Shareholder resignation. Resign from being a shareholder.
The subject of this article is to explain the procedure of shareholder resignation or with other words resign from being shareholder in a Bulgarian LTD company. There are 2 (two) ways in which a person can resign from being shareholder in a Limited Liability company – with a decision of the company and unilaterally. The result of both ways is a shareholder resignation.
- A decision of the General Meeting
The shareholder can announce his dismissal from the company and request the company to approve the transfer of his shares to another person who is not part of the company. This is because the LTD has a personal element and if one of the shareholders wishes to transfer his shares to a third party, this person has to be first approved by the other shareholders. Based on such request, the General Meeting of the company can decide the shares of the shareholder be transferred to another person not part of the company. More information on the share transfer procedure you can find here.
- Unilaterally resign from being shareholder in the company
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. There is a gap in the law whether this shareholder has the right unilaterally to request his erasure from the Commercial Register or not and the court practice in this matter is quite contradictory.
What is also important in such termination is the fact that the Law does not require an existence of a decision of the General Meeting for the release of the partner subject to the legal consequences of such termination. At the same time, the legislation giving the right of the shareholder to resign excludes the possibility that the termination is dependent on other legal facts, including the settlement of the property relations between the leaving shareholder and the company. The settlement of any property relations is regulated as a legal consequence of the termination of the partnership relationship.
Our lawyers from Innovires Legal can fully assist you if you want to resign from being shareholder of a Bulgarian company.
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