The subject of this article is to explain the procedure of changing the owner of Bulgarian LTD company and as well as changing the holder of stocks in a Joint Stock Company.
In general, there two options in order to achieve the goal – ownership change :
1) Voluntary with a shareholder’s meeting decision or
2) Unilaterally by resigning of the shareholder
When it comes to voluntary, the company share may be transferred freely between the partners/shareholders of the company. In case the buyer is a third party, a decision allowing the transfer is required as the legal form of the LTD has a “personal” element.
The procedure for transfer of company shares requires at first place signing of Contract for transfer of shares, which should be notarized. It is obligatory the notary certify the signatures, along with the content of the contract executed simultaneously. Which means it cannot be notarized first by one of the parties and then in the next day by the other party. The change in the Law regarding the form of notarization practically does not allow the shares to be transferred outside of Bulgaria or the Bulgarian Embassies and Consulates.
As the second step, there should be also a Decision of the General meeting of the shareholders for transfer of the shares. This decision shall be also with notary certification of the signatures and the contents carried out simultaneously by the notary unless in the Articles it is written that those decisions will be taken in simple written form.
When the legal form is a joint stock company, the stock transfer type depends on whether the stocks are a bearer or registered shares.
Bearer shares are transferred quite easy just by handing them over to the new owner. Those type of stocks is considered to be owned by the person who holds them.
You can learn more about the share transfer and stock transfer here.
As mentioned above, the second option that the commercial law gives is to change the ownership Unilaterally by resigning.
The provision of Art. 125, paragraph 2 of the Commercial Act states that a shareholder may terminate its participation in the Company with written notice given at least 3 months before the date of termination.
The realization of the right of the partner under Art. 125, para. 2 of the Commercial Act to leave the company is subjective and dependent only on his will. Both the law and the mandatory jurisprudence do not require other facts on the occurrence of the right of the shareholder to leave the company. This means that after the notification of the company and the expiration of the 3 months, the shareholder’s relations shall be considered as terminated with the company
You can learn more about the resignation from being a shareholder here.
Innovires law firm can fully assist you with the ownership change. Our lawyers can take the representation in front of the Trade register and submit the changes.
Contact us in case you need additional information regarding the ownership change of a Bulgarian company.