Share transfer. Stock transfer – Bulgaria
The subject of this article is to explain the procedure of share transfer of Bulgarian LTD company, along with the procedure of stock transfer of Bulgarian Joint Stock Company (JSC).
What is necessary to acquire or sell Bulgarian LTD shares? Share transfer procedure.
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 share transfer, 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 share transfer. 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.
According to the changes in the Commerce Act from 2018, in the moment of transferring the shares the seller along with the manager of the company shall prove that and no outstanding wages, indemnities and statutory social security contributions are due and not paid to employees, including employees, whose employment relationship is terminated within three years prior to the transfer of the company’s share.
In order to apply in the Trade register for registering the changes of the ownership, the new shareholders have to sign new updated Articles of Association and the manager shall sign few declarations and a power of attorney. Usually, the change in the Trade Register takes around one week from the submission of the changes.
How to sell or buy stocks in a Joint Stock company? Stock transfer procedure in Bulgaria
The stock transfer type depends whether the stocks are 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.
The registered shares are transferred by writing on the back of the stock certificate the number and type of transferred stock and the new owner. There is no notarization in this type of transfer and they are easily acquired by the new owners.
Unlike the share transfer in a Limited liability company, the stock transfer is not announced in the Trade Register just in the company stock book.
Our lawyers from Innovires Legal can fully assist you in preparing all the required documentation to transfer the shares or stocks of a Bulgarian company.
Contact us in case you need additional information regarding the share transfer and stock transfer of a Bulgarian company.