30 November 2023
Changes in the Commercial Law establishing a new type of trading company
With the latest amendments to the Commercial Law, a new type of trading company was introduced for the Bulgarian business – the Company with variable capital (CVC).
This company is particularly suitable for start-up companies that develop innovative and high-tech products and services.
A company with variable capital can only be an enterprise that meets 2 conditions at the same time
- average number of personnel less than 50 people;
- annual turnover and/or value of assets up to BGN 4,000,000.
In contrast to LLC and JSC, in the case of the company with variable capital:
- it is not required to open a fundraising account for the capital;
- the partners are not entered in the commercial register;
- non-monetary contributions to the capital are made more quickly and easily.
Capital and shares
The capital is not subject to registration and there is no requirement for a minimum amount of capital. By decision of the shareholder/s, the amount of the capital is determined at the year end closing. Shares of one class have the same nominal value, which cannot be less than one cent.
Changes in insolvency proceedings and entering insolvency of the entrepreneur (natural person)
Significant amendments and additions are introduced to the insolvency rules covering all phases of the procedure. The reform is aimed at improving the efficiency of these proceedings by introducing mechanisms for their accelerated conduct under clear criteria guaranteeing the rights of the creditors and the debtor.
For the first time, the possibility of declaring insolvency for natural persons-entrepreneurs is introduced – this is a narrower category of natural persons who exercise an economic activity, which does not require the conduct of a business in a commercial manner.
To be declared insolvent, a natural person-entrepreneur must be unable to fulfill a required obligation to their creditors.
Please do not hesitate to contact our team for any clarification or enquiry.