Numerous entrepreneurs from overseas decide for business formation in Bulgaria for reasons like a fast incorporation, a stable economy, a prolific business environment and varied encouragements offered by the government for foreign investors. Business persons interested in the types of Bulgarian companies can choose one of the five major forms the South-Eastern European country regulates for commercial corporations:
•limited liability company (LLC);
•joint stock company (JSC);
•partnership limited by shares.
Our company formation agents in Bulgaria are at your disposal with information and assistance at the time of company incorporation, regardless of the chosen structure for business.
Characteristics of the most common types of Bulgarian companies
The most common organizations are the limited liability companies and the joint stock ones. Both types have differences, as well as common characteristics. The LLC and the JSC companies can be owned or established by one or more persons or legal entities. The number of the shareholders must be at least one. These two types of Bulgarian companies require different share capital. A limited liability company requires a capital of at least 2 BGN (1 EUR). The joint stock business entity must have at least BGN 50,000 share capital, with a minimum nominal value of 1 BGN per share.
There is a difference regarding the companies bodies. A limited liability company has a general meeting of stakeholders and at least one manager. In case of a joint stock company, besides the general meeting of shareholders, there is also a board of directors (with a minimum of three persons), along with a supervisory board and a management board, both with at least three members. An LLC founder must contribute his interest, under the rule of being expelled from the association for not doing so. All partners have equal rights concerning the management, the profit and the company’s affairs and the liquidation procedures.
The shareholders of a joint stock company have a liability limited by their contribution. The capital stock can be increased by issuing new shares, but it can also be lowered or canceled. Once a shareholder subscribes for shares, it is mandatory to contribute for them, otherwise, he owes interest. While an independent audit is not needed for an LLC regarding the annual accounts (with some exceptions), this one is mandatory for a JSC.
What information can be found in the Articles of Association?
The Articles of Association are the main documents of a company, and these contain the following information:
•the name of the owners, plus details about their nationality;
•the name of the company, the business address of the firm in Bulgaria;
•the capital contribution of each member of the company in Bulgaria;
•the name of the board managers and their responsibilities;
•the voting rights and the mode of election of company members.
Who can set up partnerships in Bulgaria?
TheBulgarian limited partnership represents an entity set up by one or more partners, but with two certain categories: general partners liable for the business liabilities and limited partners who invest money. The latter receive benefits (capital gains, income, and tax benefits) similar to dividends. The fees and a percentage of the income are collected by the general partner.
A Bulgarian general partnership is formed by minimum two persons, under a joint trade name, to develop commercial transactions by occupation. It doesn’t require a minimum share capital and the partners share unlimited liability regardless of their investments in the partnership. All the partners participate equally in the business administration and profit share.
A Bulgarian partnership limited by shares represents a mixture between a joint stock company and a limited partnership. The business form must have at least three limited partners chosen by the general partners from subscribers. Their liability is influenced by the share contribution.
If you need more details about how you can set up a company in Bulgaria, you may get in touch with our agents in company formation who will help you open a company in this country. We may also help you with information if you are interested in opening a business in Portugal, Austria or Liechtenstein, through our local partners.
We invite you to watch a video about the types of companies available for incorporation in Bulgaria:
Can I set up a subsidiary in Bulgaria?
Yes, foreign companies can establish subsidiaries in Bulgaria which can operate under the rules of limited liability companies or joint stock companies. Subsidiaries in Bulgaria are registered at the Bulgarian Commercial Registry as soon as the Articles of Association are provided. In respect to the Companies Act, our team of advisors can assist foreign investors in setting up their companies, whether they are branches, subsidiaries or any other structures.
What is a shelf company in Bulgaria?
A shelf company in Bulgaria is known as a ready-made company which is already registered on the market and ready for business activities. This runs as a limited liability company or as a joint stock company, depending on the type of operations the foreign investor wants to establish in the market. Among the benefits of a shelf company in Bulgaria, we mention the fast operation on the market, as there is no need for approvals or incorporation time.
We invite you to get in touch with us for complete information about the available company types in Bulgaria.
Call us now at +359 888 350 643 to set up an appointment with our specialists in company formation in Sofia, Bulgaria. Alternatively you can incorporate your company without traveling to Bulgaria.
As our client, you will benefit from the joint expertize of local lawyers and international consultants. Together we will be able to offer you the specialized help you require for your business start-up in Bulgaria.