The registration of a legal entity is a mandatory procedure for every entrepreneur that aims to develop legitimate business and meet the regulatory requirements on the territory of the Republic of Bulgaria.
What are the different types of legal entities according to the Bulgarian legislation, what are the procedures for their registration, how long do they take and what difficulties you might encounter during the process – find out in the following paragraphs.
The types of companies according to the Bulgarian legislation and the legal procedures for their registration
Your business niche, your capital, and the long-term goals of your enterprise are the main factors for choosing the appropriate type of legal entity for your needs. The options available to you are:
- Bulgarian sole proprietorship – This is a type of company that can be registered by an individual – a trader – in order to legitimize their trading enterprise. What is particularly noteworthy about this form is that the owner of the company is legally responsible for their personal property, which is why lawyers do not particularly recommend it. The documents needed for the establishment of а Sole proprietorship company are an Application for Entry of Circumstances, as well as several declarations under different Articles of the Commercial Law. They are filled in on-site at the Registry Agency, and the time for the company registration after filling them is between one and three days.
- Bulgarian OOD (Limited Liability Company) and EOOD (Single Limited Liability Company) – these are some of the most convenient and preferred options for registering a company in Bulgaria, especially for small and medium-sized businesses. The financial responsibility of the contributors in an OOD is no more than the amount of their share in the capital of the company, the minimum of which is legally 2 BGN.
The most important documents for registering such a company are the Articles of Association (for EOOD) or the Company Agreement (for OOD), a banking bill for initial capital payment, a decision for manager employment, as well as several declarations and applications under various articles of the commercial law. The documents can be submitted online or directly at the Registry Agency – the registration time after filling them in is about two to three days.
- Bulgarian AD (Joint Stock Company) is a model suitable for businesses with higher capital and a more significant number of investors, with a minimum of two. Its management is carried out by a board of directors. At the same time, the documentation is voluminous and highly formalized, while the minimum share capital is BGN 50,000 for a closed joint-stock company or BGN 100,000 for an open joint-stock company. The difference between the two options lies in the ability to trade stocks on the stock market.
The establishment and registration of a joint-stock company require a more considerable set of papers, including the Articles of Association, a constituent assembly protocol, a list of shareholders, as well as several different applications and declarations. Once the package of documents has been gathered, the company can be registered online via an electronic signature or directly in the Commercial Register. The processing time after the submission of the documents is from three to five days.
It is strongly recommended that you use the services of an experienced lawyer and accountant to advise and guide you through the process of registering a legal entity, especially when it comes to more complex and more extensive documentation.