The joint-stock company may not be the most common legal-organizational company form but it is the company with the greatest economic significance. This is mostly due to the fact that the joint-stock company is the most effective company form for raising and concentration of capital. JSCo. has the characteristics of a capital company and it is the most typical representative of that type of companies. JSCo. has other distinctive (from legal standpoint) features as well which in certain situations make it more suitable and preferred form for registration and doing business¹.

General Information

Typically, the joint-stock company is incorporated under the so called “regulatory-control system”. Under the said system founders carry out the actions prescribed by the Commerce Act which are then subject to further legality control through the institute of the Commercial Register. There are two incorporation systems depending on the constitutive elements: successive and simultaneous. Under the successive system founders publish an invitation for public subscription (in the form of prospectus) as a way of raising the company’s capital. Under the simultaneous system founders subscribe for the entire stock and for this reason no invitation for public subscription is published.

The procedure for setting up a JSCo. has a preparatory stage which will not be subject to this article. Outside the said preparatory stage the incorporation of JSCo. develops in three stages. The first one includes the raising of the capital and the second one – the steps undertaken during the Constituent Meeting (taking decisions for incorporation, adoption of By-Laws and appointment of management bodies). In the case of incorporation without public subscription the said two stages are combined into one.

The last stage of the joint-stock company’s incorporation process is its registration in the Commercial Register. The entry has a constitutive effect and a company will be deemed formed on the date of its registration in the Commercial Register by virtue of Art. 67 of the Commerce Act.

Application for Registration

A special application needs to be filed with the Commercial Register for the purposes of the registration. There is a standard form for the application – form A5 (Application form for registration of circumstances pertaining to a public limited company). Applications for entering or deletion of circumstances with regard to joint-stock companies must be filed electronically by using an electronic signature.

The registration of the company should be requested by the management body of the JSCo. – the Board of Directors or the Managing Board (depending on whether the managing system is one-tier or two-tier). A lawyer may be authorized for such purposes as well – the power of attorney should be explicit but does not require any notarization of the signature.

Necessary Documents

The main documents which need to be enclosed to the application for registration are the following ones:

Minutes from a Constituent Meeting;

By-Laws;

List of the persons who have subscribed for stocks upon the incorporation²;

Declarations by the founders that they are not declared bankrupt;

Document for deposited into an accumulation bank account capital;

Notarized declarations by the members of the management bodies that they give their consent to be members of the respective body and comply with the requirements of Art. 234 of the Commerce Act;

Minutes with resolutions for electing a person to represent the company;

Notarized signature specimens of the elected representatives.

A document for paid state fee and a declaration on the truthfulness of the stated for registration circumstances and acceptance of the submitted for announcement acts also need to be presented.

In certain cases other documents might be necessary as well, such as resolution for participating in the incorporation of the joint-stock company (where the stockholder is another company), license (where the law explicitly requires one for the entry to be allowed), etc. Various specifics exist in other situations as well, such as: when using public subscription; when making in-kind contributions into the capital; when issuing book-entry-form stocks (shares), as well as in numerous other situations.

By-Laws must contain at least the following:

name of the company, seat and address of management;

scope of activity and term of existence (if any);

the amount of the capital, as well as the portion thereof which must be paid up upon the company’s foundation, the type³ and number of stocks, the rights of the individual classes of stocks, any special terms about the transfer of the stocks, as well as the nominal value of an individual stock;

the bodies of the company, their mandate and number of members;

the type and value of the non-monetary contributions, if any, the persons making them, the number and nominal value of the stocks which they will be given;

the advantages, if any, which the founders, by name, have reserved for themselves;

the terms and procedure for issuing callable stock, if such is foreseen;

the manner of distribution of profits;

the manner of calling the General Meeting, as well as other terms.

The capital of the joint-stock company is divided into stocks (shares). Generally, the minimum value of the capital stock of a joint-stock company is 50 000 Levs (BGN). The minimum nominal value of one share is 1 Lev – larger nominal value of the stocks must be in full Levs. Capital needs to have been subscribed in full. Upon submitting the registration application it is necessary that the part of the value of each share as provided for in the By-Laws has been paid up – but not less than 25% of the nominal value or issue price of each share as provided for in the By-Laws.

Fees and Other Costs

Pursuant to the Tariff on the State Fees Collected by the Registry Agency, the state fee for registration of a JSCo. is 360 Levs or 180 Levs when the application is filed electronically, including by an authorized lawyer.

Other costs will apply as well, such as notary fees for attestation services, bank commission for opening an accumulation account, fees for translation and legalization (if applicable), etc. Information about the due attorney fee may be found on page Fees.

Single-Person Joint-Stock Company

The Commerce Act allows for the joint-stock company to be established by only one person. In such cases a single-person joint-stock company (spJSCo.) is registered – there is only one stockholder owning the entire capital and all stocks in the capital, respectively. When a joint-stock company is founded by one person, the latter signs an Incorporation Deed, thus adopting the By-Laws and appointing the first Supervisory Board or Board of Directors; the Incorporation Deed is prepared in a written form.