Company types in Bulgaria
The most sufficient and popular type of the companies for business in Bulgaria are:
- Limited Liability Companies – OOD, EOOD
- Joint Stock Companies – AD, EAD
All types of the companies are subject to registration in (i) the Commercial register to the Registry Agency of the Ministry of justice, as the documents can be applied on-line, via Internet and (ii) the local tax office according to the headquarters of the company.
Limited liability company (OOD/ЕOOD)
Commercial company established by one or more individual or legal entities who are liable for the company’s obligations up to the amount of their contributions to the company’s registered capital. The company is liable also for its obligations and duties with its assets
- Capital of Ltd. – the minimum registered capital is BGN 2 (EUR 1), divided into shares with registered value of not less than BGN 1. In case of single member limited liability company (EOOD) all the shares belongs to the single member- individual or legal entity.
- Management – the person or the company owner of the capital appoints one or more Managing directors who managed and represent the company, as a quorum of one Managing Director is sufficient to represent the Company. In case of two or more Managing directors they can present the company solely or jointly.
The legal requirements for the foundation of an EOOD are the same as the requirements for an OOD.
An OOD of which the capital is owned by a single individual or legal person is called a single member limited liability company (EOOD).
Joint stock company (AD) (EAD)
Joint stock company (AD) is a company where the capital stock is divided into shares. The company is liable for its obligations and duties with its assets and the shareholders up to the amount of their contributions to the registered shares in the capital. Bulgarian law requires insurance companies and banks to be registered as AD. A joint stock company can be established by one or more individual or legal persons.
- Capital of JSC.-minimum capital of BGN 50,000 (EUR 25,000) divided into shares with registered value of not less than BGN 1.
- Management- the Board of directors of the company appoints one or more Executive directors between themselves who to managed and represent the company, as a quorum of one Executive Director is sufficient to represent the Company. According to the Article of Association of the company the Executive Director/s/ could be limited for certain decisions which can be taken only from the Board of the directors or by the General assembly of the shareholders.
The purpose of a holding company is to participate, under any form, in other companies or in their management. At least 25% of the capital stock of a holding company must be invested directly in subsidiary companies. A subsidiary (daughter) company is a company in which a holding company owns or controls, directly or indirectly at least 25% of the stocks or shares and is in a position to appoint, directly or indirectly, a majority of the Managing or executive (for JSC) directors
According to the Bulgarian Commercial Code, a holding company should be a joint stock company, a partnership limited by shares or a limited liability company.
A company formed jointly by a Bulgarian and a foreign partner is also known as a joint venture. There are no limitations regarding the extent of the foreign participation in a joint venture.
It can be established as one of the forms of the business entities mentioned in the Bulgarian Commercial Code.
A legal entity registered in another country can establish a branch in Bulgaria. This can be performed only if the necessary legal registration in the country of domicile has been completed. A registered branch is not considered as a legal entity.
Joint stock company (AD) is a company where the capital stock is divided into A legal entity registered in another country can establish a commercial representation in Bulgaria according to the procedure performed in the Bulgarian Chamber of Commerce in the capital Sofia. A registered commercial representation is not considered as a legal entity and cannot perform commercial activities.