Правен режим на персонални и капиталови търговски дружества по българското законодателство- предимства и недостатъци
The legal regime of personal and capital commercial companies under Bulgarian law – some advantages and disadvantages.
The Commerce Act of the
The following is a brief review of the legal regime of each type of commercial company set out below as well as of the most important considerations you should bear in mind for their incorporation.
Limited Liability Company: The Limited Liability Company is a capital company and is also the most common form of commercial company in
Joint Stock Company: A joint stock company is a company whose capital is divided in shares. The company is liable to its creditors with its property and not with the property of the shareholders. Shareholders are liable only up to the amount of the shares they hold. The main disadvantage of this form of commercial company is attributed to the significant capital which should be registered in the Commercial register – BGN 50,000. Lawmakers have provided a possibility to deposit no less than 25 % of the value of each share upon incorporation of the company and deposit the balance within an additional period of time. The contributions of shareholders may be cash and non-cash. The joint stock company allows for the greatest concentration of funds which makes it the form preferred by big investors for achievement of significant financial results. Its management is usually entrusted to professionals in a certain area and shareholders are not required to participate personally in the operation of the company. In most cases shareholders do not take part even in the composition of the managing bodies. At the same time the joint stock company is characterized by a complex system of management and representation. The bodies of the are the General Meeting of the shareholders and the Board of Directors (one-tier system of management) or the General Meeting, Supervisory Board and Management Board (two-tier system). The General Meeting of shareholders consists of all shareholders with voting rights and passes resolutions on the most important matters related to the structure and existence of the company. With the one-tier system of management, the company is managed and represented by a Board of Directors consisting of 3 to 9 persons. To facilitate its work, the Board of Directors entrusts the representation of the company to one or more of its members – executive members (Executive Director). Slightly more complex is the two-tier system where there are two constantly operating bodies – Supervisory Board and Management Board. It is suitable when prior and ongoing control on the actions of the representing authority should be exercised. In such case, the management and representation of the company are carried out by the Management Board that operates under the control of the Supervisory Board. The Management Board consists of 3 to 9 persons and reports on its work at least once every quarter to the Supervisory Board. Similar to the one-tier system, with the permission of the Supervisory Board, the Management Board may entrust the representation of the company to one or more of its members. Members of the Management Board are elected by the Supervisory Board and may be replaced by it. Some resolutions of the Management Board require the prior resolution of the Supervisory Board. The Supervisory Board may not participate in the management and represents the company only in the relations with the Management Board. It consists of 3 to 7 members elected by the General Meeting of the shareholders. By 31 March every year the Board of Directors, respectively the Management Board, prepares the annual financial statements and annual report on the activity for the previous calendar year and presents them for verification to the registered auditors selected by the General Meeting. Another peculiarity of the joint stock company is that it is mandatory to create a Reserve Fund, the funds whereof may be used only to cover the annual loss(es) from previous years. Such a fund may be provided for in Limited Liability Companies as well.
Partnership limited by shares: The partnership limited by shares is a special form of capital company which combines some of the characteristics of the joint stock company and some of the limited partnership. It is not very popular in
General partnership: The General Partnership is a type of personal company. Its specific characteristic is the unlimited and joint liability of the partners in it for the liabilities of the company. This means that along with the company itself, each partner separately and all partners jointly are liable for the obligations of the company. Partners are liable with their entire personal property. For this reason it is rarely met in
Limited partnership: The Limited Partnership is a personal company. Its characteristic feature is the simultaneous existence of limited and general partners. It requires at least one general and one limited partner. Its main advantages are that no announcement of capital is required at its incorporation while at the same time the profits of business may be pursued without the unlimited liability characteristic for а general partnership. The general partners are liable with their personal property for the obligations of the company jointly and without limit together with the company itself. The second group of partners (limited) are liable only up to the amount of the contribution agreed in the Articles of Association. The general partners manage and represent the company. Limited partners do not have the right to manage the company and may not stop the resolutions of the general partners. The provisions on general partnerships are applied in a subsidiary manner for the matters not settled in the Commerce Act.
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