Commercial Act Bulgaria: the details

The Commercial Act Bulgaria is a document that establishes the different laws that regulate the incorporation, capital, and management of companies in Bulgaria.

Entrepreneurs must abide by the Bulgaria Commercial Law, which is a set of rules that commands all business activities in Bulgaria and even defines the types of legal entities allowed to have economic activities in Bulgaria.

In order to better understand the rules and regulations for companies in Bulgaria, especially if considering to start a company in Bulgaria, we are going to break down the different parts that the Commercial Act Bulgaria covers. 

Your accountant can help figure out what type of company is best suited for your business activities, as well as take care of the financial responsibilities of your company and deal with tax advisory and other accounting needs.

We can only recommend Accountancy Bulgaria, a company with decades of experience, with experts that are multilingual, and with excellence when it comes to customer service. If you are interested in tailored accounting solutions for your company, try a free consultation.

Bulgarian companies and commercial activities

The Commercial Act Bulgaria establishes some general information about the commercial activities of companies in Bulgaria.

For starters, it defines the role of merchants, who are natural or legal persons performing certain activities like:

• purchasing goods to resell them,
• buying securities,
• producing goods for sale,
• making transactions with intellectual property,
• banking,
• performing foreign exchange transactions,
• working in services like transportation, tourism, advertising, information, entertainment, etc.

Other businesses in Bulgaria may still be considered as merchants if they perform commercial activities daily, even if not listed.

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Commercial Act Bulgaria and types of companies

The Commercial Act Bulgaria defines different types of companies that can be incorporated in Bulgaria, with differences in the number of members necessary to incorporate each type, as well as their participation in terms of liability.

• The types of companies are:
• the limited liability company, 
• the joint stock company,
• the partnership limited by shares,
• general partnership,
• limited partnership.

There is a big difference between the three first companies and the last two. This difference is mostly based on the liability of the members that form said companies. 

In the case of a limited liability company, joint stock company, and partnership limited by shares, members are only liable for the capital they have invested in these companies. However, in the case of the last two company types on the list, members are liable for the financial responsibilities of the companies with their personal assets.

Commercial Act Bulgaria and company formation

The Commercial Act Bulgaria also determines the process for company incorporation, requirements, and rights of members. 

To start, anyone can open a company in Bulgaria, either a Bulgarian citizen or a foreign national. The type of company has to be decided prior to registration in the commercial registry, which is also the moment in which the company becomes an entity and can start business operations. 

READ ALSO: Personal income tax in Bulgaria: a definite guide

Commercial Act Bulgaria and company operation

The Commercial Act Bulgaria also regulates different aspects of company operation that are important for the functioning of corporations. 

Among these rules and regulations, we find details on the rights of the company members and partners, their liability according to the different types of companies, as well as how the company capital is administered. 

Other aspects of corporate law that are established in the Commercial Act Bulgaria include, for example, the minimum number of board meetings per year, the roles of different members within a company, etc.

Conclusion

The Commercial Act Bulgaria is the main document that details the Company Law in Bulgaria.

This Act includes all necessary rules and regulations for company incorporation Bulgaria, as well as what different kinds of companies there are, how they are formed and managed, and how corporations are meant to operate in Bulgaria.

Counting with the expert advisory of an accountant in Bulgaria, like Accountancy Bulgaria, is a must to smoothly comply with all the financial requirements for companies in Bulgaria.