Legal Guide & Entities

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.

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.