Company Incorporation Procedure in Bulgaria - How to Open a Bulgarian LTD
Please be advised that the legal article below reviews only the process of setting up a Bulgarian limited liablity company. If you want to register a Bulgarian company or if you are in need of legal support with regards to other company / corporate issues then you can:
Opening a company in Bulgaria is at first sight a straightforward and not complicated process. There are relatively clear requirements of Bulgarian Company Laws and the whole procedure is fast and easy compared to other corporate issues. That is why it is a common practice for paralegals and non-lawyers to offer Bulgarian company incorporation services by filling in a standard pack of documents and filing them with the competent Registry Agency without even asking for anything but personal/company details.
Bulgarian commercial company setup 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 qualified corporate lawyers with deep knowledge of Commercial Law matters can advise on which option is best for each particular new company formation in Bulgaria.
Our corporate attorneys at Trifonov Law Offices always start the process of forming companies in Bulgaria with an in-depth analysis of the specific requirements of the respective client and clarification of some essential issues:
- What is the new company’s purpose – running an active business, land acquisition etc.
- What type of legal form will fit most to the profile and needs of the business entity
- 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 shareholder/s and owner/s
- What further expenses and costs should be expected after the process of Bulgarian company creation 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 Bulgarian company’s registration documents, namely 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 papers submitted with the Registry Agency at the time of the Bulgarian limited company registration. That is why it is always recommended that these documents are drafted specifically for each individual client by a solicitor specialised in creating and establishing Bulgarian trading companies 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 initial costs and expenses some 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 Bulgarian LTD is duly registered with the Commercial Register it cannot operate legitimately for a number of reasons. The effective registration with Bulgarian Trade Register is the final step of the incorporation of the respective limited liability legal entity but yet not the last thing to be done in connection with the procedure of starting a company in Bulgaria.
There are certain mandatory procedures following the company establishment that must be undertaken by qualified accountants. Otherwise fines could be imposed on the company and in a worst case scenario it could be liquidated by public 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 attorneys 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 in need of company and corporate services in Bulgaria (formation, reorganisation, mergers and acquisitions, legal retainer support etc.), personal approach and professional legal services provided by reputable Bulgarian expert company lawyers – we at Trifonov Law Offices are at your service.