Joint Stock Company in Bulgaria
A joints Stock company is a business entitie in which the capital is divided into shares. The business is accountable before its creditors with its assets. A joint stock company (JSC) may be found by one or more natural or legal persons. The minimum share capital of a JSC is BGN 50,000 which is approximately € 25,500.
Joint Stock Company registration conditions
The JSC is to be registered by at least two persons. The only exception is the single owner JSC which is founded by one person. The founders may be natural and legal persons. A founder is each person who subscribed shares during the foundation meeting. Each founder is severally accountable against third parties for liabilities which incurred on their behalf before the foundation of the enterprise. If there were shares subscribed previous to the inscription, the members of the business must make an advance payment.
The registration procedure is complicated and comprises several phases. First, there is the organization meeting where all persons who want to subscribe to shares are present. As provided in Article 163 (3) HG the foundation meeting must take decisions such as:
- Concerning the establishment of the Company,
- To accept the statutes particularly given by Article 165 HG,
- To establish the amount of the foundation expenditures,
- To entitle a Supervisory Board resp. a Board of Directors.
The registration in the commercial register is the last condition for the establishment of the Joint Stock Company. It involves:
- The approval of the statutes,
- That all shares of the capital have been subscribed,
- That the contribution provided by the statues has been contributed with not less than 25 % of the share value,
- That a Supervisory Board resp. a Board of Directors has been entitled,
- That the other legal requirements have been met.
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JSC foundation with the Commercial Register takes approximately 2 working days. Before starting business activity, the company must fill an application to the National Revenue Agency in order to get the EU VAT number. The procedure to get an EU VAT number takes approximately 2 weeks.
The minimum share capital is 50 000 BGN and 25% of the capital have to be deposited at the time of the registration.
Obligations represent loans given by the company’s bondholders. Obligations are securities which contain at least two demands–the primary debt and the interest. The bondholder is a creditor and not a member of the business. He does not take part in the management of the company, nor may he be accountable for the consequences of the business activity.
The necessary documents for the incorporation of JSC with one-tier management system are:
- a standard form application for entry of circumstances concerning a JSC;
- an Articles of Association of the company dully signed by the shareholders or the sole owner of the capital;
- affidavits under Article 160, para. 2 of the Commercial Law by the founders of JSC;
- Minutes of a Constitutive Meeting of JSC;
- a list of the shareholders and the shares of the capital subscribed by them;
- affidavits under Article 234 of the Commercial Law by the members of the Board of directors;
- a Board of directors decision to assign an executive manager of the company;
- a Signature sample of the executive manager/s;
- a standard form affidavit by the executive manager that the circumstance to be registered with the Commercial Register are true and genuine;
- a Power of attorney issued to the lawyer that shall file the documents with the Commercial Register;
- a bank certificate evidencing the payment of the registered capital;
- a bank receipt evidencing the payment of the statutory fee for registration of the share transfer with the Commercial Register.
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