EOOD vs OOD in Bulgaria: Which Company Type Should You Choose?

If you are the sole owner, choose EOOD. If you have partners, you need OOD. That is the one-line answer. But the real question is more nuanced: how do these two Bulgarian LLC structures differ in governance, decision-making, conversion flexibility, and day-to-day management? Understanding these differences before you register can save you significant time, legal fees, and partner disputes down the road.

Both EOOD and OOD are limited liability companies governed by the same Bulgarian Commercial Act. They share the same tax rates, the same minimum capital, and the same legal protections. The differences lie in how the company is owned, managed, and governed — and those differences matter more than most guides suggest.

EOOD vs OOD at a Glance

Key Differences Explained

Here is the complete comparison. Every row applies to 2026 rules under the Bulgarian Commercial Act:

When to Choose EOOD

The EOOD is the right choice in most scenarios. It is simpler, faster to manage, and gives you complete control. Choose EOOD when:

1. You Are a Solo Entrepreneur

If you are starting a business alone — as a consultant, developer, freelancer, or e-commerce operator — there is no reason to create a multi-member structure. The EOOD gives you full ownership, full control, and zero governance overhead. You make decisions by writing them down. No meetings, no votes, no shareholder agreements.

2. You Want Maximum Speed and Simplicity

EOOD governance is as simple as it gets. Need to change the company address? Write a sole owner decision, file it with the Trade Registry. Need to appoint a new director? Same process. In an OOD, every significant decision requires convening a general meeting, recording minutes, and often obtaining notarized signatures from multiple shareholders.

3. You Plan to Optimize Salary and Dividends

The classic Bulgarian tax optimization — paying yourself a minimum salary (~EUR 620/month) and taking the rest as dividends taxed at 5% — works identically in both structures. But in an EOOD, you decide the dividend distribution unilaterally. In an OOD, profit distribution requires a general meeting resolution, and partners receive dividends proportional to their shares unless the дружествен договор specifies otherwise.

4. You Might Bring in a Partner Later

Starting as an EOOD does not lock you in. You can convert to an OOD at any time by admitting a new shareholder. The reverse (OOD to EOOD) is also possible but slightly more complex — it involves one partner buying out the others or a partner exiting. Starting lean with an EOOD and scaling to OOD when a real partner emerges is a common and sound strategy.

5. You Are a Foreign Entrepreneur Setting Up Remotely

Remote company formation via Power of Attorney is possible for both structures, but the EOOD process is simpler because only one founder needs to sign documents. For an OOD, all founders must sign the дружествен договор — which means coordinating notarizations, apostilles, and document shipments across multiple countries if your co-founders live in different jurisdictions.

When to Choose OOD

The OOD is the correct structure when you genuinely have multiple stakeholders. Choose OOD when:

1. You Have a Co-Founder

If two or more people are investing capital, sharing work, and splitting profits — you need an OOD. The дружествен договор (Articles of Association) defines each partner's share, voting rights, profit distribution, and the rules for transferring shares. This is the legal framework that protects all parties.

2. You Are Bringing in an Investor

When an angel investor, venture capital fund, or business partner invests capital in exchange for equity, the company must accommodate multiple shareholders. The OOD structure provides a clear governance framework: the general meeting approves budgets, the дружествен договор sets the rules, and each shareholder's rights are proportional to their capital contribution (unless agreed otherwise).

3. You Are Forming a Joint Venture

If two existing businesses are creating a joint entity — for a specific project, market entry, or product development — the OOD provides the shared governance structure required. Each parent company becomes a shareholder, the дружествен договор defines the scope and exit terms, and the general meeting provides a formal decision-making forum.

4. Your Business Model Requires Shared Governance

Professional partnerships (law firms, accounting practices, consultancies with multiple senior partners) benefit from the OOD's built-in governance. The general meeting ensures all partners have a voice in major decisions: admitting new partners, distributing profits, changing the business direction, or approving significant expenditures.

5. You Plan Equity-Based Compensation

If you intend to give key employees or contributors ownership stakes in the business, you need the OOD structure from the start (or convert from EOOD when the time comes). Share transfers within an OOD are straightforward between existing partners and require general meeting approval for new external shareholders.

Converting Between EOOD and OOD

Conversion between the two structures is a standard procedure under the Bulgarian Commercial Act. Your company retains its UIC (registration number), tax history, contracts, and bank accounts. Only the internal structure changes.

EOOD to OOD

1. Sole owner decides to admit a new shareholder — documented in a written sole owner decision.
2. Draft a дружествен договор (Articles of Association) — replaces the учредителен акт. This defines share distribution, voting rights, profit-sharing rules, and management structure.
3. The new shareholder contributes capital (if share capital is increased) or acquires part of existing shares.
4. File the changes with the Trade Registry — submit the new Articles of Association, the admission decision, and updated shareholder information.
5. Trade Registry processes the change in 1-3 business days.

Cost: Trade Registry amendment fee is BGN 30 (~EUR 15) for online filing. Legal fees for drafting the дружествен договор and handling the filing typically range from EUR 300-600 depending on complexity.

OOD to EOOD

1. One shareholder acquires all shares — either by purchasing the other partners' shares or through partner withdrawal.
2. Draft an учредителен акт (Founding Act) — replaces the дружествен договор.
3. File the changes with the Trade Registry — submit the share transfer agreement (notarized), the new Founding Act, and updated documentation.
4. Trade Registry processes the change in 1-3 business days.

Partner withdrawal: Under Art. 125 of the Commercial Act, any OOD partner can voluntarily withdraw by filing a written notice 3 months in advance. The withdrawal takes automatic effect after the notice period expires — no general meeting approval is required. The departing partner is entitled to receive the value of their share based on the company's balance sheet.

Common Mistakes

1. Choosing OOD When You Do Not Need It

We regularly see solo entrepreneurs register an OOD "just in case" they bring in a partner later. This creates unnecessary governance overhead from day one — annual general meetings, formal written resolutions for routine decisions, and higher legal costs for amendments. Start with EOOD and convert if and when a real partner materializes. The conversion is straightforward and costs under EUR 500.

2. OOD Without a Proper Partnership Agreement

The worst mistake in an OOD is using a template дружествен договор that does not address real-world scenarios: what happens when a partner wants to exit? How are shares valued? Who has veto rights on key decisions? What if a partner stops contributing? Invest in a properly drafted Articles of Association from the start. The EUR 500-800 in legal fees will save you tens of thousands in dispute resolution later.

3. Ignoring Decision-Making Rules

In an OOD, certain decisions require unanimity of all shareholders — including capital increases and capital reductions. Other decisions are taken by majority vote based on capital share. If you hold 49% and your partner holds 51%, they control all majority-vote decisions. Understand the voting rules before you agree to a share split. Consider protective provisions in the дружествен договор for minority shareholders.

4. Not Planning the Exit

Every OOD should have clear exit provisions in the Articles of Association: how shares are valued upon exit, right of first refusal for remaining partners, timelines for share buyouts, and dispute resolution mechanisms (mediation before litigation). Without these provisions, a partner departure can paralyze the company for months.

Frequently Asked Questions

Disclaimer: This article provides general guidance on EOOD and OOD company structures in Bulgaria based on the Bulgarian Commercial Act as of April 2026. Tax rates: 10% CIT (unchanged since 2007), 5% dividend WHT. Government fees converted from BGN to EUR at the fixed rate of 1.95583. This article does not constitute legal or tax advice. For personalized guidance on your company structure, consult a qualified Bulgarian lawyer. Last updated: April 6, 2026.