Last Updated on October 15, 2023 by Bulgarian attorney
Bulgarian Joint Stock Company
A joints Stock company is a company in which the capital is divided into shares. The company is liable before its creditors with its assets. The trade name of the joint stock company should be unique for Bulgaria and should include the extension “акционерно дружество” (joint-stock company) or the abbreviation “AD”. A joint stock company may be found by one or more natural or legal persons. The minimum registered capital of a joint-stock company is BGN 50,000 which is approximately € 25,500. A minimum of 25% of the share capital must be subscribed to initiate the registration process.
Management of Joint Stock Companies in Bulgaria
The management structure of a Joint Stock Company (JSC) in Bulgaria presents two distinctive options: a one-stage or a two-stage management control system.
In the one-stage system, the JSC is managed by a Board of Directors, which is responsible for the company’s strategic decision-making, financial management, and overall operations. The Board of Directors is accountable to the shareholders of the company and is elected by them at the General Meeting of Shareholders.
In the two-stage system, the JSC is managed by both a Board of Directors and a Supervisory Board. The Board of Directors is responsible for the day-to-day management of the company, while the Supervisory Board oversees the work of the Board of Directors and ensures that it is acting in the best interests of the company and its shareholders.
Regardless of the management structure chosen, JSCs in Bulgaria are subject to legal and regulatory requirements, such as holding regular shareholder meetings, keeping accurate financial records, and complying with tax and other reporting obligations.
Advantages of Engaging Our Services for Establishing a Joint Stock Company in Bulgaria:
- Strategic Capital Structuring: Our expert guidance ensures a well-defined capital structure, safeguarding against potential future loss of control over your JSC company.
- Tailored Share Types: We offer insights into diverse share types, including ordinary, preferred, or other classifications, tailoring your choices to suit your specific requirements.
- Emission and Nominal Value: Our advisory extends to emission specifics and nominal value considerations, helping you make informed decisions crucial to your JSC’s foundation.
- Comprehensive Tax and Investment Insights: We provide in-depth insights into the intricate realm of tax implications and investment considerations, ensuring your JSC establishment aligns seamlessly with your fiscal and investment goals.
Bulgarian Solely Owned Joint Stock Company
A Bulgarian Solely Owned Joint Stock Company, abbreviated as “EAD” in Bulgarian, is a type of Joint Stock Company where the capital is exclusively owned by a single natural or legal person. The company’s capital is divided into shares, and the minimum required registered capital is BGN 50,000, which offers the flexibility of being paid in convenient instalments.
Since October 2018, Bulgarian Joint Stock Companies are no longer permitted to issue bearer shares. Consequently, all existing bearer shares must be converted to registered shares, either ordinary or preferred, by the end of July 2019. This change in regulations was made in order to improve transparency and accountability in the corporate sector and align with international best practices. Failure to replace bearer shares with registered shares by the deadline will result in invalidation of the bearer shares.
Accounting for Joint Stock Companies in Bulgaria
When it comes to accounting for joint stock companies in Bulgaria, several key considerations and practices come into play. Double-entry bookkeeping is a fundamental requirement, as is common for businesses, ensuring the maintenance of precise financial records and adherence to established accounting standards.
Audit requirements vary depending on the size and activities of the company. Larger joint stock companies often face the obligation of mandatory audits conducted by registered audit firms, an essential element of ensuring financial integrity and compliance.
Transparency and disclosure hold paramount significance for joint stock companies, particularly if they are publicly traded entities. These companies are expected to maintain a high degree of openness and transparency in their financial reporting. This obligation extends to publishing annual financial reports, making them readily accessible to shareholders and the general public.
Steps to register a Joint Stock company in Bulgaria
- Drawing up the set of incorporation documents (Power of Attorney, Memorandum of Association & Declarations).
- Each director or manager will have to sign a Specimen and attest at the nearest Bulgarian embassy or consulate, or a local notary public.
- Opening of a company bank account for the deposition of the founding capital.
- Translation and legalization of the Specimens (if not signed in front of a Bulgarian notary or at Bulgarian embassy or consulate).
- Filling all documents at the Bulgarian Company Register.
- Your Joint Stock company is registered within 2 working days. The deposition bank account is closed; applications for a business bank account and Bulgarian VAT number can be submitted.
Ready-Made Joint Stock Companies
If you prefer to skip the hassle of setting up a brand-new joint stock company, our expert team is here to support you in acquiring a Bulgarian ready-made public company. This streamlined approach allows you to swiftly establish your business operations and start your entrepreneurial journey without the complexities of initial setup.
How to open a bank account of a Joint Stock company in Bulgaria?
Since 1st of August 2019 banks in Bulgaria refuse to open company bank accounts unless the director of the company is a resident of Bulgaria. In other words, you have to apply for Bulgarian residency for EU citizens prior to applying for the opening of a company bank account. On the other hand, applying for Bulgarian residence card is a precondition to qualify for Bulgaria tax residency.
Change in the circumstances of a Joint Stock company
If you have registered a Joint Stock company in Bulgaria and you would like to change any of the company circumstances we may assist you with the following:
- Increase/ decrease of the company capital;
- Change in the ownership and directorship;
- Change of the registered office address;
- Change of the name of the company;
- Liquidation of a Bulgarian Joint Stock company;
- Insolvency of a Bulgarian Joint Stock company.
- You may also consider the registration of Joint Stock holding in Bulgaria.
- Competitive pricing for Accounting for a JSC in Bulgaria.
To change any of the circumstances of the Joint Stock company, you will need to authorize us to act on your behalf and at your expense related to the particular change. The authorization requires few documents to be attested in the nearest Bulgarian embassy or consulate, or apostilled. Changes in company circumstances take up to 5 working days after receiving authorization.
The Joint Stock Company is a popular corporate structure for establishing an Alternative Investment Fund in Bulgaria.
For more details about registering a Bulgarian Joint Stock company please contact us.