Commercial law
(Extract)
Trade name and seat
Art. 7 (1) A trade name shall be the name under which a merchant shall carry on its business and under which it shall sign.
(3) The merchant shall mandatorily inscribe its trade name in Bulgarian. It may additionally inscribe it in a foreign language.
Art. 8 The trade name of a branch shall incorporate the trade name of the merchant and the extension “branch”.
Branches
Art. 17 (1) A merchant may open a branch outside the community where its seat is located.
(2) The branch shall be registered in the Commercial register on the grounds of a written application containing:
1. seat and subject of activity of the branch;
2. data for the person managing the branch and for the extent of his representative authority.
(3) Attached to the application under para 2 shall also be a notary certified consent along with a specimen of the signature of the person managing the branch.
Art. 17a. (1) A branch of a foreign person, registered with the right of performing trade activity under the national legislation, shall be entered in the commercial register.
Sales Representative
Art. 32 (1) A sales representative shall be a person engaged independently and by occupation in assisting the business of another merchant. A sales representative may be authorized to effect transactions in the name of the merchant, or in its own name but on the behalf of the merchant.
(2) The contract between the merchant and the sales representative shall be executed in writing. The merchant may not refer against the representative to agreements in deviation from the provisions of art. 33, 34, art. 36, para 4 and 5 and art. 45 which are to the representative’s prejudice.
Art. 33 (1) A sales representative shall cooperate or effect transactions with due care, taking into consideration the merchant’s interests. It shall forthwith notify the merchant of any transaction effected by it.
(2) The sales representative shall be obliged to fulfill the instructions of the merchant as well as to provide the full information at his disposition regarding his activities.
Broker
Art. 49 (1) A broker shall be a merchant which by occupation acts as an intermediary so that transactions may be entered into.
(2) As far as brokerage for contracts for the carriage of goods by sea and for stock exchange transactions are concerned, the provisions for the said activities shall apply even when the brokerage is performed by a mercantile broker.
Art. 50 (1) A broker shall keep a journal in which it shall record on a daily basis all executed contracts. At the end of each day the broker shall date and undersign all entries for that day.
(2) Contracts shall be recorded consecutively in the order of their execution; an entry shall include the names of the contracting parties, the time of execution of the contract and the essential arrangements.
(3) A broker must, upon request, provide the parties with an abstract from its journal containing the full entry concerning their contract.
Art. 51 A broker shall be entitled to a commission from one or both parties in accordance with the arrangement reached. Absent such an arrangement, the customary brokerage for the type of transaction in the specific circumstances shall be owed by both parties.
Account books
Art. 53 (1) A merchant shall keep accounts in which it shall record the movements of its enterprise’s property. Such movements shall be recorded in chronological order.
(2) A merchant shall, through inventory performed within the time periods prescribed by the Accountancy Act, establish the availability and value of the items of the assets and liabilities of its enterprise’s property.
(3)A merchant shall sum up the results of its commercial activities on the basis of the entries in its books and inventory, and prepare an annual financial statement and, where necessary, the relevant accounting notes. The annual financial statement shall be verified by a certified public accountant in the provided by law cases.
Art. 54 The opening balance sheet for each year shall correspond to the closing balance sheet for the preceding year. A balance sheet shall also be prepared when a merchant winds up its activities.
Art. 55 (1) Regularly kept account books and entries therein shall be admissible as evidence between merchants for establishing commercial transactions.
Companies
Art. 63 (1) A company is an association of two or more persons for effecting commercial transactions with joint means.
(2) In cases provided by a law a company may be incorporated by one person.
(3) Companies shall be legal persons.
Art. 64 (1) The types of companies are:
1. general partnership;
2. limited partnership;
3. limited liability company;
4. joint stock company;
5. partnership limited by shares.
(2) Only the companies set forth in this Act may be established.
Art. 65 (1) A company’s founders shall be Bulgarian or foreign individual or corporate bodies possessing capacity.
(2) A person may participate in one or more companies to the extent such participation is not prohibited by law.
(3) When a trade company participates in another company its rights as a partner or sole owner shall be exercised by the person who has the right to represent it or by an explicitly authorized person.
Limited liability company
Art. 113 Limited liability company may be formed by one or more persons which shall be liable for the company’s obligations with their contributions to the company’s registered capital.
Art. 114 (1) The articles of incorporation shall be executed in writing.
(2) A partner may be represented by an agent holding a special power of attorney with notarized signature.
(3) When the limited liability company is formed by one person, a constitutive deed shall be drawn up instead of articles of incorporation.
Art. 115 The articles of incorporation shall state:
1. the trade name, the seat and address of management of the company;
2. the purposes and the time period for which the company is being set up;
3. the names or, respectively, the trade names and the unified identification code of the partners;
4. the registered capital. Where the full amount has not been paid at incorporation, the articles shall set the time periods and terms for payment. The term of final installment of the whole size of the capital cannot be longer than two years from the registration of the company, respectively from the increase of the capital.;
5. the interests of the partners;
6. the management and manner of representation;
7. the privileges of the partners, where agreed upon;
8. other rights and obligations of the partners.
Art. 116 (1) The trade name of a company shall contain the extension “druzhestvo s ogranichena otgovornost” (limited liability company) or the abbreviation “OOD”.
(2) Should all the capital be owned by one person, the trade name shall contain the extension “ednolichno OOD” (single person limited liability company)
Art. 117 (1) The registered capital of a limited liability company shall be not less than BGN 2. It shall consist of the interests of the company’s partners, and no interest shall be smaller than BGN 1.
(2) The sum total of all interests shall be equal to the registered capital, and the value of each interest shall be a multiple of 1.
(3) The interests of the individual partners may be of unequal value.
(4) An interest may be held jointly by several persons.
Art. 118 (1) The founders shall be liable jointly and severally before the company for damages caused in the course of its formation, if they have not acted with due care.
(2) The founders shall not be entitled to remuneration for the formation of the company from the registered capital.
Art. 119 (1) For registration of a company in the commercial register it shall be necessary:
1. to file the articles of incorporation;
2. to have an appointed manager or managers;
3. each partner to have paid at least one third of its interest, but not less than10 leva;
4. at least 70 per cent of the registered capital to have been paid.
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