Venture Capital
Company Start-Up
De Ferrari provides the necessary services and technical assistance to establish new companies and to develop Venture Capital investment projects in Bulgaria.
Forms of Business Organisations
According to the Bulgarian legislation, there are two basic types of business enterprise. The legal differences between them are in the legal identity of the entity and the allocation of liability:
- Partnerships
- Corporations
The Commercial Act describes the following types of commercial corporations:
- general partnership (unlimited partnership)
- limited partnership
- partnerships limited by shares
- limited liability company
- single-owner limited liability company
- joint-stock company
Other forms of business organization under Bulgarian law:
- joint venture
- branch
- trade representative office
- sole trader
- co-operation
Most appropriate for business:
- limited liability company
- joint-stock company
1. Limited Liability Company (BG: OOD)
- Both individuals and/or legal entities may found and participate in Limited liability companies.
- Partnership: at least 2 partners.
- A single-member limited liability company (EOOD): limited liability company which capital is owned by one person.
- Basic capital: at least BGN 5000
- Minimum capital contribution by each partner: BGN 10
- Quotas may be unequal
- All partners bear personal liability for company’s debts, up to the amount of their contribution. However, partners are not liable for other partners' unpaid contributions.
- Quotas are non-negotiable, and are transferable only with other partners’ approval. Transfers must be approved by at least 75% of majority vote, with at least 75% of the total capital represented.
- Limited liability companies are prohibited from banking or insurance business.
- Company’s capital is not divided into shares, nor represented by share certificates.
- Management: General Assembly and manager/ managers appointed and authorized to run the business.
2. Joint-Stock Company (BG: AD)
- Company’s capital: divided into shares of equal value
- Shareholders’ liability: limited to their stock
Establishment: after decision of a founding meeting of all founders (natural individuals and/or legal persons).
Joint-stock company which capital is owned by one person is called single-member joint-stock company (EAD).
- Minimum basic capital: BGN 50 000
- Minimum capital contribution(min. face value per share): BGN1
- Shares are negotiable commercial paper.
- Types of shares:
- Nominal (by name)
- Bearer’s
- Shares transfer: by endorsement, which must be recorded in the company’s stockholders register
- Bearer's shares are freely transferable.
- JSC’s may be registered, listed and traded on the Stock Exchange Market.
3. Establishment of Enterprises with Foreign Investment
- Under Bulgarian legislation, foreign investment enterprises can be established and exist as any of the business organizations described in the Commercial Act.
- No limitations of foreign persons’ investments and/or share participation
3.1. Joint Venture
- A Joint venture company is formed by a Bulgarian and a foreign partner.
- No limitations of the foreign partner(s)’ investment and/or share participation
- Joint ventures exist in the form of business entities under the Commercial Code
- Corporations established in Bulgaria by foreign joint venture partners, with or without a Bulgarian partner, are treated as Bulgarian corporations (local persons), and are given all rights and obligations as to all Bulgarian companies
- Corporations established in Bulgaria by foreign joint venture partners, with or without a Bulgarian partner, are treated as Bulgarian corporations (local persons), and are given all rights and obligations as to all Bulgarian companies
- Foreign investors have to register their activities at:
- The Registry Agency under the registration system BULSTAT for issuance of an identification number;
- National Revenues Agency’s local offices, if foreign investors have employees on their pay-roll;
- Customs authorities when foreign trade operations are performed.
