negligence. Or, if the fulfilment of such an obligation becomes impossible or if a partner acts against the partnership’s interests.

– By the private creditors of one partner.

In spite of the expulsion of one of the partners, it is possible to carry on the partnership. In this case, according to Article 97 of the Commercial Code, the remaining partners are obligated to pay the share of the expulsed member in the company’s assets. In case of death of one of the partners, his/her heirs may take participation in the partnership, if the Articles of Association allow so.