Corporations
Find the UK and US counterparts of the two most popular types of company in Bulgaria are the limited liability company (дружество с ограничена отговорност) and the joint stock company (акционерно дружество).
Bulgarian limited liability company
The limited liability company has the advantage of a relatively low minimum capital requirement (BGN 5,000) and simple corporate management structure. However, operations like the admission of new shareholders or increase/ reduction of the company’s capital can be carried out only with the consent of a qualified majority (or unanimity) of all shareholders, which significantly decreases the company’s flexibility.
A limited liability company is founded by one or more natural or legal persons upon registration with the Commercial Register at the Registry Agency at the Bulgarian Ministry of Justice. A major requirement for registration is filing the “articles of incorporation”, which specifies, among other things:
1) the business name, seat and address of management of the company;
2) the object and term of operation;
3) the names of the shareholders;
4) the amount of the registered capital;
5) the amount of each shareholder’s share participation;
6) the management structure;
7) the rights and obligations of the shareholders.
The company’s management structure consists of:
a) general meeting of the shareholders;
Bulgarian joint stock company
The joint stock company has the advantage of less personal engagement in the operation of the company on part of the shareholders and of the lack of statutory restriction on trading its shares publicly. On the other hand, its management structure is more complex and the required minimum capital for incorporation is BGN 50,000.
A joint stock company is founded by one or more natural or legal persons upon registration with the Commercial Register at the Registry Agency at the Bulgarian Ministry of Justice. In order for the registration to be effected a constituent assembly of the shareholders should have been held, which should have adopted unanimously:
a) the resolution to found the company;
b) the statutes of the company;
c) the subscription of all shares;
d) the management structure.
The above resolutions should be incorporated into the company’s constituent act and signed.
The company’s management structure consists of:
a) general meeting of the shareholders;
b) board of directors (one-tier form of management), supervisory board and board of directors
(two-tier form of management).
The shares of the joint stock company are publicly tradable.
In the English-speaking world the “joint stock company” was the forerunner of contemporary business entities such as US corporation and UK public limited company. It used to be a financing model that allowed companies to raise large amounts of capital and lower the risk by diversifying the contributed capital among different ventures.
The Bulgarian Commercial Act distinguishes between the terms “дялове” and “акции”; this difference is not accurately reflected in their translation as “shares” and ”stocks” respectively. In the English-speaking world “stock” usually refers to the capital raised by the issuance of “shares”; in the USA it is commonly used as a synonym for “share”, especially in the plural “stocks”.
Bulgarian limited liability company
The limited liability company has the advantage of a relatively low minimum capital requirement (BGN 5,000) and simple corporate management structure. However, operations like the admission of new shareholders or increase/ reduction of the company’s capital can be carried out only with the consent of a qualified majority (or unanimity) of all shareholders, which significantly decreases the company’s flexibility.
A limited liability company is founded by one or more natural or legal persons upon registration with the Commercial Register at the Registry Agency at the Bulgarian Ministry of Justice. A major requirement for registration is filing the “articles of incorporation”, which specifies, among other things:
1) the business name, seat and address of management of the company;
2) the object and term of operation;
3) the names of the shareholders;
4) the amount of the registered capital;
5) the amount of each shareholder’s share participation;
6) the management structure;
7) the rights and obligations of the shareholders.
The company’s management structure consists of:
a) general meeting of the shareholders;
Bulgarian joint stock company
The joint stock company has the advantage of less personal engagement in the operation of the company on part of the shareholders and of the lack of statutory restriction on trading its shares publicly. On the other hand, its management structure is more complex and the required minimum capital for incorporation is BGN 50,000.
A joint stock company is founded by one or more natural or legal persons upon registration with the Commercial Register at the Registry Agency at the Bulgarian Ministry of Justice. In order for the registration to be effected a constituent assembly of the shareholders should have been held, which should have adopted unanimously:
a) the resolution to found the company;
b) the statutes of the company;
c) the subscription of all shares;
d) the management structure.
The above resolutions should be incorporated into the company’s constituent act and signed.
The company’s management structure consists of:
a) general meeting of the shareholders;
b) board of directors (one-tier form of management), supervisory board and board of directors
(two-tier form of management).
The shares of the joint stock company are publicly tradable.
In the English-speaking world the “joint stock company” was the forerunner of contemporary business entities such as US corporation and UK public limited company. It used to be a financing model that allowed companies to raise large amounts of capital and lower the risk by diversifying the contributed capital among different ventures.
The Bulgarian Commercial Act distinguishes between the terms “дялове” and “акции”; this difference is not accurately reflected in their translation as “shares” and ”stocks” respectively. In the English-speaking world “stock” usually refers to the capital raised by the issuance of “shares”; in the USA it is commonly used as a synonym for “share”, especially in the plural “stocks”.
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