Company Registration Bulgaria - Company Formation and Incorporation Procedure
Please be advised that the legal article below reviews only the process of Bulgarian limited liablity company (LTD) setup, which is the first step for establishing a new business in Bulgaria. If you already have a duly registered Bulgarian company or you are in need of legal support with regards to different company / corporate issues then you can:
Company formation in Bulgaria is at first sight a straightforward process. There are relatively clear law requirements and the procedure is fast and easy compared to other legal issues. That is why it is a common practice for paralegals and non-lawyers to offer Bulgarian company formation and registration services by filling in a standard pack of documents and filing them with the Bulgarian Registry Agency without even asking for anything but personal/company details.
Bulgarian company formation and registration however leads to a lot of legal and financial consequences for its owners (shareholders, partners) which unfortunately are frequently neglected. There are a number of questions to be considered in advance and a variety of options - and only a qualified Bulgarian company lawyer with a deep knowledge of corporate and commercial law matters can advise on which option is best for each particular company registration in Bulgaria.
Our company lawyers at Trifonov Law Offices always start the process of company formation in Bulgaria with an in-depth analysis of the specific needs of the client and clarification of some essential items:
- What is the main purpose of the company – running a business, land acquisition etc.
- What type of legal form will fit most to the purpose of the company
- What are the specifics of the business that will be run by the company
- Who will be the owner/s and who will be the manager/s and what are the legal consequences for them
- What powers will be granted to the manager/s by the owner/s
- What further costs and expenses should be expected after the process of Bulgarian company formation and registration is complete
- What are the legal ways of reducing these further costs and at the same time working with conformity with Bulgarian legislation
- What can be done for tax optimization and tax planning
Some of the items listed above must be explicitly set in the Memorandum of Incorporation (Constitutive Deed) of a Bulgarian Single Member Limited Liability Company (SMLLC) or in the Articles of Incorporation for Limited Liability Companies (LLC) as well as in the Minutes of the General Meeting (General Assembly) of Owners – all these being part of the documents submitted with the Registry Agency at the moment of Bulgarian company registration. That is why it is always recommended that these documents are drafted specifically for each individual client by a lawyer specialised in Bulgarian company formation instead of using standard forms which do not take into consideration the specifics and the objectives of the client’s business or property acquisition intentions.
When it comes to costs and expenses some Bulgarian non-lawyers quote lower fees in order to attract clients – but too low to be realistic actually. Because at a later stage it turns out that there are either hidden or additional costs of different nature. Or that even if a company is duly registered with Bulgarian Registry Agency it cannot operate legitimately for a variety of reasons. The effective Bulgarian company formation and registration (with Bulgarian Registry Agency) is the final step of the incorporation of the legal entity but yet not the last thing to be done in connection with the process of setting up a Bulgarian company. There are certain mandatory procedures that must be undertaken by qualified Bulgarian accountants. Otherwise fines could be imposed on the company and in a worst case scenario it could be liquidated by Bulgarian authorities and some or all of its assets (bank deposits, real estates etc.) used to cover all related administrative expenses. In this relation one should know that lawyers operating under Bulgarian Bar Act have certain obligations which should follow quite strictly and could be held responsible for their actions and in this relation are required to maintain professional indemnity insurance cover – while non-lawyers and paralegals do not have such obligations.
If you are looking for business or company related services in Bulgaria (formation, registration, reorganisation, mergers and acqusitions etc.), personal approach and professional legal services provided by experienced Bulgarian company lawyers and solicitors – we at Trifonov Law Offices are at your service.