2. General Review
Bulgarian law recognizes the following types of commercial companies exhaustively listed in the Commerce Act: (i) general partnership; (ii) limited partnership; (iii) limited liability company (“LLC”) or one-person-owned limited liability company; (iv) joint stock company (“JSC”) or one-person-owned joint stock company; and (v) company limited by shares. All of the above organisations are recognized as separate legal entities. Regardless of the nationality of its founder(s), each company registered in Bulgaria is considered as a Bulgarian legal entity and should be governed in compliance with the effective Bulgarian laws and regulations.
In addition to the five types of commercial companies mentioned above, business may also be conducted in one of the following organisational forms: (i) sole trader; (ii) holding; (iii) branch; (iv) trade representative office (“TRO”); and (v) co-operative.
Under Bulgarian law, sole traders, partners in general partnerships and unlimited partners in limited partnerships and in companies limited by shares have unlimited personal liability to the company’s creditors. On the other hand, the shareholders’ exposure in limited liability companies and joint stock companies, as well as the liability of limited partners in limited partnerships and in companies limited by shares is capped at the amount of their shareholding in the company’s capital.