The limited liability company is the most common company form1. From legal point of view this type of company is preferred because it is an intermediate form between the personal and the capital companies, which is why the registration of an LLC allows for avoiding the complex procedure of setting up a joint-stock company and the risk and personal liability of the general partnership, while keeping the personal involvement that is typical of the personal companies.

General Information

The incorporation of an LLC is a result of the realization of various factual elements, including conclusion of Articles of Association, paying up the subscribed shares and entry into the Commercial Register. Establishing a limited liability company does not necessarily require the holding of a Constituent Meeting – signing the Articles of Association could be sufficient for such purposes, insofar as the said document also includes the appointment of the company’s director. Usually a Constituent Meeting is held and Minutes with the respective resolutions drafted.

The Articles of Association should contain the name and scope of activity of the company, the term of existence, the seat and address of management, the name or respectively company name and unified identity code of the shareholders, the amount of the capital, each shareholder’s interest in the company’s capital, the management and manner of representation, the privileges and other rights and obligations of the shareholders. Whenever individual approach is required, shareholders should consider including in the Articles of Association specific clauses corresponding to their interests in terms of their internal relations.

The Articles of Association need to be signed in a simple written form without any notarization being required.

The capital of a limited liability company may not be less than 2 Levs. It includes the shares of the shareholders which may not be less than 1 Lev each. The total amount of the shares should be equal to the registered capital and the value of each share should be a multiple of 1. The capital should be paid up prior to the registration documents being submitted to the Commercial Register – via a special accumulation bank account opened in the name of the company.

The registration of an LLC is effected through entering into the Commercial Register with the Registry Agency. 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 A4 (Application form for registration of circumstances pertaining to a private limited company). The application may be also filed via the Internet by being signed with an electronic signature.

Only the director, and not the shareholders, is entitled to request the registration of the company. The director may authorize a lawyer for such purposes – the power of attorney should be explicit but does not require any notarization of the signature.

The firm, i.e. the name by which the company will conduct its business, may be reserved prior to submitting the application for registration. Reservation of the company name is not a mandatory stage of the registration procedure – its only purpose is to ensure the uniqueness of the company name which is a compulsory prerequisite for allowing the entry. The reservation may be effected by filing an application of standard form D1.

Necessary Documents

The following documents need to be enclosed to the registration application:

Minutes of a Constituent Meeting;

Articles of Association;

Document for deposited into an accumulation bank account capital;

Notarized management consent and signature specimen of the director;

Declaration under Art. 141, par. 8 of the Commerce Act;

Declaration on the truthfulness of the stated for registration circumstances and acceptance of the submitted for announcement acts;

Document for paid state fee.

In certain cases other documents might be necessary as well, such as resolution for participating in the incorporation of the limited liability company (when the shareholder is another company), document evidencing the current status of the company and the competency of the respective body to adopt a resolution for participation (when the shareholder is a foreign country company), diplomas and other documents relating to the director (for example, where the company is to carry out activity as a medical-treatment facility), etc.

Fees and Other Costs

Pursuant to the Tariff on the State Fees Collected by the Registry Agency, the state fee for registration of an LLC is 110 Levs or 55 Levs when the application is filed electronically, including by an authorized lawyer. The state fee for reservation of a company name is 40 Levs or 20 Levs when the application is filed electronically.

Other costs will apply as well, such as the notary fee for attestation of the director’s signature (6 Levs) and the bank commission for opening the accumulation account, which may vary but is usually between 10 and 30 Levs. Information about the due attorney fee may be found on page Fees.

Single-Person Limited Liability Company

The Commerce Act allows for the limited liability company to be established by only one person. In such cases a single-person LLC is registered – there is only one shareholder owning the entire capital and all shares in the capital, respectively. There aren’t any significant differences in the registration procedure as compared to the LLC with more than one shareholder but, however, certain peculiarities as to the overall organization of the company follow from the single-person ownership. For example, a Constitutive Deed is signed and adopted instead of Articles of Association, the company name needs to indicate the single-person ownership, the sole owner of the capital resolves on the issues falling within the powers of the General Meeting, etc.

Footnotes:

1 Entrepreneurs will have the opportunity to register a variable capital company from mid-2024 - a new type of company intended to become the preferred form for doing business in Bulgaria. For more related information, please read the News article Start-ups now with a new option: the variable capital company.