Every foreigner in Bulgaria can generally start a business regardless of whether or not he has a Bulgarian residence permit. BG Advise Corporate Services can easily establish a company formation in Bulgaria. In the country, there are various types of corporate formations that can be registered. Each has its own particulars, which are described below.
Types of Company Formations in Bulgaria
A registration of the company in the Bulgarian Commercial Register is an important precondition for starting a company in Bulgaria. The Commercial Register is a single, centralized digital registry aimed at facilitating the establishment of companies and reduce corruption.
The following types of company formations are available according to Bulgarian law:
Lіmіtеd Lіаbіlіtу Cоmраnу
The Bulgarian Limited liability company is probably the most popular and common form of business in Bulgaria. The formation is also referred to as LLC in the US as well as Ltd. in the UK. One or more shareholders who have limited liability in the amount of their deposits in the company may set up this type of company.
Because of the minimum capital requirement of 2 BGN, which is about 1 EUR, the limited liability company is a preferred business formation type.
An alternative of LLC is a single-member Limited Liability business formation. The full capital of the company shall in this case be owned by one of the partners. Foreigners may be appointed as managers.
In any case, it is good to consider the following issues in order to set up a Bulgarian LLC formation:
- Name of the company
- Partner/s
- Scope of company’s activity
- Registered address
- Amount of initial capital
- Manager/s
The registration procedure for the formation of a limited company requires:
- A partnership agreement in writing form. It must be signed personally by the founders or by a representative with explicit power of attorney.
- Listing in the Bulgarian Commercial Register.
- A deposit of the initial capital. A bank account opening is required.
- An appointed manager of the company.
- Registration in the Bulgarian Registry Agency.
Јоіnt-ѕtосk Cоmраnу Formation
The formation of Joint-stock enterprises is mainly preferred by capital companies. This is an option for large companies, intending to start their business in Bulgaria.
In Bulgaria the minimum capital required for the opening of the Joint-stock is BGN 50 000 (approximately 26 000 EUR). The capital is divided into shares, the holders of which may be individuals and businesses. Each share certifies its holder’s nominal value in the share capital of the company and grants one vote to the shareholders ‘ general assembly.
The Joint-stock Company bears responsibility for its own assets to its creditors The composition of the corporation must consist of one or more registered shareholders (individuals or companies) and at least three board members. Shareholders shall not be obliged to take part in the management. As to their obligations, they are regulated by the Articles of Incorporation/Commercial Law.
For the management of a Joint-stock company are required:
- General meeting of the shareholders;
- Board of Directors (in case of single-staged managing system) or Supervisory Board and Management Board (when the managing system is two-stage)
To register a Joint-stock company in Bulgaria, the following is necessary:
- An election of an available business name.
- A Meeting of Incorporation.
- Election of the Board of Directors, respectively Supervisory and Management Boards.
- Deposit of the company’s capital into an opened bank account.
- Listing the company in the Bulgarian Commercial Register.
- Registration in the Bulgarian Registry Agency.
General Partnership
A General Partnership is a kind of company established under a shred registered trade name between two or more individuals wishing to manage an efficient transaction. The trade name should include one or more of the partners ‘ family names or the trade names of their existing companies.
In general, the structure of General Partnership formation consists of shared ownership, shared returns and risks and shared governance. The partners are therefore responsible for all their assets. They may have rights and obligations both material and non-material. A listing of the company on the Bulgarian Commercial Register is the first step towards establishing a General Partnership.
Limited Partnership
A company creation of Limited Partnership type may be formed by two or more persons wishing to conduct effective business transactions under a shred registered trade name. On the basis of a partnership contract, a Limited Partnership is formed.
The main difference between the Limited partnership and the General Partnership is how partners will engage in the formation A limited partnership includes a solidary and unlimited liability for the obligations of one or more of of the partners, and the others of them have responsibility for the amount of the contribution they have contracted. So partners can be general partners –the ones that bear unlimited responsibility and limited partners–the ones that have limited liabilities.
The trade name of the partnership must contain the name of at least one of the limited partners. Only general partners can register the Limited Partnership in the Bulgarian Commercial Register.