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Shareholder Resignation

Shareholder resignation is one of the most delicate corporate procedures, as it affects both the ownership and the management of the company. Bulgarian law provides for two main ways to resign — by General Meeting resolution and through a unilateral declaration of intent.

Resignation by General Meeting resolution

Under this option, the shareholder requests the other shareholders to transfer their shares — to another shareholder or to a third party. The General Meeting adopts a resolution approving the transfer by a 3/4 majority of the capital (for transfers to third parties).

This method is smoother and more predictable, as it allows the parties to negotiate the terms — price, deadlines, and additional commitments.

Unilateral withdrawal under Art. 125, para. 2 of the Commercial Act

Every shareholder has a subjective right to withdraw from the company unilaterally, without needing the consent of the others. The only requirement is to give written notice of at least 3 months before the date of withdrawal.

This right cannot be restricted by the articles of association and does not depend on any additional conditions. The financial settlement (payment for shares) is a separate consequence of the withdrawal, not a prerequisite for it.

Legal uncertainty

In practice, there is a legal gap regarding whether a departing shareholder can request their own deregistration from the Commercial Register without the company's cooperation. Case law on this matter is contradictory, which necessitates careful legal analysis of each specific case.

Timeline

For resignation by GM resolution — the procedure can be completed within 1–2 weeks. For unilateral withdrawal — the minimum period is 3 months (the notice period), plus time for Commercial Register filing.

Required documents

  • Written notice (for unilateral withdrawal)
  • General Meeting resolution (for resignation by resolution)
  • Share transfer agreement (notarised)
  • Updated articles of association
  • Declarations under Art. 129 of the Commercial Act

Frequently asked questions

What happens to the departing shareholder's shares?
Upon unilateral withdrawal, the departing shareholder's shares are assumed by the company. The company must, within a reasonable period, distribute them among the remaining shareholders or offer them to a third party. The departing shareholder is entitled to a financial settlement — the value of their share, calculated as of the date of withdrawal.
Can the articles of association prohibit unilateral withdrawal?
No. The right to unilateral withdrawal under Art. 125, para. 2 of the Commercial Act is subjective and irrevocable. Clauses in the articles of association that prohibit or restrict this right are null and void. The only requirement is compliance with the three-month notice period.
How is the share value determined upon withdrawal?
The share value is determined as of the date of membership termination, based on the company's accounting balance sheet. In practice, however, the actual market value may differ significantly from the book value. In case of dispute, the parties may request a valuation by an expert or refer the matter to court.

Need assistance?

Our lawyers can assist you with shareholder resignation — whether you are the departing shareholder or the remaining shareholders who need to organise the process.

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