Corporate and Commercial Law
Business Relocation in Bulgaria
Registration of a commercial representation
A commercial representation in Bulgaria can be opened by any foreign legal entity that has the right to carry out commercial activities under its national legislation.
The commercial representation of a foreign legal entity cannot carry out business activities, as its activities are limited to representative functions such as advertising, market research, establishing contacts with partners and coordinating the company's activities in Bulgaria.
The procedure for registering a commercial representation of a foreign legal entity is used as one of the options for obtaining a residence permit in Bulgaria for foreign citizens.
The commercial representation is registered in the Unified Commercial Register at the Bulgarian Chamber of Commerce and Industry (BCCI), after which it is also entered in the Bulstat register at the Registry Agency and receives a single identification code (BULSTAT).
Registration of a branch of a foreign legal entity
Foreign legal entities that are registered as traders in the country where their registered office is located can also carry out commercial activities in the Republic of Bulgaria by registering a branch in the Commercial Register at the Registry Agency. There are no restrictions on the number of branches that a foreign legal entity can register.
The procedure involves submitting a number of documents, including a copy of the company registration certificate, a declaration of the planned activities of the branch and proof of the appointment of a representative in Bulgaria.
Registration of a branch of a foreign non-profit legal entity (NFLE)
A branch of a foreign NPL acquires the status of a legal entity upon its entry in the public Register of Non-profit Legal Entities (NFLE) at the Registry Agency.
Registration of a branch of a foreign non-profit legal entity (NFLE)
Registration of a branch of a Bulgarian legal entity
A Bulgarian legal entity may open a branch outside the settlement where its registered office is located.
The registration of a branch of a Bulgarian legal entity is carried out in the Commercial Register. However, only one branch may be opened in one settlement. An exception is provided only for banks and insurance companies. They may register more than one branch in one settlement, including where their registered office is located.
Registration of an association
An association is a non-profit legal entity (NPO), which can be established: for private or public benefit. Each association acquires its status as a legal entity upon its entry in the Commercial Register and the Register of Non-profit Legal Entities (NPO).
Founders can be both legal entities and individuals. The number of founders varies, depending on the type of association. If it is established for private benefit, the founders are at least 3 persons. If it is established for public benefit, the number of founders is at least 7 persons.
Registration of a foundation
A foundation is a non-profit legal entity (NPO). A foundation is a personified property that is dedicated and provided free of charge to achieve non-profit goals and to which the features of an independent legal entity are attributed.
The foundation can be established during life by donation or by will in the event of death, by which property is provided free of charge for the achievement of the intended non-profit purpose of the foundation. The founder can be one person, and there is no limit to the maximum number of founders. The persons who establish the foundation are not its members.
Registration of an LLC
A limited liability company (LLC) is a type of capital commercial company that can be established by one or more persons who are liable for the obligations of the company with their share contribution to the company's capital. The founders of an LLC can be both individuals and legal entities, and individuals must be legally capable. The minimum capital for the establishment of an LLC is 2 leva, with each of the partners owning a certain number of shares, which cannot be less than 1 leva.
Through an OOD, any activity that is not prohibited by law can be carried out (there is a restriction regarding the performance of certain activities such as banking, insurance, etc. activities, for which permits and licenses are required).
The registration of an OOD is carried out in the Commercial Register at the Registry Agency after preparation of all necessary documents. The law allows partners in an LLC to start commercial activities even before the company is registered in the Commercial Register, but it is mandatory to indicate when making transactions that the company is in the process of being established. The persons who have concluded the transactions are jointly and severally liable for the obligations assumed.
Registration of an LLC
A sole proprietorship (LLP) is a capital commercial company, in which the owner of the capital bears property liability up to the amount of the company's capital. The minimum capital is 2 leva, and the shares cannot be less than 1 leva.
In an LLC, the sole proprietor of the capital manages and represents the company personally or through a manager appointed by him.
Registration of an LLC is carried out in the Commercial Register at the Registry Agency after preparing all necessary documents.
Registration of an ET
Registration as a sole proprietor (ET) is suitable for persons conducting commercial activities in Bulgaria. The registration procedure is slightly more complicated than that for self-insured persons, as it is carried out in the Commercial Register. The sole trader independently pays his social security contributions on the actual profit received, with the calculation of contributions based on the difference between income and expenses, excluding legally recognized expenses.
The sole trader is fully liable with his personal property for the obligations of the business. The advantages of an ET include the simpler registration and deregistration procedure compared to an EOOD, the absence of the obligation to submit financial statements and the calculation of taxes and social security contributions on the actual profit made, which is convenient for activities with significant costs.
Change of circumstances in commercial companies
Change of manager or procurator
A change in the way the company is managed can occur when, instead of one manager, two or more persons are elected to represent and manage the company jointly or separately and vice versa – from several managers, only one remains, as well as a procurator of the company is appointed or dismissed.
When changing the current manager/procurator, it is necessary to conclude a new written contract for assigning management on behalf of the company through a person authorized by the General Meeting or by the sole owner of the company's capital.
Notification of the changed circumstances must be made in the Commercial Register at the Registry Agency.
Change of company name/name
This change requires a decision by the General Meeting or the sole owner of the company's capital. For the procedure, a new company agreement or memorandum of association is prepared, which, together with the other accompanying documents, are submitted for entry in the Commercial Register to the Registry Agency.
Change of registered office/address of management of the company
The change includes a decision by the General Meeting of the company to amend the company agreement or memorandum of association regarding the circumstances subject to change.
The procedure aims to enter changes in the Commercial Register to the Registry Agency relating to the registered office and address of management of the company, which occurred after the registration of an OOD/EOOD.
Change of scope of activity
A change in the scope of activity of the company is required especially when the scope of activity is subject to a special regime and this is a condition for registration or entry in the Commercial Register. It is necessary to hold a General Meeting at which a decision to change the scope of activity of the company is taken. The general meeting must also decide to amend the articles of association or the articles of association regarding the circumstances subject to change. The change of circumstance is applied for entry in the Commercial Register at the Registry Agency.
Reduction/increase of capital
The increase in the capital of an EOOD/OOD represents an increase in its numerical value, by increasing the size or number of shares or the number of partners. The purpose of the increase depends on the specific needs and business policy of the company and may be related to the expansion of its activities, the need for new funds, achieving legal requirements for a minimum amount of capital for carrying out certain activities, etc.
The Commercial Law regulates three ways to increase the capital of an E/OOD:
1. Increase in shares
2. Registration of new shares
3. Admission of new partners
Transfer of company shares - sale
The company shares of each partner in an OOD can be transferred according to the procedure specified in the law and by the partners.
The transfer of company shares from one partner to another is carried out freely, and to third parties - subject to compliance with the requirements for admission of a new partner and if there are no unpaid wages, compensations and mandatory social security contributions of workers and employees, including workers and employees, the employment relationships with which were terminated up to three years before the transfer of the company share.
Transfer of company shares is carried out after preparing all necessary documents by applying for entry in the Commercial Register at the Registry Agency.
Transformation of commercial companies
Merger
A procedure in which one or more companies are terminated without liquidation and transfer to another company all their assets and liabilities in return for a share in the capital.
Merger
A procedure in which one or more companies are terminated without liquidation and transfer to another company established by them all their assets and liabilities in return for a share in the capital and under the conditions of universal succession.
Division
A procedure in which the entire commercial enterprise of one company is transferred to two or more receiving or newly established commercial companies, its legal successors for the relevant part. The transforming company is terminated without liquidation.
Division
A procedure in which a part of the commercial enterprise of one company, which is not terminated, is transferred to one or more receiving or newly established commercial companies, its legal successors for the relevant part.
Liquidation of commercial companies
Liquidation of LLC/LLC
he procedure is characterized by performing specific actions to register circumstances regarding the termination and liquidation of commercial companies, taking about 8-10 months and including several stages:
1. Termination of the company's activities.
2. Notification of the National Revenue Agency (NRA) and the National Social Security Institute (NSI) of the termination of the company's activities.
3. Announcement of the liquidation of the company in the Commercial Register at the Registry Agency.
4. Sending an invitation to the company's creditors to present their claims.
5. Completion of the liquidation - the liquidator draws up a balance sheet at the time of the company's termination and an explanatory report to it, as the remaining assets of the company after satisfying the creditors must be distributed;
6. Deletion of the company from the Commercial Register at the Registry Agency.
In order to liquidate the company, it is necessary to submit a special application to the Commercial Register at the Registry Agency together with the necessary documents and acts that are subject to registration upon termination and liquidation of the company.
The termination of a company is an extremely complex process that requires a thorough legal analysis of the process, made after detailed information is provided by the client, in order to take action and achieve the purpose of the procedure.
Deletion of associations and foundations
The liquidation proceedings of an association/foundation take about 8 months and go through several separate stages:
1. Termination of the activities of the association/foundation and initiation of the liquidation procedure;
2. Notification of the NRA of the termination of the activities;
3. Entry of the commencement of the liquidation procedure in the Register of Non-Profit Legal Entities (RNLE) at the Registry Agency;
4. Announcement of an invitation to creditors in the RNLE;
5. Notifying the NSSI of the liquidation and submitting the legal entity's payroll and other labor documents (even if there were no employees appointed, the NSSI is notified of the liquidation procedure);
6. Completion of the liquidation - the liquidator must draw up a liquidation balance sheet from the start date of the liquidation to its end date, as well as an explanatory report to it, as well as the remainder after satisfaction of creditors, the property of the legal entity must be distributed;
7. Deletion of the association/foundation from the Register of Non-Profit and Non-profit Organizations.
Assistance in the relocation of a business in Bulgaria
Legex Consulting will help you go through all stages of the relocation of your business in Bulgaria, starting from the preparation of documents and ending with registration in the Commercial Register. Contact us in the most convenient way for you, including Telegram.
Assistance in the relocation of a business in Bulgaria
