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15.07.2022

Company registration in Bulgaria

Stoeva Tchompalov & Znepolski could help you to set up your business in Bulgaria by advising and assisting you in the entire process of establishment of your own company.

What is company?  

The company is an association of two or more persons for carrying out commercial transactions with common funds for the purpose of financial profit of its partners/shareholders. The company is a separate legal entity, established to conduct certain commercial activity. According to the Bulgarian legislation there is five types of companies, as follows: 

  • General partnership (GP or SD);
  • Limited partnership (LP or KD);
  • Limited liability company (Ltd., LLC. or OOD);
  • Joint stock company (JSC or AD);
  • Partnership limited by shares (PLS or KDA).

The Bulgarian law allows the incorporation of a company with only one owner (shareholder), which could be natural or legal person. This is applicable only with the incorporation of limited liability company (OOD) or joint stock company (AD) as they are called “single-member limited liability company” (EOOD) and single-member joint stock company (EAD). 

What type of company to register?

Your choice depends mainly on the business you will carry on, its size, scope, whether you will have partners and most important the way how you will be responsible for the company’s obligations. 

The most popular types of companies in Bulgaria are limited liability company (OOD/EOOD) and joint stock company (AD/EAD) due to the limited liability of the shareholders towards the creditor of the company. This means that their partners/shareholders are liable for the company’s obligation up to the amount of their contribution at the company’s capital. In the other types of companies (general partnership, limited partnership or partnership limited by shares) all or part of the partners are liable without limitation, which means that they will be liable not only up to the amount of their contribution at the company’s capital but also with their personal assets. 

What are the main differences between limited liability company (OOD) and joint stock company (JSC)?

A limited liability company is the preferred option if you are starting small or medium business, a “start-up” company or a business that will rely on a smaller initial investment and/or certain personal relationship between the partners. A joint stock company is the preferred option if you are starting a large business projects or business that are orientated towards attracting more capital and investments. 

Main differences:

Limited liability company (OOD): Joint stock company (AD):
  • The capital is divided into company’s shares (does not match to the definition of security as tradable financial instrument);
  • Minimum capital– BGN 2 Bulgarian leva;
  • OOD is a closed type of company – the transfer of company’s shares (accepting a new shareholder) requires the consent of the rest of the partners;
  • The partner has certain obligations to participate in the management of the Company;
  • A simpler management system allowing one person (general manager) to manage the Company;
  • No possibility for the Company to issue Bonds;
  • No possibility the Company to became a public company; 
  • The capital is divided into shares (stocks) as security (fungible and tradable financial instrument);
  • Minimum capital – BGN 50 000 Bulgarian leva;
  • The shares are freely transferable without the consent of the other shareholder to be required unless otherwise is agreed between the shareholders;
  • The shareholder has not obligation to participate in the management of the Company;
  • More complicated management system requiring at least 3 members (board of directors) to manage the Company;
  • the Company could issue Bonds (to raise monetary funds in the form of loan);  
  • Only joint stock company (AD) could be a public company, i.e. the company’s shares to be traded on a regulated market such as Bulgarian Stock Exchange;
  • Certain commercial activity could be carried out only by joint stock company (AD) such as banking and insurance; 

What are the stages for establishment a Company? 

The stages for establishment a Company include:

  • Incorporation of company - compliance of a certain legal procedure, adopting and signing of certain documents; 
  • Registration of the Company before the Bulgarian Commercial register – submission of specific application for registration;
  • Entering the Company at the Bulgarian Commercial register – entering the Company into the Bulgarian Commercial register after the application is reviewed and accepted.  

How the team of Stoeva Tchompalov & Znepolski could assist you?

  • Professional advice for the type of the Company, which best fit for achieving your business goals;
  • Drafting all required documents for incorporation of a Company;
  • Representation before the Registry agency and its Commercial register, including submission of the necessary application for registration of your Company; Assistance and support with opening a bank account;
  • VAT registration of your Company;
  • Assistance with subsequent changes of the Company and/or announcement of acts in the Commercial Register;

If you have any additional questions do not hesitate to contact us.