Public body: Ministry of Economy
The two most popular types of business entities are Sole Proprietor (SP) also known as self-employed and Sole owner of limited liability company (SOLTD) or Limited liability company (LTD).
The difference between the latter two is in the number of people who own the company’s capital. In the case of the SOLTD, a single person owns 100% of the capital.
The partners in the LTD or the sole owner respectively, have limited liability to the creditors up to the value of their shareholding. In other words, their personal assets are protected should their limited liability company go bankrupt. The minimum capital required to incorporate this type of entity is 2 BGN. The partners may later decide to increase the company’s capital. It is also possible to attract new partners who receive a share in the company.
The registration fee is significantly higher than that of SP. The deregistration of SOLTD or LTD and liquidation procedure is long and complicated. Additional bank fees are paid to open an escrow account to raise the company’s capital.
Register a Sole owner limited liability company
- Reservation of a company name is not mandatory as anyone may reserve the name of the company prior to the filing of the registration application.
- Holding of constituent assembly and signing of partnership agreement/articles of association whereby the constituent assembly is summoned by one of the company’s founding partners. The constituent assembly makes a resolution to incorporate the company and it sets the respective share of the company’s capital held by each partner.
- A partnership agreement, respectively articles of association for the SOLTD, should be signed at the constituent assembly and management body should be appointed for the company. The partnership agreement contains the company name, registered address, and address of management; the type of activities and term of the agreement; company name respectively and unified identification code of the partners; capital and the shares that the partner holds in the company’s capital; The governance and mode of representation. One of the partners or the sole owner of the capital may be appointed general manager. It is mandatory to prepare minutes from the constituent assembly, which shall state the agenda of the decisions made.
- Contribution of the company capital to a special company bank account. The opening of a bank account is part of the procedure and it allows the partners / sole owner to pay into account their share of the capital. An escrow account may be opened in every commercial bank in Bulgaria (the fee for the opening of such an account depends on the tariff of the respective bank). The articles of association or partnership agreement together with the minutes must be presented to open the account.
- Obtaining a permit/license (if the business is selling tobacco).
- The entry of the company in the Commercial Register.
- Paid registration fee of 110 BNG upon the filing of the document on-site; or 55 BGN for online application (electronic signature is required).
- Other fees: reservation of company name 40 BGN or 20 BGN (if done online); Bank fee – approximately 10 BGN, and notarisation of the specimen of the general manager – approximately 6 BGN per signature.
The required set of documents includes:
Registration application, Partnership agreement or Articles of association; Minutes for the incorporation of a company; Notarized specimen of each of the appointed general managers; Declaration in the meaning of art. 142 of the Commerce Act, signed by each of the appointed general managers; Declaration in the meaning of art. 141, para 8 of the Commerce Act, signed by each of the appointed general managers; Certificate issued by a bank as to the paid-in capital; Resolution of the management body and the body representing the partner – legal entity; Excerpt from Companies Register for a partner – foreign legal entity; Document for paid state fee for the incorporation of a company; Declaration under article 13, para 4 of the Law on the Commercial Register signed by the general manager – candidate; Respective license or permit in accordance with a specific law dealing with the performance of a specific activity (if applicable).
Application for registration is available on request (email Hello(at)move2bulgaria.com for Form А4).