Types of Bulgarian Companies

There are several types of company appropriate for conducting business in Bulgaria. According to the Commercial Law issued by The Supreme Court of Cassation of the Republic of Bulgaria, entrepreneurs can choose between five main types of business. Article 64, chapter 10, division 3, mentions their general characteristics.

a) Bulgarian General partnership (subiratelno druzhestvo)

A general partnership is a company formed by two or more persons for the purpose of conducting commercial transactions by occupation, under a joint trade name. This kind of enterprise does not require a minimum amount of capital. The partners bear joint and unlimited liability, beyond the amount invested by each one. Profits are shared equally, and each general partner has an equal right to participate in the management and control of the business.

b) Bulgarian Limited partnership (komanditno druzhestvo)

This organization is established by one ore more general partners who manage the project, and limited partners who invest money, but have limited liability in conformity with the amount of the agreed upon contribution. Usually limited partners receive income, capital gains, and tax benefits, similar to a dividend. The general partner collects fees and a percentage of the income and benefits, previously established.

c) Bulgarian Limited liability company (drujestvo s ogranichena otgovornost)

The limited liability company is a flexible form of business enterprise, blending elements of partnership and corporate structures. It is founded or owned by one or more persons, including foreign or legal persons. The shareholders are liable for the company's obligations with their contributions to the capital of the company. Each partner has to pay up, or contribute its interest, and the failure to do that, constitutes grounds for the expulsion of the partner. Partners share the rights to take part in the management of the company, in the distribution of profits, to be informed of the company's affairs, to review the company's books and to liquidation procedures. This kind of business entity must have a minimum of 2 BGN (Bulgarian Lev, the currency of Bulgaria) authorized capital.

d) Bulgarian Joint-Stock Company (aktsionerno druzhestvo)

The capital stock of this kind of company is divided into shares, and cannot be less then 50.000 BGN. A share has a minimum nominal value of 1 lev and it is indivisible. The company registered for this kind of business can increase its capital stock by issuing new shares, or reduce it by using shares with a lower nominal value, or by cancellation of the shares. The shareholders are obligated to contribute for the shares subscribed, and in case this stipulation is not respected, the shareholder owes interest. The company's organs are divided in two: the meeting of the shareholders, and the board of directors. The joint-stock company is liable before its creditors with its assets and has to run full accounting. The annual financial statement is audited by the registered auditors appointed by the General Meeting.

e) Bulgarian Partnership limited by shares (komanditno druzhestvo s aktzii)

This kind of partnership is defined by a transitional entity between a joint-stock company and a limited partnership. The general partners have unlimited liability, while a minimum of three limited partners have a liability influenced by their share contribution. The general partners form the company and have the right to select their limited partners from subscribers. The provisions and the organs of the partnership limited by shares are applied as in the joint-stock company.