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PART TWO
TYPES OF MERCHANTS
DIVISION ONE
SOLE PROPRIETOR
CHAPTER EIGHT
NATURAL PERSON MERCHANT
Definition
Article 56
Any natural person possessing capacity whose
domicile is in the country may register as a sole proprietor.
Restrictions
Article 57
Ineligible to be a sole proprietor shall be a
person:
1. who is bankrupt and his rights have not been restored;
2. who has intentionally gone bankrupt and has left unsatisfied creditors.
3. who has been convicted for bankruptcy.
Registration
Article 58
(1) A sole proprietor shall be registered on
the basis of an application which shall state:
1. the name, domicile, address and Unified Civil Code (EGN);
2. the trade name under which the activities shall be carried on;
3. the seat and the address of the registered office;
4. the purposes of the business.
A specimen of the merchant's signature and an affidavit stating that the
person has not been deprived of the right to carry on commercial activities
shall be attached to the application.
(3) (Amended SG 124/1997) The data pursuant to para (1) shall be registered.
(4) (Former Paragraph 2 SG 124/1997)A person may register only one trade name
as a sole proprietor.
Trade Name of Sole
Proprietor
Article 59
A sole proprietor's trade name shall
incorporate without abbreviation the person's given name and either the
surname or patronymic by which he is generally known.
Transfer of Trade Name
Article 60
(1) A sole proprietor's trade name may be
transferred to a third party only together with his enterprise. The consent to
transfer a trade name shall be given in accordance with Article 15, paragraph
1.
(2) A sole proprietor's heirs, on acquiring the enterprise, shall be free to
retain its trade name.
(3) In cases under the preceding paragraphs the new owner's name shall be
added to the trade name.
(4) The transfer shall be registered in the commercial register and shall be
published in the State Gazette.
Deletion from the Commercial
Register
Article 60a
(New, SG - 84-2000)
The entry of the sole proprietor from the
commercial register shall be deleted:
1. in case of termination of his activity or establishment of a residence
abroad - upon his written request to the court;
2. in case of his death - upon written request by his successors;
3. in case of his judicial disability - upon written request by the guardian
or trustee.
DIVISION TWO
STATE-OWNED AND MUNICIPAL ENTERPRISES
CHAPTER NINE
PUBLIC ENTERPRISE MERCHANT
Status
Article 61
A state-owned and municipal enterprise shall be
either a single person limited liability company or a single person joint
stock company. State-owned and municipal enterprises may also form other
companies or groups of companies.
Formation
Article 62
(1) State-owned enterprises shall be formed as
or transformed into single person limited liability companies or single person
joint stock companies pursuant to a procedure to be established by a law.
(2) Municipal enterprises shall be formed as or transformed into single person
limited liability companies or single person joint stock companies through a
resolution of the municipal council.
(3) State-owned enterprises which are not companies may be formed with a law.
DIVISION THREE
COMPANIES
CHAPTER TEN
GENERAL PROVISIONS
Definition
Article 63
(1) A company is an association of two or more
persons for effecting commercial transactions with joint means.
(2) In cases provided by a law a company may be incorporated by one person.
(3) Companies shall be legal persons.
Types of Companies
Article 64
(1) The types of companies are:
1. general partnership;
2. limited partnership;
3. limited liability company;
4. joint stock company;
5. partnership limited by shares.
(2) Only the companies set forth in this Law may be established.
(3) Banking and insurance activities may be carried out only by joint stock
companies or cooperatives.
Partners in a Company
Article 65
(1) A company's founders shall be Bulgarian or
foreign natural or legal persons possessing capacity.
(2) A person may participate in one or more companies to the extent such
participation is not prohibited by law.
(3) (New - SG - 84-2000) If a company participates in another, its rights of a
partner or sole owner shall be executed by the person having the right to
represent it or by explicitly authorized person.
Preliminary Agreement to
Form a Company
Article 66
Persons wishing to form a company may reach
agreement on the acts which must be performed so that the incorporation may be
prepared. For a breach of obligations based on that agreement the parties
shall be liable only for the actual damages caused.
Formation of a Company
Article 67
A company shall be deemed formed on the date of
its registration in the commercial register. The application for registration
shall be filed by the appointed managing organ.
Interpretation of the By-Laws
Article 68
The will of the parties and the objective of
the interpreted provision shall be taken into account when interpreting the by-laws.
Liability for Acts
Performed by the Company Prior to Registration
Article 69
(1) Any acts by the founders performed in the
name of the as yet unincorporated company prior to the date of its
registration shall create rights and obligations for the persons who have
carried out the said acts. When transactions are effected it shall mandatorily
be noted that incorporation is pending. The persons who have effected the
transactions shall be liable jointly and severally for undertaken obligations.
(2) When the transaction has been effected by the founders or a person
authorized by them, the rights and obligations shall be transferred ex lege to
the incorporated company.
Voidability of
Incorporated Company
Article 70
(1) (Amended- SG - 84-2000) The incorporation
of a company shall void only if one of the following offences has been
admitted:
1. if has not been concluded Articles of Partnership or it has not been
concluded in the required form by the law;
2. if the requirement of Art. 159 and 163 have not been fulfilled for the
joint stock company and the partnership limited by shares;
3. if the company has been registered not by the court of its seat;
4. if the purposes of the business of the company contradict the Law or the
Good manners;
5. if the Articles of Partnership or the By-laws do not regulate the trade
name, the purposes of the business of the company or the size of the
contributions, as well as the registered capital of the company when the Law
requires it;
6. if the stipulated by the Law part of the registered capital has not been
installed;
7. if in the founding of the company have participated legally able persons
lees than the number required by the law.
(2) (Amended, SG- -84-2000) Any interested party, as well as the public
prosecutor, may request the district court of the registration of the company,
the company be declared void.In the cases under par. 1, item 3-6, the court
shall declare the company void, if the offence has not been already eliminated
or it has not been eliminated within suitable term defined by the court.
(3) The court's ruling to declare the company void shall be effective from the
date of entry into force. As of that moment the company shall be deemed
terminated and that fact shall be registered on the court's own motion in the
commercial register, after which liquidation shall be carried out by a court-appointed
liquidator.
(4) Where acts in the name of the company declared void have been carried out,
the founders shall be liable jointly and severally and their liability shall
be unlimited.
(5) (New, SG-84-2000) Article 498 of the Civil Procedure Code shall not apply
concerning the company formation.
Protection of Partnership
Article 71
Any partner in a company may bring an action to
the district court of the company's seat to protect its right to be a partner
and its individual rights as a partner, when these have been violated by the
company's organs.
Non-Monetary Contributions
Article 72
(1) Should a partner or, respectively, a
shareholder, make a non-monetary contribution, the articles or, respectively
the by-laws, shall state the name of the contributor, a full description of
the non-monetary contribution, its monetary value, and the grounds for the
contributor's rights.
(2) (Supplemented -SG 103-1993, Amended, SG-84-2000) The contribution in a
limited liability company, a joint stock company or a partnership limited by
shares shall be valued by three experts appointed by the court which shall
register the company, at the request of the contributor. The valuation shall
comprise the full description of the non-monetary contributions, the
evaluation method, the obtained assessment and its compliance with the size of
the partners' interest in the capital or with the number, nominal value or
emissions value of the shares, registered by the contributor. The valuation
shall be presented for entry in the register, after it has been accepted by
the court.
(3) (New, SG-84-2000) The valuation stated in the articles of the company or,
respectively, the by-laws, shall not be higher than the valuation assigned by
the experts before the court.
(4) (Previous Par. 3, SG-84-2000) If the contributor do not agree with the
valuation, he may participate in the company with monetary contribution or may
withdraw from participation in the company.
(5) (Previous Par. 4, SG-84-2000) The contribution shall not have as a subject
future labor or services.
Paying Up of Non-Monetary
Contributions
Article 73
(1) The contribution of a right for the
creation or transfer of which a notarial form is required shall be effected
with the articles. For contributions to a joint stock company the consent in
writing of the contributor and a description of the contribution with a
notarized signature shall be attached to the by-laws.
(2) The contribution of any other rights shall be made pursuant to the form
the law provides for their creation or transfer.
(3) (Suplemented, SG-84-2000) The contribution of a claim shall be made with
the articles or, respectively, the by-laws, and the contributor shall attach
evidence of having notified the debtor for the transfer of the claim. The
requirement for notification shall not apply if the claim regards the company
itself;
(4) Title to a contribution shall be acquired from the moment of the company's
formation.
(5) (Amended SG 104/1996) Where a contribution has as a subject a real right
over real property, the respective organ of the company shall, after such
right has arisen, present an abstract of the articles, certified by a
recordation judge, for recording in the recordation office and, whenever
necessary, separately the contributor's consent as well. Such organ shall
present an abstract of the by-laws certified by a recordation judge and the
contributor's consent. In making the recording the recordation judge shall
ascertain the contributor's rights.
Abolishment for remission and
deduction
Article 73a (New, SG- 84-2000)
The obligation of the partners in a limited
liability company and of the shareholders in a joint stock company for
installments in the registered capital, can not be remitted, except in case of
its reduction, neither it can be deducted.
Article 73b (New, SG-
84-2000)
Hidden non-monetary installment
(1) A decision of the general meeting of the
shareholders shall be required in case a joint stock company within two years
from its founding, acquires rights at a price exceeding with 10 % of its
capital from a person who has registered stocks at the founding of the company
and Art. 72, par. 2 shall apply for the transferred rights.
(2) The transaction shall enter into force from the entry of the decision of
the general meeting in the commercial register. The decision shall be
published in State Gazette.
(3) Paragraphs 1 and 2 shall not apply for rights acquired during the usual
activity of the company, at the stock exchange or under supervision of the
court or state body.
Repeal of a Resolution of
the Company's General Meeting
Article 74
(1) Every partner or shareholder may bring an
action before the district court of the company's seat for the repeal of a
resolution of the general meeting when such resolution is inconsistent with a
mandatory provision of the law or with the articles or, respectively, the by-laws
of the company. The action shall be brought against the company.
(2) The action shall be brought within 14 days of the date of the meeting when
the plaintiff was present or was duly notified, or otherwise within 14 days of
learning of the resolution, but not later than three months after the date of
the general meeting.
(3) A partner or shareholder may intervene in a proceeding in accordance with
the provisions of the Code of Civil Procedure. It may carry on the proceedings
even after the withdrawal of the original plaintiff.
Subsequent Voiding of
Annulled Resolution
Article 75
(1) The instructions given by the court in
repealing a general meeting resolution concerning the interpretation of the
law, the memorandum of association or the by-laws shall be binding on the
general meeting whenever it discusses the same issue again.
(2) Resolutions or acts by the company's organs which are in contravention of
an effective court ruling are null and void. Each partner or shareholder may
at any moment refer to such nullity or request its proclamation by the court.
CHAPTER ELEVEN
GENERAL PARTNERSHIP
Section I
General Provisions
Definition
Article 76
A general partnership shall be a company formed
by two or more persons for the purpose of effecting commercial transactions by
occupation under a joint trade name. The partners shall be liable jointly and
severally and their liability shall be unlimited.
Trade Name
Article 77
The trade name of a partnership shall consist
of the surnames or trade names of one or more of the partners with the
extension "sabiratelno druzhestvo" [general partnership] or "sadruzhie"
("s-ie") [partners].
Content of Articles of
Partnership
Article 78
A partnership's articles shall be drawn up in
writing with notarized signatures of the partners and shall state:
1. the name and domicile or, respectively, the trade names and seat, as well
as the address of each partner;
2. (Amended SG 124/1997) the trade name, the seat, the registered office and
the purposes of the partnership;
3. the type and amount of each partner's contribution and the valuation
thereof;
4. the manner of distribution of profits and losses among the partners;
5. the manner of management and representation of the partnership.
Registration of the
General Partnership
Article 79
(1) The application for registration of the
general partnership in the commercial register shall be signed by all partners
and the articles of partnership shall be attached to it.
(2) Registered in the register shall be the information under items 1, 2 and 5
of the preceding article.
(3) The persons authorized by the articles of partnership to represent the
partnership shall submit specimen signatures.
Section II
Partners' Relationships
Primacy of the Articles
Article 80
The partners' legal relationships shall be
governed by this Section, unless the articles of partnership provide otherwise,
with the exception of the provision of Article 87.
Compensation for Expenses
and Damages
Article 81
(1) A partner shall be entitled to
reimbursement for necessary expenses incurred in the course of the
partnership's business and to compensation for damages suffered in connection
with such business.
(2) The partnership shall pay the interest as set by law on such expenses
incurred or damages suffered by a partner.
Obligation to Pay Interest
Article 82
A partner which is in arrears in paying its
monetary contributions or receives or, respectively, takes partnership money
for itself without being entitled to do so, shall owe the partnership the
repayment of all such moneys and the interest as set by law. Should the
damages for the partnership be greater, the partnership may seek compensation
for the balance.
Prohibition on Competition
Article 83
(1) A partner may participate in another
company or enter into transactions related to the purposes for which the
partnership was set up, on its own account or on account of a third party,
only with the consent of the other partners.
(2) In case of a violation of paragraph 1 the partnership may request
compensation for the damages suffered or state that it shall assume the rights
and obligations under the concluded transactions. The statement must be made
in writing within one month of acquiring knowledge of the transaction, but not
later than one year of its conclusion, and be forwarded to the partner and the
third party.
(3) The right to an action pursuant to the preceding paragraph shall expire
after three months from the date of the partners' becoming aware of the said
act, or after three years of the commitment of the said acts when the partners
have no knowledge of them.
Management
Article 84
(1) Each partner shall be entitled to take part
in the management of the partnership's business, except when management has
been assigned with the articles of partnership to one or several of the
partners or to a third party.
(2) The consent of all partners shall be required for the acquisition or
disposal of real rights over real property, for the appointment of a manager
who is not a partner, or for executing an agreement for a cash loan exceeding
a sum fixed in the articles of partnership.
Revocation of Management
Assignment
Article 85
The resolution to assign the management to one
or several partners may be revoked by the district court of the partnership's
seat upon an action brought by some of the partners, if the managers have
committed a breach of their obligations, as well as on other grounds provided
for in the articles of partnership. The ruling shall be registered upon the
court's own motion.
Partner's Right to
Exercise Control
Article 86
A partner which does not participate directly
in the management shall be entitled to obtain information on the partnership's
business, to inspect the books, the partnership and other papers, and to ask
for explanations from the managers.
Resolutions
Article 87
Where the articles of partnership require that
resolutions be adopted with a majority vote, each partner shall be entitled to
one vote. Resolutions shall be recorded in the minutes book.
Section III
Partners' Relationship With Third Parties
Liability of the General Partnership
Article 88
When bringing an action against the partnership
the plaintiff may also name as defendants one or several of the partners.
Forcible execution shall be directed first against the partnership, and, in
case of impossibility for satisfaction, against the partners.
Representation
Article 89
(1) Each partner shall represent the
partnership, unless the articles of partnership provide otherwise.
(2) A limitation upon the representative powers of a partner shall not be
binding upon bona fide third parties if it is not registered in the commercial
register.
Revocation of
Representative Powers
Article 90
The representative powers of a partner may be
revoked pursuant to Article 85.
Partners' Plea
Article 91
A partner may, in addition to the partnership's
pleas, make its personal pleas before the partnership's creditors.
Liability of Newly
Admitted Partners
Article 92
The liability for all of the partnership's
debts of a newly admitted partner in an existing partnership shall equal that
of the other partners.
Section IV
Dissolution of a Partnership and Termination of a Partners' Participation
Grounds for Dissolution
Article 93
A general partnership shall be dissolved upon:
1. expiration of its term or under other circumstances provided in the
articles of partnership;
2. the agreement of the partners;
3. declaring the partnership bankrupt;
4. where there is no other provision, death or the placing under judicial
disability of a partner or dissolution of a partner which is a legal person;
5. request of the trustee in bankruptcy in case of bankruptcy of a partner;
6. notice of termination from a partner;
7. a court ruling in the cases established by law.
Dissolution upon Notice
from a Partner
Article 94
Where a partnership has been formed for an
indefinite period of time each partner may request its dissolution by sending
at least six months prior notice in writing to all remaining partners, unless
the articles of partnership provide otherwise.
Dissolution by Court Order.
Dismissal of Partner
Article 95
(1) The district court may dissolve a
partnership upon an action brought by a partner when another partner has
deliberately or in gross negligence omitted to perform an obligation of its
under the articles of partnership or the performance of the obligation has
become impossible. This rule shall also apply whenever a partner acts against
the interests of the partnership.
(2) Upon an action brought by a partner the court may, instead of dissolving
the partnership, dismiss the partner which is at fault.
Dissolution upon Notice
from a Private Creditor of a Partner
Article 96
(1) The creditor of a partner which in the
course of six months cannot be satisfied by forcible execution upon the
debtor's personal property may attach that partner's liquidation share and
request the dissolution of the partnership upon a notice in writing pursuant
to the procedure set forth in Article 94.
(2) A partnership shall not be dissolved in case the partnership or the
remaining partners repay the debt following the attachment pursuant to the
preceding paragraph. In this case only the participation of the debtor partner
shall be terminated, unless the partners decide otherwise.
Perpetuation of
Partnership
Article 97
(1) The partners may provide in the articles
that the partnership shall continue to exist in the case of termination of the
participation of a partner. In this case the remaining partners shall buy out
the share of the partner which has terminated its participation, and in the
case of a partner's death, those of its heirs who wish shall be admitted as
partners. The heirs shall state their intent to be admitted as partners not
later than three months from the date of the opening of the succession.
(2) In case the heirs do not wish to be admitted as partners, as well as in
case of termination of the participation of a partner, the partnership shall
pay the value of the share in the partnership's assets of the decedent or the
partner which has terminated its membership, and their share in the annual
profits for the period up to the death or termination of the participation.
Limitation
Article 98
(1) The right of action against a partner for
obligations of the partnership shall expire by limitation after five years,
except where the right of action against the partnership is subject to a
shorter limitation.
(2) The limitation period shall run from the date on which the dissolution of
the partnership or the termination of the participation of the partner is
registered in the commercial register.
(3) An interruption of the limitation with respect to the dissolved
partnership shall also apply to those partners which were partners at the time
of the dissolution.
CHAPTER TWELVE
LIMITED PARTNERSHIP
Section I
General Provisions
Definition
Article 99
(1) A limited partnership shall be formed with
articles of partnership between two or more persons for carrying out
commercial activities under a common trade name, whereby for the partnership's
obligations one or more of the partners shall be liable jointly and severally
and their liability shall be unlimited, and the remaining partners' liability
shall not exceed the amount of the agreed upon contribution.
(2) (Repealed, Former Paragraph 3 SG 103/1993) The provisions for the general
partnership shall apply mutatis mutandis to the limited partnership, to the
extent this chapter does not provide otherwise.
Form
Article 100
The articles of partnership shall be drawn up
in writing with notarized signatures of the partners.
Trade Name
Article 101
(1) The company's trade name shall contain the
extension "komanditno druzhestvo" [limited partnership] or the
abbreviation "KD" and the name of at least one of the general
partners.
(2) The names of limited partners shall not be incorporated in the trade name
of a limited partnership, but in case this has occurred those partners shall
be deemed to bear unlimited liability vis-à-vis the creditors of the
partnership.
Content of the Articles of
Partnership
Article 102
A limited partnership's articles shall state:
1. the trade name of the partnership;
2. the seat and the registered office;
3. the purposes for which the partnership is set up;
4. the names or, respectively, the trade names and the addresses of the
partners and the extent of their liability;
5. (Repealed - SG - 84-2000)
6. the type and amount of the partners' contributions;
7. the manner of distribution of profits and losses among the partners;
8. the manner of management and representation of the partnership.
Registration
Article 103
A limited partnership shall be registered with
the commercial register of its seat by the general partners, which shall file
the articles of partnership and specimen signatures.
Section II
Partners' Legal Relationships
Primacy of the Articles of Partnership
Article 104
The partners' legal relationships, to the
extent the articles of partnership contain no provision to the contrary, shall
be governed by this Section.
Management
Article 105
A limited partnership shall be managed and
represented by the general partners. A limited partner has no right to manage
the partnership and block resolutions of the general partners.
Acts by a Limited Partner
Article 106
Should a limited partner effect transactions in
the name and on behalf of the partnership without being the partnership's
manager or agent it shall be personally liable, except when the partnership
ratifies the transaction.
Prohibition Concerning an
General Partner
Article 107
The rule of Article 83 shall apply to a general
partner.
Limited Partner's Rights
Article 108
A limited partner may inspect the partnership's
books and request a transcript of its annual financial statement. In case of
refusal the district court shall, on the motion of such partner, order that
these be placed at the disposal of the partner.
Limited Partner's
Participation in Profits and Losses
Article 109
(1) Where a limited partner has not paid in
full the stipulated contribution, such contribution shall be deducted from its
share of the profits.
(2) A limited partner shall participate in losses up to the amount of the
stipulated contribution. It shall not be bound to pay back any profits it has
received to offset subsequent losses.
Prohibition on
Distribution of Profits
Article 110
Where at the end of a calendar year it is
established that a partnership has shown losses which affect the contributions
made, no profits shall be distributed before the contributions have been
restored to their stipulated amounts.
Section III
Partners' Legal Relationships With Third Parties
Liability of Limited Partner
Article 111
A limited partner shall be liable towards the
partnership's creditors to the extent of its stipulated contribution, even
when it has not been paid in full.
Liability Prior to
Registration
Article 112
A limited partner shall bear unlimited
liability with respect to transactions entered into by it in the name of the
partnership prior to its formation, or after such formation whenever the
creditor did not know that it was contracting with a limited partner.
CHAPTER THIRTEEN
LIMITED LIABILITY COMPANY
Section I
General Provisions
Definition
Article 113
A limited liability company may be formed by
one or more persons which shall be liable for the company's obligations with
their contributions to the company's registered capital.
Form of Articles of
Incorporation
Article 114
(1) The articles of incorporation shall be
executed in writing.
(2) A partner may be represented by an agent holding a special power of
attorney with notarized signature.
(3) When the limited liability company is formed by one person, a constitutive
deed shall be drawn up instead of articles of incorporation.
Content of Articles of
Incorporation
Article 115
The articles of incorporation shall state:
1. (Amended SG 124/1997) the trade name, the seat and the registered office of
the company;
2. the purposes and the time period for which the company is being set up;
3. the names or, respectively, the trade names of the partners;
4. (Supplemented SG 84-2000) the registered capital. Where the full amount has
not been paid at incorporation, the articles shall set the time periods and
terms for payment. The term for the installment of the full size of the
registered capital shall not be longer than 2two years from the founding of
the company, respectively from its increase.
5. the interests of the partners;
6. the management and manner of representation;
7. the privileges of the partners, where agreed upon;
8. other rights and obligations of the partners.
Trade Name
Article 116
(1) The trade name of a company shall contain
the extension "druzhestvo s ogranichena otgovornost" [limited
liability company] or the abbreviation "OOD".
(2) Should all the capital be owned by one person, the trade name shall
contain the extension "ednolichno OOD" [single person limited
liability company]
Capital and Shares
Article 117
(1) (Amended, SG No. 100/1997) The registered
capital of a limited liability company shall be not less than BGN 5,000. It
shall consist of the interests of the company's partners, and no interest
shall be smaller than BGN 10.
(2) The sum total of all interests shall be equal to the registered capital,
and the value of each interest shall be a multiple of 100.
(3) The interests of the individual partners may be of unequal value.
(4) An interest may be held jointly by several persons.
Liability of Founders
Article 118
(1) The founders shall be liable jointly and
severally before the company for damages caused in the course of its
formation, if they have not acted with due care.
(2) The founders shall not be entitled to remuneration for the formation of
the company from the registered capital.
Company Registration
Article 119
(1) For registration of a company in the
commercial register it shall be necessary:
1. to file the articles of incorporation;
2. to have an appointed manager or managers;
3. (Amended SG - 84-2000) each partner to have paid at least one third of its
interest, but not less than BGN 10;
4. at least 70 per cent of the registered capital to have been paid.
(2) The data under items 1, 2, 3, 4 (only the amount of the registered
capital) and 6 of Article 115 shall be registered in the register and
published.
(3) ( New - SG 114/1999) In order, acting as a investment intermediary, to
enter in the commercial register, as well as other activities for which the
Law provides an accomplishment with a permission from a state body, the said
permission shall be presented.
(4) ( New - SG 84/2000) In case of amendment and supplement of the company
contract, the representing body of the company shall certify a copy of the
company contract with all the amendments and supplements and shall present it
at the commercial register.
Section II
Partners' Rights and Obligations
Shares
Article 120
(1) Each partner shall pay up or contribute its
interest as provided in the articles of incorporation.
(2)(Repealed SG 84-2000).
Consequences of Failure to
Pay Up or Contribute One's Share
Article 121
(1) The failure to pay up or contribute an
interest shall constitute grounds for the expulsion of a partner from the
company. A partner which has failed to pay up or contribute its interest
within a specified period shall owe interest at a rate determined by operation
of law, and compensation for damages in excess of such interest.
(2) Where the interest cannot be paid up or contributed by the partner owing
such payment or contribution, and cannot be sold to a third party, the
remaining partners must pay up the balance in proportion to their interests or
reduce the company's registered capital in accordance with established
procedures.
Admitting a New Partner
Article 122
A new partner shall be admitted by the general
meeting upon an application in writing, in which it shall state that it
accepts the terms of the articles of incorporation. The resolution to admit
the partner shall be registered in the commercial register.
Partners' Rights
Article 123
Each partner shall be entitled to take part in
the management of the company, in the distribution of profits, to be informed
of the company's affairs, to review the company's books and to liquidation
proceeds.
Partners' Obligations
Article 124
The partners must pay up or contribute their
interests, take part in the management of the company, provide assistance for
the carrying out of its activities, as well as carry out the resolutions of
the general meeting.
Termination of
Participation in a Company
Article 125
(1) The participation of a partner shall be
terminated upon:
1. death or disability;
2. expulsion;
3. dissolution and liquidation, in the case of a legal person;
4. bankruptcy.
(2) A partner may terminate its participation in a company with a notice in
writing made at least 3 months prior to the termination.
(3) Accounts shall be settled on the basis of the balance sheet for the last
day of the month of termination of the participation.
Expulsion of a Partner
Article 126
(1) The general meeting may expel a partner
which has not paid up or contributed its interest. It may provide an
additional period for meeting the obligation upon the expiration of which the
partner shall be deemed expelled. The manager shall inform the partner in
writing of the general meeting resolution.
(2) In the case of paragraph 1 the partner shall lose its title to any
contributions made.
(3) A partner may be expelled by the general meeting following a notice in
writing where it:
1. fails to perform its obligations for providing assistance for the carrying
out of the activities of the company;
2. fails to abide by resolutions of the general meeting;
3. acts against the interests of the company.
4. (New, SG 84-2000) in the cases under Art 121.
Company Share
Article 127
Each partner shall have a company interest in
the company's assets the amount of which shall be determined in proportion to
its interest in the registered capital, unless otherwise agreed.
Certificate of
Participation
Article 128
The certificates issued to the partners for
evidencing their participation in the company shall not be negotiable
securities.
Transfer of Shares
Article 129
(1) An interest in a limited liability company
may be transferred and inherited. The transfer of an interest from one partner
to another shall be unrestricted, and the transfer to third parties shall be
subject to the provisions for admitting new partners.
(2) An interest in a limited liability company shall be transferred with
notarized signatures and shall be registered in the commercial register.
Liability upon Transfer
Article 130
The transferee shall be liable jointly and
severally with the transferor for any payments to the registered capital due
at the date of transfer.
Partition of a Share
Article 131
The partition of an interest shall be
admissible only with the consent of the partners, unless otherwise agreed.
Joint Ownership of an
Interest
Article 132
Where one interest belongs to several persons
they may exercise their rights over it only jointly. They shall be liable
jointly and severally for any obligations arising from such interest. The
joint owners of the interest shall designate a person to represent them before
the company.
Profits and Payments
Article 133
(1) The partners cannot claim their interests
as long as the company exists. They are only entitled to part of the profits
in proportion to their interests, unless otherwise agreed.
(2) No interest on the partner's profits may be agreed upon.
Additional Monetary
Contributions
Article 134
(1) For covering losses and in case of
temporary shortage of cash the partners may be required, by a general meeting
resolution, to make additional monetary contributions within a fixed period.
The additional contributions shall be in proportion to the respective
interests in the capital, unless otherwise determined.
(2) The partners shall bear the same liability for failure to pay up the
additional contributions as for failure to pay up their interests.
(3) The additional contributions shall not affect the company's registered
capital. It may be agreed that the company shall pay interest on them.
Section III
Management
Types of Organs
Article 135
(1) The company's organs shall be:
1. the general meeting;
2. the manager (managers).
(2) The manager does not necessarily have to be a partner.
General Meeting of
Partners
Article 136
(1) The general meeting of partners shall
consist of the partners.
(2) The company's manager shall take part in the general meeting's sittings in
a consultative capacity.
(3) Where the number of employees exceeds 50, they shall be represented in the
general meeting in a consultative capacity.
Powers of the General
Meeting
Article 137
(1) The general meeting shall:
1. amend the articles of incorporation;
2. (Amended SG 103-1993) admit and expel partners, give consent on the
transfer of an interest to a new partner;
3. approve the annual report and balance sheet, distribute the profits and
resolve on their payment;
4. resolve on the increase or decrease of the registered capital;
5. appoint a manager, fix his remuneration and relieve him of liability;
6. resolve on setting up or closing down branches and participation in other
companies;
7. resolve on the acquisition or alienation of real property and real rights
therein;
8. resolve on bringing a company action against the manager or comptroller and
appoint an attorney to proceed with the suits against them;
9. resolve on additional monetary contributions.
(2) Each partner has as many votes in the general meeting as its interest of
the capital, unless the articles provide otherwise.
(3) (Amended SG 103-1993, SG 84-2000) Resolutions under items 1, 2 and 9 of
paragraph 1 shall be adopted by a majority of more than three thirds of the
capital and the decisions under item 4 - unanimously by all partners, and the
articles of incorporation may provide for a larger majority. The partner whose
expulsion is put to a vote shall not vote. All remaining resolutions shall be
adopted with a majority of the capital, unless the articles provide otherwise.
(4) The partners may vote by proxy only when such proxy holds a special power
of attorney in writing; the above rule shall not apply to partners which are
legal persons or to agents by operation of law.
(5) The general meeting shall adopt resolutions on labor and social issues
only after hearing the position of a representative of the company's
employees.
Convening a General
Meeting
Article 138
(1) A general meeting shall be convened by the
manager at least once every year.
(2) The manager shall also convene a general meeting upon the request in
writing of the partners whose interests amount to at least one tenth of the
capital. Should the manager fail to convene a general meeting within two
weeks, the partners which have requested its convening shall be entitled to do
so.
(3) The manager shall convene a general meeting immediately should the losses
exceed one fourth of the registered capital.
Notice of General Meeting
Article 139
(1) The general meeting shall be convened by a
notice in writing received by each partner at least 7 days before the date of
the meeting, unless the articles provide otherwise. The notice shall specify
the business to be transacted.
(2) general meeting resolutions may be adopted in absentia when all partners
have stated in writing their consent for the resolution.
Registration of
Resolutions
Article 140
(1) The general meeting resolutions which are
related to registrations pursuant to Article 119, paragraph 2 shall be
registered in the commercial register.
(2) Paragraph 1 shall apply to the resolutions of the owner of a single person
company.
(3) (New, SG 84-2000) The decision regarding amendment and supplement of the
articles of incorporation, capital increase or decrease, admittance or
expulsion of a partner, transformation and termination of the company, as well
as appointment of a liquidator shall enter into force from their entry in the
commercial register.
Management and
Representation
Article 141
(1) The manager shall organize and direct the
activities of the company in accordance with the law and the general meeting
resolutions.
(2) (Supplemented, SG 84-2000)The company shall be represented by the manager.
Where several managers have been appointed each one of them may act
independently, unless the articles provide otherwise. Other restrictions to
the representative power of the manager shall not have effect for third
parties.
(3) (Amended, SG 84-2000) In the commercial register shall be registered the
name of the manager, who shall present a notary certified consent with a
specimen of the signature. The registration shall be published in the State
Gazette.
Prohibition on Competition
Article 142
(1) Without the consent of the company the
manager may not:
1. effect commercial transactions in his own or in a third party's name;
2. participate in partnerships and partnerships limited by shares, and in
limited liability companies;
3. hold positions in managing organs of other companies.
(2) The limitations under paragraph 1 shall apply when the activities carried
out are similar to those of the company.
(3) For violations of his obligations under paragraph 1 the manager, when not
a partner, may be dismissed without notice and without compensation. He shall
owe compensation for damages caused to the company.
Company Books
Article 143
(1) The company shall keep a book of interests
and minutes book on the general meeting resolutions.
(2) The value of each partner's interest, the payments made and all relevant
changes thereto shall be recorded in the book of interests.
(3) The manager shall be responsible for the regular keeping of the company
books.
Comptroller
Article 144
(1) The articles may provide for the
appointment of a comptroller (comptrollers) who shall supervise the observance
of the articles, the taking of proper care of the company's property and shall
report to the general meeting.
(2) The following may not be comptrollers:
1. the managers, their deputies and company employees;
2. spouses, descendants or ascendants and collateral relatives to the third
degree of the persons under the preceding item;
3. persons who with a sentence have been deprived of the right to hold a
position of financial accountability.
(3) In a single person company the comptroller shall be appointed by the
owner.
Liability of the Manager
and the Comptroller
Article 145
The manager and the comptroller shall be
financially liable for damages caused to the company.
Auditors
Article 146
(1) The company's annual financial statement
shall be audited by one or several auditors who shall be certified public
accountants.
(2) Such audit shall be a condition for approving the annual financial
statement.
(3) The auditors shall be appointed by the general meeting before the
expiration of the calendar year. They shall be liable for the proper and
unbiased audit and for maintaining confidentiality.
(4) (New, SG 84-2000) The audited and approved annual financial statement
shall be presented to the commercial register and statement concerning this
shall be published in the State Gazette, unless the Law Stipulates that the
annual financial statement of the company may not be audited by certified
public accounts.
Management of a Single
Person Limited Liability Company
Article 147
(1) The single owner of the capital shall
manage and represent the company either personally or through an appointed by
it manager. In case the owner is a legal person the manager of such legal
person or a person designated by him shall manage the company.
(2) (Amended, SG 84-2000) The single owner of the capital shall resolve on the
issues falling within the powers of the general meeting, and a protocol in the
required form for the general meeting resolutions shall be made.
(3) (New, SG 84-2000) The contracts between the single owner and the company
in case it is represented by the single owner shall be concluded in a written
form.
Section IV
Amending the Articles of Incorporation
Increase of Registered Capital
Article 148
(1) The registered capital may be increased
through:
1. increasing the value of the interests;
2. subscribing new interests;
3. admitting new partners.
(2) The partners may increase the value of the interests pro rata to their
holdings, unless the articles of incorporation or the general meeting
resolution provide otherwise.
Reduction of Registered
Capital
Article 149
(1) (Amended SG 70/1998, SG 84/2000) The
registered capital may be reduced to the minimal amount stipulated by the Law
by a resolution to amend the articles of incorporation and as observing the
requirements of Articles 150 and 151. In these cases, it shall be possible to
increase or decrease the capital simultaneously under the conditions of Art.
203.
(2) The resolution shall state the purpose of the reduction, its amount and
the manner through which it shall be accomplished.
(3) The reduction may be effected through:
1. reducing the value of interests;
2. cancellation of the interest of a partner which has terminated its
participation;
3. relieving of the obligation to pay up the unpaid portion of the registered
capital.
Notice to Creditors
Article 150
(1) The resolution to reduce the registered
capital shall be published in the State Gazette. In the notice the company
shall state that it is ready to provide security for claims or to pay its
obligations as of the date of publication to the creditors which do not agree
with the reduction.
(2) The creditor's consent for the reduction shall be assumed if within three
months of the publication they do not express in writing their objection.
(3) (Repealed, SG 84-2000)
Registration of the Reduction
Article 151
(1) The amendment to the articles with which
the registered capital is reduced shall be registered upon expiration of the
time period specified in the previous article.
(2) Attached to the application for registration shall be proof of observance
of the requirements of Article 150 and a statement in writing of the manager
that either security has been provided or the debt has been repaid to the
creditors which have not consented to the reduction.
Managers' Liability
Article 152
Should the data for registration of the
reduction provided by the manager prove to be untrue, he shall be liable for
the damages suffered by the creditors to the extent they could not be
satisfied by the company. In the case of several managers they shall be liable
jointly and severally.
Payments Pursuant to
Reduction
Article 153
(Supplemented, SG 84-2000) Payments to the
partners pursuant to a reduction of the registered capital may be made only
after the reduction has been registered in the commercial register and the
disagreed with the reduction creditors have received indemnification or
payment.
Section V
Dissolution and Liquidation of the Company
Dissolution of the Company
Article 154
(1) The company shall be dissolved:
1. with the expiration of the term set in the articles;
2. (Amended, SG 84-2000) upon decision of the partners adopted with a 3\4
majority of the interests, unless the articles provide otherwise;
3. through a consolidation or merger with a joint stock company or another
limited liability company;
4. upon being declared bankrupt;
5. by a decision of the district court in cases provided for by law.
(2) The articles may provide for other grounds for dissolution of the company.
Dissolution by a Decision
of the Court
Article 155
The company may be dissolved by a decision of
the district court of its registration upon:
1. an action by the partners showing serious cause. The action shall be
brought against the company if the plaintiffs' interests represent more than
one fifth of the registered capital;
2. (Amended, SG 84-2000) an action by the public attorney where the company's
activities are in contradiction to the Law.
Liquidation of a Company
Article 156
(1) In the case of dissolution of a company
pursuant to Article 154, items 1, 2 and 5 and Article 155 a liquidation
procedure shall be initiated.
(2) The company's liquidator shall be its manager, except where another person
has been appointed with the articles or with a resolution of the general
meeting.
(3) Upon request of the comptroller or of partners holding at least one tenth
of the interests the court may appoint another liquidator.
(4) The liquidation of the company shall be performed pursuant to Chapter
Seventeen.
Dissolution of a Single
Person Limited Liability Company
Article 157
(1) A company in which the capital is owned by
a single natural person shall be dissolved upon the death of such person,
except where provided otherwise or where the heirs wish to continue its
activities.
(2) Where the capital is owned by a single legal person the company shall be
dissolved with the dissolution of that legal person.
CHAPTER FOURTEEN
JOINT STOCK COMPANY
Section I
General Provisions
Definition
Article 158
(1) A joint stock company is a company the
capital stock of which is divided into shares. The company shall be liable
before its creditors with its assets.
(2) The trade name of the joint stock company shall include the extension
"aktsionerno druzhestvo" [joint stock company] or the abbreviation
"AD".
Number of Founders
Article 159
(1) (Amended, SG 84-2000) The founders of a
joint stock company might be one or more than one natural or legal persons.
(2) In certain cases provided by law a joint stock company may be formed by
one person. The constitutive deed shall approve the by-laws, specify the
system of management and appoint the first supervisory board or board of
directors and set their mandate.
Founders
Article 160
(1) (Amended, SG 84-2000) Founders are those
persons who have registered shares at the constitutive deed of the company.
(2) Persons declared bankrupt may not be founders.
Capital and Shares
Article 161
(1) The capital stock and the value of the
shares shall be designated in BGN.
(2) (Amended, SG No. 100/1997, SG 84-2000) The minimum value of the capital
stock shall be 50,000 BGN.
(3) The minimum amount of the capital stock required for performing banking or
insurance activities shall be determined by a separate law.
(4)(Supplemented, SG 84-2000) The capital stock must be fully subscribed.The
company cannot subscribe shares from its capital stock. In case the said
prohibition is violated, the founders shall be jointly liable for the
installments for the registered stocks.
Nominal Value of a Share
Article 162
(Amended, SG 84-2000) The minimum nominal value
of a share shall be 1 BGN . Larger nominal values of shares must be determined
in integer BGN.
Section II
Incorporation
Constituent Meeting
Article 163
(Amended - SG No. 63/1995, 84/2000)
(1) The joint stock company shall be
constituted on a constituent meeting where participants shall be all persons
that register shares. A proxy having written explicit letter of attorney with
a notary certified signature might represent a founder at the constituent
meeting.
(2) Shares shall be registered at the constituent meeting.
(3) The constituent meeting shall:
1. adopt a resolution on incorporating the company;
2. adopt the by-laws;
3. establish the size of the of the expenses on constitution;
4. appoint a supervisory board or, respectively, a board of directors.
(4) The resolutions on items 1-3 of the preceding paragraph shall be adopted
unanimously and a protocol shall be issued for which Art. 232 shall apply.
(5)In case a joint stock company is founded by one person, shall be issued a
constituent act.
Content of the Prospectus
Article 164
(Repealed - SG No. 63/1995)
Content of the By-laws
Article 165
(Amended - SG 84/2000)
The by-laws shall contain:
1. the trade name, the seat and the registered office of the company;
2. the purposes and the term, if any;
3. the amount of the capital stock, the type and number of shares and the
nominal value of each share;
4. the company's bodies and their mandate and number of members;
5. the type and value of the non-monetary contributions, if any, the persons
making them, the number and nominal value of the shares which they shall
receive;
6. the advantages, if any, which the said founders, by name, have reserved for
themselves; if suc are stipulated;
7. the founders' right to appoint the first supervisory board or board of
directors of the company and to determine its mandate, if such a mandate is
foreseen,;
8. the way of the profit distribution;
9. the way of convening the general meeting;
10. other terms with respect to the incorporation, existence and dissolution
of the company.
Installments
Article 166
(1) (Amended - SG 84/2000) Monetary
installments shall be made to a bank account of the company opened by the
managing board, respectively the board of directors, with an indication of the
name of the payer, and any payments with deposited sums shall be effected with
unanimous decision of the said body.
(2) The provisions of Articles 72 and 73 shall apply mutatis mutandis to
non-monetary contributions.
(3) (New, SG 84-2000) If within 3 months term managing board, respectively the
board of directors, does not certify to the bank that the company has been
claimed for registration, the payers can draw back the full size of the
installments.
Interim Certificate
Article 167
(1) (Amended - SG 84/2000) The shareholders
receive interim certificates signed by an authorized member of the managing
board, respectively the board of directors, for their installments to
subscribe shares.
(2) The shareholders shall receive their shares upon presentation of interim
certificates.
Constituent Meeting
Article 168
(Repealed, SG 84-2000)
Incorporation without
Subscription
Article 169
The raising of capital may also be done at the
constituent meeting, if the remaining requirements have been met. In this case
at least two persons which have subscribed shares and which represent at least
half of the subscribed capital must be present.
Objectives of the
Constituent Meeting
Article 170
(Repealed, SG 84-2000)
Incorporation of a Company
with the Subscribed Capital
Article 171
(Repealed, SG 84-2000)
Content of the By-Laws
Article 172
Founders' Liability
(Repealed, SG 84-2000)
Article 173
(Repealed, SG 84-2000)
Requirement for
Registration of the Company
Article 174
(1) For the registration of a joint stock
company in the commercial register it shall be necessary that:
1. the by-laws have been adopted;
2. the full amount of the capital stock has been subscribed;
3. (Amended, SG 84-2000) The stipulated by the by-laws part of the value of
the share to be paid up but not less than 25 per cent of the nominal or the
stipulated by the by-laws emission value;
4. the members of the board of directors or, respectively, the supervisory
board have been appointed;
5. the remaining requirements of the law have been fulfilled.
(2) (Amended, SG 84-2000) The data pursuant to Article 165, items 1-4, 5/only
the type and the value of the non-monetary installment shall be registered/
and 10 shall be entered in the commercial register and the entry shall be
published in The date of the court decision for entry in the commercial
register shall also be published. The constituent protocol and the list with
the persons who have registered shares at the company's constitution shall be
certified by the managing board, respectively the board of directors and shall
be presented to the register.
(3) (New - SG 114/1999) In order, insurance and banking transactions, acting
as a investment intermediary, investment company, stock exchange to enter in
the commercial register, as well as other activities for which the Law
provides an accomplishment with a permission from a state body, the said
permission shall be presented.
(4) ( New - SG 84/2000) In case of amendment and supplement of the company
statute, the person/s representing the joint stock company shall certify a
copy of the company statute with all the amendments and supplements by the
respective date and shall present it at the commercial register.
Section III
Shares
Nominal Value of the Shares. Denominations
Article 175
(1) A share shall be a security which shall
attest to the fact that its owner participates in the capital stock with the
nominal value indicated on it.
(2) A joint stock company may not issue shares of a different nominal value.
(3) Shares may be issued in denominations of 1, 5, 10 and multiples of 10
shares.
Issue Price
Article 176
(1) The issue price is the price at which the
shares shall be purchased by the founders or, respectively, the subscribers in
case the capital is raised through subscription.
(2) The issue price shall not be lower than the nominal value. Shares may also
be subscribed at a price higher than the nominal value.
(3) The difference between the nominal value and the issue price shall be set
aside for the company's reserve fund.
Indivisibility
Article 177
Shares are indivisible. Where a share belongs
to several persons they shall exercise their rights in it jointly by
designating a proxy.
Types of Shares
Article 178
(1) Shares may be registered or bearer shares.
Preferred shares may also be issued.
(4) (New, SG 84-2000) The joint stock company may also issue non-cash shares.
The term for issuing and transacting with the non-cash shares shall be
determined by a Law.
(5) (Previous Par. 2, SG 84-2000) Bearer shares shall not be delivered until
payment of their nominal value or issue price.
(4) (Previous Par. 3, SG 84-2000) Where bearer shares are delivered before
payment of the full issue price the amount of the installments shall be
indicated on them.
Shareholders' Register
Article 179
The joint stock company shall keep a
shareholders' register in which the names and addresses of the owners of
registered shares shall be recorded and the type, nominal value and issue
price, quantity and serial numbers of the shares shall be indicated. The same
shall be applied for interim certificates.
Exchange of Shares
Article 180
(Amended, SG 84-2000) Bearer shares shall be
exchanged for registered shares and vice versa upon request of the shareholder
after payment in full of their price, in case the by-laws provide the terms
for it.
Shareholders' Rights
Article 181
(1) A share entitles its owner to one vote in
the general meeting of shareholders, to a dividend and to a share in the
assets in case of liquidation in proportion to the nominal value of the share.
(2) Where a company issues shares with special rights this must be indicated
and provided for in the by-laws.
(3) (Supplemented, SG 84-2000) The shares that provide equal rights form a
separate class.The restriction of rights of an individual shareholder from one
class shall not be permitted.
Preferred Shares
Article 182
(1) Preferred shares may provide a guaranteed
or additional dividend or share in the company's assets in case of
liquidation, as well as other rights provided for in this Law or the by-laws.
The by-laws may provide that preferred shares have no voting rights, which
must be indicated on the respective share.
(2) Preferred shares having no voting rights shall be included in the nominal
value of the capital stock.
(3) (New - SG No. 63/1995) It shall not be allowed more than 1/2 of the shares
to be non-voting shares.
(4) (Former Paragraph 3 SG 63/1995) Where a dividend due from a preferred
share without voting rights is not paid in the course of 1 year and the
delayed payment is not made during the following year together with the
dividend due for that following year, the preferred share shall acquire voting
rights pending payment of the delayed dividends. In this case the preferred
shares shall be taken into account in determining the quorum and majority.
(5) (Former Paragraph 4 SG 63/1995) In order to adopt a resolution with which
the advantages arising from the nonvoting preferred shares are to be
restricted, it shall be necessary to obtain the consent of the preferred
shareholders, which shall convene at a separate meeting. The meeting may
conduct business if not less than 50 per cent of the preferred shares are
represented. Resolutions shall be adopted with a vote of at least three
quarters of the shares so represented. The preferred shares shall acquire the
right to vote upon the removal of the advantages.
Contents of a Share
Article 183
(1) A share shall contain:
1. the designation `share' for a denomination of one or `shares' for larger
denominations, preceded by the respective number thereof;
2. type of the shares;
3. the number of the denomination and the serial numbers of the shares
comprised therein;
4. the trade name and seat of the joint-stock company;
5. the amount of the capital stock;
6. the total number of shares, their individual nominal value and their
denomination structure;
7. the coupons and their maturity;
8. the signatures of two persons having authority to bind the company, and the
date of issue.
(2) (New - SG No. 63/1995) A printed signature on the share shall also be
considered valid signature.
(3) (Former Paragraph 2 SG 63/1995) Filled in on the face of a registered
share shall be the name of its first owner.
Coupons
Article 184
(1) Unless otherwise provided in the by-laws,
shares shall be issued with dividend coupons for 20 years.
(2) Coupons may not be transferred separately from the shares.
(3) A coupon shall carry the designation `Coupon', the trade name of the joint
stock company, the number of the coupon, indication as to the share and its
denomination, and the year for which dividend is payable on presentation
thereof.
Transfer of Shares
Article 185
(1) Bearer shares shall be transferred by
delivery.
(2) Registered shares shall be transferred by endorsement which, to be binding
on the company, must be recorded in the registered shareholders register. The
by-laws may provide for other conditions for the transfer of registered
shares.
Liability of Transferor of
Registered Shares
Article 186
The transferor of registered shares which have
not been fully paid up or from which other obligations towards the company
arise shall be liable jointly and severally with the transferee. The
transferor's liability shall lapse upon the termination of a period of two
years from the date that the transfer was recorded in the shareholders
register.
Transfer of Interim
Certificates
Article 187
(1) An interim certificate may not be
transferred prior to the incorporation of a company.
(2) Transfers of interim certificates shall be subject to the provisions of
Article 185, paragraph 2.
Acquisition of Own Shares
Article 187a
(New - SG ¹ 63/1995, Amended - SG ¹ 70/ 1998 and SG ¹ 114/ 1999-Repealed;
New - SG ¹ 84/2000)
(1) A company may acquire its own shares only:
1. For reduction of capital under Article 201, item 2;
2. For universal legal succession except merger or incorporation;
3. If it is free of charge;
4. If it is engaged in, by occupation in transactions with securities and
acquires the shares in implementation of third party order;
5. In case of expulsion of shareholder on the terms of Art. 189, Par. 2 and 3;
6. In case of duress execution for obligations to the company;
7. In case of buy-back of shares.
(2) The shares shall be paid in full size in cases of item 2, 6, 7 and 8 of
the previous paragraph;
(3) The company shall terminate the exercising the rights of the shares to the
moment of their transfer;
(4) The total nominal value of the own shares on Par.1, except these on item 1
and 7, cannot exceed 10 % of the capital. The exceeding the said value shares
shall be transferred within three years.
(5) If the shares acquired in the case of Par. 1, items 2-8 are not
transferred in the term on Par 4, they shall be considered invalid and Art
200, item 2 shall apply.
(6) The own shares of the company shall not be taken into consideration in
determining the net value of the company assets under Art. 247, Par. 2.
Buy-back of shares
Article 187b
(New - SG ¹ 63/1995, Amended -SG ¹ 114/ 1999, Repealed; New - SG ¹ 84/2000)
(1) The company may buy-back own shares on the
grounds of a resolution of the general meeting that determines:
1. the maximum number of shares subject to buy-back;
2. the terms and conditions upon the board of directors or the managing board
shall carry the buy-back in period not longer than 18 months;
3. the minimal and maximal price of the buy-back.
(2) The decisions under Par. 1 shall be passed with a majority of the
represented capital, and if buy-back is not stipulated by the By-laws - by a
majority of 2/3 of the shares represented.
(3) The buy-back shall be carried respectively, in compliance with Art. 247a,
Par. 2.
Privilege for Buy-back
Shares
Article 187c
(New - SG ¹ 84/2000)
(1) The by-laws may provide for the issuing of
shares that shall be subject to buy-back under terms and conditions determined
in the by-laws.
(2) The company shall present to commercial register the proposal for the
buy-back and the announcement fir it shall be published in the State Gazette.
(3)The buy-back shall be carried out only by sums designated for distribution
under Art. 247a, Par. 1, 2 and 3.
(4) The company shall be obliged to form reserves in amount of the value of
all buy-back shares under Par. 1. The reserves might be distributed among the
shareholders only in case of decrease of the capital with the buy-back shares
and also for increase of capital.
Inadmissible Acquisition
of Own Shares
Article 187d
(New - SG ¹ 84/2000)
(1) If the company has acquired own shares in
violation of Art. 187a-187c, it shall be obliged to transfer the said shares
within one year from the acquisition. Otherwise the shares shall be
invalidated and Art. 200, item 2 shall apply.
Disclosure of information
Article 187e
(New - SG ¹ 84/2000)
The annual financial statement shall obligatory
inform:
1. the number and value of the acquired during the year own stocks;
2. the legal grounds for the acquisitions during the year and the price paid;
3. the number and nominal value of the own shares.
Equalized to Own Shares
Acquisition Cases
Article 187f
(New - SG ¹ 84/2000)
(1) The rules of Art. 187a -187e shall also
apply when:
1. shares of the company are acquired and owned by one person for the account
of the company;
2. shares of the company are acquired and owned by another company, where the
first company directly or indirectly possesses majority of the voting rights
or directly or indirectly can exercise control over he second company.
3. The company accepts own shares or shares under item 2 as a pawn.
(2) When the company has registered own shares at the time of its constitution
or capital increase, Art. 187a, Par. 3, Art. 187d and 187e shall apply.
(3) The company shall not grant loans to third party or secure the acquisition
of its own stocks by third party. The restriction shall not apply for
transactions where one of the party is a commercial bank or non-banking
financial institutions and the transaction is concluded at their usual
activity.
Section IV
Contributions
Obligation to Make a Contribution
Article 188
(1) The shareholders shall be obligated to make
contributions for the shares subscribed, which shall cover the fixed by the by-laws portion of the value of the
shares.
(2) Partial contributions may vary for individual shareholders, if the by-laws
provide so expressly.
Consequences of Delaying
Contributions
Article 189
(1) The shareholders which have not made their
contributions within the specified time periods shall owe interest, unless the
by-laws do not provide for liquidated damages. In case of a delayed
non-monetary contribution, compensation for actual damage suffered may be
claimed.
(2) Shareholders whose contributions are overdue, if they do not make the due
contributions within one month of written notice to do so, shall be deemed
expelled. The notice must be published in the State Gazette unless the
transfer of the shares is subject to the consent of the company.
(3) A shareholder so expelled shall lose its shares and any contributions
made. The shares of a shareholder so expelled shall be canceled and destroyed.
The company shall offer for sale new shares substituting the canceled ones.
The contributions made by the expelled shareholder shall be appropriated to
the company's reserve fund.
Interest
Article 190
(1) The shareholders shall not be paid interest
on contributions made, except in cases provided for in the by-laws.
(2) (Amended SG 84 2000) Where the shareholders have made partial
contributions in different proportions, interest shall be due on the
difference, unless the by-laws provide otherwise. Such interest shall be paid
from the profit before the payment of dividend according to Art. 247
regardless the general meeting resolution for the profit distribution.
(3) The fruits derived from contributions made prior to incorporation shall be
in the company's favor, unless the by-laws provide otherwise.
Security
Article 191
The by-laws may provide that the shareholders
shall provide security for the portion not contributed.
Section V
Increase of the Capital Stock
Prerequisites
Article 192
(1) The capital stock may be increased by
issuing new shares, by increasing the nominal value of shares already issued,
or by converting debentures into shares pursuant to Article 215.
(2) The general meeting of shareholders resolution to increase the capital
stock shall be adopted by a two thirds majority of the votes of the shares
represented at the meeting. The by-laws may provide for a larger majority, as
well as for additional conditions.
(3) Where shares of various classes exist, the resolution shall be adopted by
each class at a separate meeting.
(4) Where the new shares are to be sold at a price exceeding their nominal
value, the minimum sale price shall be specified in the general meeting
resolution.
(5) An increase of the capital stock is admissible only after the specified by
the by-laws amount has been fully paid up.
(6) (New - SG ¹ 84/2000) In the case of increase of capital in violation of
Art. 161, par. 4 the members of the managing board or board of directors,
shall be jointly liable for the contributions for the registered own shares.
(7) (New - SG ¹ 56/1995, prev. par. 6 - amended, SG ¹ 84/2000) In the case
of increase of capital Chapter Fourteen, Sub-section II shall apply
respectively and increase of the capital stock trough subscription shall be
carried out under the terms and conditions established by the Law.
(8) (New - SG ¹ 114/1999, prev. par. 7 - amended, SG ¹ 84/2000) For entering
in the register the increase of the capital stock through subscription, shall
be presented a prospectus except the cases when such is not required by the
Law.
Requirements for the entry
of the increase of the capital
Article 192a
(1) In order the capital increase to be entered
in the commercial register, it shall be necessary:
1. the new shares to be registered;
2. at least 25% of nominal value of the new shares to have been paid;
3. the difference between the nominal and the issued value of the new shares
to have been paid;
(2) If the new shares have not been registered in full, the capital shall be
increased only with the value of the registered shares in case the decision of
then general meeting for the increase permits such possibility.
(3) The list with the persons registered the new shares shall be presented to
the commercial register certified by the managing board, respectively the
board of directors.
Increase of the Capital
Stock by Non-Monetary Contributions
Article 193
Where the capital stock is increased by
non-monetary contributions, the general meeting resolution shall specify the
subject of each contribution, the contributor, and the nominal value of shares
given for such contribution.
Preferential Right of
Shareholders
Article 194
(1) (Amended SG 84-2000) Each shareholder is
entitled to acquire a part of the new shares in proportion to its share in the
capital stock prior to the increase.
(2) (Amended SG 84-2000) In case of shares of different class the right under
Par. 1 shall valid for the shareholders of the respective class. The rest of
the shareholders shall exercise their privilege after the shareholders of the
class from which are registered the new shares.
(3) (New SG 84-2000)The right under Par. 1 and 2 shall be lapsed within a term
determined by the general meeting, but not lee than a month after the
publishment in the State Gazette of the invitation for registration of the
shares. The invitation for registration of new shares shall be entered into
the commercial register after presenting the decision for the increase of the
capital
(4) (New SG 84-2000) The shareholders' right under the par. 1 and 2 may be
restricted or forfeited pursuant to a general meeting resolution passed with
three quarters of the votes of the shares represented. The managing board,
respectively the board of directors shall present a report concerning the
reasons for the restriction or forfeiting of the privilege and shall motivate
the issued value of the new shares. The decision of the general meeting shall
be presented at the commercial register and published.
Conditional Increase of
the Capital Stock
Article 195
The increase of the capital stock may be
conditional upon the buying of the shares by certain persons at a certain
price, or against debentures issued by the company.
Increase of the Capital
Stock by the Supervisory Board (Board of Directors)
Article 196(Amended SG 84-2000)
(1) (Previous Art. 196-Amended SG 84-2000)
The by-laws may empower the managing board, or the board of directors as the
case may be, to increase the capital stock up to a certain nominal amount in
the course of five years from the date of incorporation, by issuing new
shares. A resolution to the same effect may also be passed by amending the
by-laws in compliance with the requirements of Art. 192, Par. 3, for a period
not exceeding five years from the date of registration of the amendment.
(2) (New SG 84-2000) Art. 194, Par. 1 and 2 shall apply in case of capital
increase under the previous paragraph.
(3) (New SG 84-2000) The managing board, respectively the board of directors
may dismiss shareholder or restrict shareholder's right under Art. 194, Par.
1only if the by-laws or the general meeting resolution passed by majority of
2/3 of the shares represented, empowers the mentioned bodies for the said
action.
Increase of the Capital
Stock from Company Funds
Article 197
(1) The general meeting may resolve to increase
the capital stock by partial capitalisation of profits. The resolution shall
be adopted within three months from the date that the annual statement for the
previous year is approved, with a majority of the votes of three quarters of
the shares represented at the meeting.
(2) The company's balance sheet shall be presented and the fact that the
increase is from the company's own funds shall be explicitly stated upon
filing the resolution to increase the capital stock for registration with the
court.
(3) (Amended SG 84-2000) The new shares shall be allocated among shareholders,
including the company when it possesses own stocks, on a pro rata basis. Any
general meeting resolution in contravention of the latter provision shall be
null and void.
Receipt of Shares
Article 198
(1) Upon registering the increase of the
capital stock pursuant to the preceding article, the supervisory board, or the
board of directors as the case may be, shall, without delay, invite the
shareholders to receive their shares.
(2) New bearer shares which have not been claimed within one year of the date
that the resolution to increase the capital stock was published in the State
Gazette shall be sold on the stock exchange. The shareholders' rights shall
lapse, and moneys from the sale shall be appropriated to the company's reserve
fund.
Section VI
Reducing the Capital Stock
Ordinary Reduction
Article 199
(1) A reduction of the capital stock shall be
implemented by a general meeting resolution.
(2) (Amended SG 84-2000)If there are several classes of shares, resolution of
each class of shareholders shall be necessary to reduce the capital stock.
(3) The resolution shall set forth the purpose of the reduction and the method
by which it is to be effected.
Methods of Reduction
Article 200
(1) The capital stock may be reduced:
1. by reduction of the nominal value of shares;
2. by cancellation of shares.
Reduction of Capital Stock
by Cancellation of Shares
Article 201
(1) Shares may be canceled forcibly or after
their acquisition by the company.
(2) (Amended SG 84-2000) Forcible cancellation of shares shall be allowed if
the by-laws provides for such and the shares have been registered under this
condition.
(3) The prerequisites for, and the method of, forcible cancellation shall be
set forth in the by-laws.
Protection of Creditors
Article 202
(Amended SG 84-2000)
(1) The rules of Art. 150-3 shall apply for
creditors whose claims have arisen prior to publication of the resolution on
reduction.
(2)The rules of Par. 1 shall not apply when the reduction of the capital has
been made with the purpose of covering the losses. In this case the
shareholders shall not be released from the obligation to make installments.
(3) The rules of Par. 1 shall not apply also when the reduction is made with
own shares which have not been paid in full, and have been acquired
gratuitously or by or by means under Art. 247a, Par. 1-3. In these cases Art.
187c, Par. 4 shall apply respectively
Regime of Security or
Payment
Article 203
(1) (Amended, SG No. 83/1999; 84/2000) The
capital of the company may be simultaneously decreased and increased, so that
the decrease shall have effect only if the increase is carried out.
(2) In the cases under Par. 1 the capital might be decreased beneath the
minimum level required by the Law if with the increase of the capital the
minimum level is achieved.
(3) The rule of Art 202, Par. 1 shall not apply if, as a result of the capital
increase, the level of it before the change is not achieved or exceeded.
Section VII
Debentures
Procedure for Issuing Debentures
Article 204
(1) (Amended, SG ¹ 114/1999) Debentures /Bonds/ may be issued by a joint stock company at least two years after it has
entered in the commercial register and if two annual statements have been
approved by the general meeting.
(2) (Amended, SG ¹ 114/1999) The requirements under paragraph 1 shall not
apply to debentures issued or guaranteed by the State or banks.
(3) Resolutions to issue debentures may be adopted only by the general meeting
of shareholders.
(4) Debentures of same issue and same nominal value shall rank pari passu.
(5) (New - SG No. 63/1995) Debentures may be in the form of debenture stock
and debenture certificates. The rules for shares stipulated in this Law shall
apply to the issue, transfer and pledge of debenture stock and debenture
certificates.
Requirements and Procedure
for Offering
Article 205
(1) (Repealed - SG No. 63/1995)
(2) The commencement of the offering shall be advertised in the State Gazette.
(3) Debenture subscribers shall be provided with the general meeting
resolution on issuing the loan and the annual financial statements for the
preceding two years.
Closing of Offering
Article 206
(1) The raising of moneys and the delivery of
the debentures shall be performed by a bank or specialised firm.
(2) Subscribers shall pay the relevant moneys into a special account with a
bank specified by the company. The sums in the said account may not be used
prior to the announcement that the offering has closed.
(3) The offering shall close when the advertised amount of the debenture loan
has been subscribed or upon expiration of its term.
(4) The general meeting of shareholders shall determine the terms under which
the loan shall be deemed contracted, and where the value subscribed for is in
excess or in deficit of the amount initially announced, the general meeting of
shareholders shall cause the supervisory board, or the board of directors as
the case may be, to announce the closing of the offering.
(5) Should the offering be closed short of compliance with the terms provided
for the contracting of the loan, moneys paid up shall be reimbursed to the
subscribers together with such interest as accrued by the bank.
Issuing Preferred
Debentures
Article 207
A company may not issue new debentures on
preferential terms without the consent of the general meeting of
debenture-holders.
First General Meeting of
Debenture-Holders
Article 208
Within one month from the closing date of the
offering the organs of the joint stock company shall call a general meeting of
debenture-holders. The notice of the meeting shall be published. The meeting
may transact business if not less than one tenth of the subscribed loan is
represented.
Representation of
Debenture-Holders
Article 209
(1) The holders of debentures of the same issue
shall form a group for the protection of their interests before the company.
(2) The group shall be represented by trustees elected by the general meeting
of debenture-holders. These trustees may not be more than three.
Limitations on
Representation
Article 210
(1) The following may not be trustees as per
the preceding article:
1. the debtor company;
2. other companies which hold more than one tenth of the debtor company's
capital or in which the debtor company holds more than one tenth of the
capital;
3. companies which have guaranteed, in part or in total, the liabilities
assumed;
4. members of the supervisory board, the managing board or the board of
directors of the company, or descendants, ascendants and spouses thereof;
5. persons who are prohibited by law from serving on company governing bodies;
(2) Trustees may be recalled by a general meeting resolution of
debenture-holders.
Powers of the Trustee
Article 211
Trustees may perform acts to protect the
debenture-holders' interests pursuant to resolutions of the general meeting of
debenture-holders.
Participation of Trustees
in the General Meeting of Shareholders
Article 212
(1) The trustees of debenture-holders may
participate in the general meeting of shareholders without the right to vote.
They may obtain information under the same terms as shareholders.
(2) Where decisions are adopted concerning the performance of obligations
under the terms of the debenture loan, the general meeting of shareholders
shall hear the opinion of the debenture-holders' trustees.
Remuneration of Trustees
Article 213
(1) The remuneration of the debenture-holders'
trustees shall be fixed by the company and shall be paid on its account.
Should the company fail to fix such remuneration, the general meeting of
debenture-holders shall do so.
(2) Should the company object to the amount so fixed, the remuneration shall
be fixed by an order of the district court upon application by the trustees.
General Meeting of
Debenture-Holders
Article 214
(1) The general meeting of debenture-holders
shall be called by the trustees of the debenture-holders.
(2) The general meeting may also be called upon the request of the holders of
not less than 10 per cent of the debentures, or, if liquidation proceedings
have commenced, upon the request of the liquidators of the company.
(3) The trustees of the debenture-holders shall be bound in duty to call the
general meeting of debenture-holders upon receipt of notice from the governing
bodies of the joint stock company as to:
1. a proposed amendment of the company's purposes or type, or for
transformation of the company;
2. a new issue of preferred debentures.
(4) Each issue of debentures shall constitute a separate general meeting.
(5) The provisions for the general meeting of shareholders shall apply mutatis
mutandis to the general meeting of debenture-holders.
(6) The general meeting of shareholders shall be bound in duty to review a
general meeting of debenture-holders resolution.
Section VIII
Conversion of Debentures into Shares
Resolution on Conversion of Debentures into Shares
Article 215
(1) The general meeting may resolve on the
issuing of convertible debentures. This type of debentures may not be issued
by companies in which the State owns more than 50 per cent of the capital
stock. The shareholders may subscribe preferentially such debentures under the
terms which apply to a subscription for a new issue of shares.
(2) The procedure for the conversion of debentures into shares shall be
specified in the general meeting resolution on the issuing.
(3) The general meeting of shareholders may lay down the terms under which
holders of debentures which are not redeemable by conversion into shares may
so convert them.
(4) The issue price of the converted debentures may not be lower than the
nominal value of the shares which the debenture-holders would acquire by
conversion.
(5) In case of reduction of the capital stock because of losses through a
reduction of the number of shares or of the nominal value thereof, the rights
of debenture-holders shall be reduced proportionally.
Terms of Validity of
Resolution to Issue of New Debentures
Article 216
A resolution to issue new debentures
convertible into shares shall be valid subject to approval by the general
meeting of debenture-holders which have acquired the right to convert
debentures into shares.
Conversion upon Increase
of Capital Stock
Article 217
Upon adoption of a resolution to increase the
capital stock, the managing board, or the board of directors as the case may
be, shall determine the period within which debentures may be converted into
shares. This period may not exceed three months.
Registration of the
Altered Capital Stock
Article 218
The managing board, or the board of directors
as the case may be, shall register any changes in the capital stock occurring
as a result of conversion of debentures into shares.
Section IX
Joint Stock Company Organs
Types of Organs
Article 219
(1) (Previous Art. 219 - SG 84 - 2000)The joint
stock company organs shall be:
1. the general meeting of shareholders;
2. the board of directors (one-tier system), or the supervisory board and the
managing board (two-tier system).
(2) (New SG 84 - 2000) The sole owner of the capital of a sole owned joint
stock company shall be competent on the issues of competence of the general
meeting.
Subsection I
General Meeting of Shareholders
Composition of the General Meeting
Article 220
(1) The general meeting comprises the voting
shareholders. A voting shareholder may participate in a general meeting either
in person or by proxy.
(2) The members of the board of directors, or of the supervisory board and
managing board as the case may be, shall participate in general meeting
proceedings without the right to vote, unless such members are shareholders.
Competence
Article 221
The general meeting shall:
1. amend the by-laws;
2. resolve on increase or reduction of the capital stock;
3. resolve on transformation and dissolution of the company;
4. elect and recall the members of the board of directors, or of the
supervisory board as the case may be, and determine their remuneration;
5. appoint and dismiss CPA auditors;
6. approve the annual financial statement as certified by the appointed
auditor;
7. resolve on issuing of debentures;
8. appoint liquidators upon dissolution of the company, except in the event of
bankruptcy;
9. relieve of responsibility the members of the supervisory board and managing
board, or of the board of directors as the case may be;
10. resolve on other matters which by virtue of the law or the by-laws are in
its competence.
Holding of General Meeting
Article 222
(1) A general meeting of shareholders shall be
held at least once a year. The first general meeting may be held at any time
within 18 months of incorporation.
(2)(New SG 84 - 2000) In case the losses exceed the half of the size of the
capital, the general meeting shall be convened not later than 3 months of the
losses establishment.
(3) (Previous Par. 2 - SG 84 2000) The general meeting shall elect a chairman
and a secretary of the meeting, unless the by-laws provide otherwise.
Convening the General
Meeting
Article 223
(1) The general meeting shall be convened by
the board of directors, or by the managing board as the case may be. A general
meeting may also be convened by the supervisory board, as well as on the
request of the owners of not less than one tenth of the stock.
(2) (Amended, SG No 33/1999) Should the request of the owners of not less than
one tenth of the capital not be granted within one month after the date of the
request or the General Meeting is not called within three months after the
date of request, the district court may convene the General Meeting or empower
the shareholders which have so requested it, or a representative thereof, to
convene the Meeting.
(3) (Amended, SG No. 100/1997, 84/2000) The general meeting shall be convened
by notice in the State Gazette. If the company has not issued bearer stocks,
the by-laws may provide for convening the meeting only with written notice.
(4) As a minimum the notice shall state:
1. the trade name and seat of the company;
2. the place, date and hour of the meeting;
3. the type of general meeting;
4. the formalities, if provided for in the by-laws, to be satisfied for
attendance and exercise of the right to vote;
5. the agenda and business to be transacted, and the draft resolutions.
(5) (Amended, SG No. 100/1997) The time period from the publication to the
opening of the meeting shall not be less than 30 days.
Right to Information
Article 224
All papers relative to the agenda of a general
meeting must be placed at the disposal of the shareholders not later than the
date of publication or mailing of the notice thereof. Such papers shall be
available free of charge to any shareholder on demand.
List of Participants
Article 225
A list shall be drawn up of the shareholders or
proxies present at the meeting, and the respective number of shares owned or
represented. The shareholders or proxies shall certify their presence at the
meeting by signature. The list shall be authenticated by the chairman and the
secretary of the meeting.
Proxy
Article 226
A shareholder shall have the right to attend a
general meeting by proxy executed in writing.
Quorum of Shareholders
Article 227
The by-laws may provide for a quorum of the
shareholders. In the absence of such quorum a new meeting date shall be set
which shall not be later than one month, and the general meeting at such
latter date shall be valid regardless of the shares represented. The date of
such second meeting may be stated in the original notice.
Voting
Article 228
(1) Voting rights shall originate upon payment
of the contribution, unless otherwise provided in the by-laws.
(2) Where a proposed resolution affects the rights of a class of shareholders,
each class shall vote separately.
Conflict of Interest
Article 229
A shareholder may not, either in person or by
proxy, vote on:
1. actions brought by the company against it;
2. proceedings to realise the liability of such shareholder to the company.
Majority
Article 230
(1) General meeting resolutions shall be passed
by majority vote of the shares represented, unless the law or the by-laws
provide otherwise.
(2) Resolutions under 221, items 1_ 3, shall require a majority of at least
two thirds of the shares represented. The by-laws may provide for another
majority for these cases.
Minority
Article 230a
(New SG 84-2000)The shareholders representing
5% of the capital shall be entitled to:
1. to claim against the members of the supervisory and the managing board for
the cause of damages to the company before the district court.
2. To require from the general meeting or district court the appointment of a
controller who shall be authorized to inspect the annual audit report and to
work out a report on his findings.
Resolutions
Article 231
(1) The general meeting may not pass resolutions on matters of which there has
been no notification or advertisement pursuant to Article 223, unless all
shareholders are present or are represented at the meeting and no one objects
to the submission of such matters to debate.
(2) General meeting resolutions shall take effect immediately, unless such
effect is deferred.
(3) (Amended, SG No. 100/1997, 84/2000) Resolutions to amend the by-laws,
increase or reduce the capital stock, transform or dissolve the company,
appoint or recall members of the boards, as well as to appoint liquidators,
shall be registered in the commercial register and shall take effect after
registration in the commercial register.
Minutes
Article 232
(1) The minutes of a general meeting shall be
kept in a special book and shall comprise:
1. the place, date and hour of the meeting;
2. the names of the chairman and the secretary, and of the vote tellers;
3. the attendance of the managing and the supervisory board, and of other
persons which are not shareholders;
4. the motions made on the substance of the debate;
5. the votes taken and the results thereof;
6. the objections made.
(2) The minutes of the meeting shall be signed by the chairman and the
secretary, and by the vote tellers.
(3) Attached to the minutes shall be:
1. the list of participants;
2. the documents relative to the convening of the meeting.
(4) The minutes and the documents attached thereto shall be kept on file for
not less than five years. Any shareholder shall have the right to inspect the
file on demand.
Resolutions of the Sole
Owner
Article 232a
(New SG 84 - 2000) A written protocol for the
resolutions of the sole owner of the company shall be required.
Subsection II
General Provisions for the Two Systems of Administration
Terms of Office
Article 233
(1) The members of the board of directors, the
supervisory board and managing board shall be elected for not more than a
five-year term of office, unless a shorter term is provided for in the
by-laws.
(2) The members of the first board of directors, or of the first supervisory
board as the case may be, shall be elected for not more than a three-year term
of office.
(3) Directors may be reelected for any number of terms.
(4) The members might be dismissed of the duties even before the end of the
mandate for which thew have been elected.
Directors
Article 234
(1) A director may be any natural person
possessing capacity. Where the by-laws so provide, a director may be a legal
person. In this case the legal person shall designate a representative for
performance of its duties on the board. The legal person shall bear unlimited
liability and shall be liable jointly and severally with the other directors
for the liabilities arising from acts of its representative.
(2) A person may not be a director, if it:
1. has been a member of an executive or comptrolling body during the preceding
2 years from the date of the decision to dissolve the company on grounds of
bankruptcy and there remain unsatisfied creditors;
2.(Repealed SG - 84-2000)
3. does not meet other requirements provided for in the by-laws.
Representative Powers
Article 235
(1) The members of the board of directors, or
of the managing board as the case may be, shall represent the company
collectively, unless otherwise provided by the by-laws.
(2) The board of directors, or, as the case may be, the managing board subject
to approval by the supervisory board, may delegate authority to one or several
of its members to represent the company. The authority so delegated may at any
time be revoked.
(3) The names of the authorized representatives shall be registered in the
commercial register and published in the State Gazette. For registration they
shall present notarized signatures.
(4) Restrictions on the representative power of the board of directors or the
managing board or the persons authorized by then on the rules of Par. 2 shall
not have effect to third parties.
(5) The authorization and the revocation thereof shall be binding upon third
parties after registration and publication.
Contracts of the sole
owner
Article 235
(New SG 84 - 2000) The contracts between the
sole owner of the company and the company itself when it is represented by
him, shall be concluded in writing.
Special Requirements for
Validity of Some Resolutions
Article 236
(1) The managing board may pass resolutions
with the prior approval of the supervisory board or with a unanimous
resolution of the board of directors, on:
1. closing down or transfer of enterprises or of substantial parts thereof;
2. substantially altering the company's business;
3. substantial organisational changes;
4. long-term cooperation which is material to the company or the termination
of such cooperation;
5. establishment of a branch.
(2) Objections that such acts have been performed in contravention of the
preceding paragraph shall not be binding upon bona fide third parties.
Rights and Obligations
Article 237
(1) The directors shall have equal rights and
obligations, regardless of:
1. any internal division of functions among the directors;
2. (Supplemented, SG 84 - 2000) the provisions which confer managerial and
representative authority to officers.
(2) The directors must perform their functions in the interest of the company
and not disclose the company's secrets even after they are no longer
directors.
(3) (New, SG 84 - 2000) The chairman of the supervisory board, respectively of
the board of directors shall conclude the management contracts and the
representative contract with the executive members.
Quorum and Majority
Article 238
(1) The boards may pass resolutions if at least
half the directors are present, whether in person or represented by another
director. No director present may represent more than one absent director.
(2) Resolutions shall be passed by a simple majority, unless otherwise
provided by the by-laws.
(3) The by-laws may provide that the board may pass resolutions in absentia if
all directors have stated in writing their approval for the resolution.
Minutes
Article 239
Minutes shall be kept of all resolutions of the
managing board, the supervisory board and the board of directors which shall
be signed by all present members of the respective board.
Liability
Article 240
(1) The directors shall deposit a guarantee for
their management of the affairs of the company in an amount determined by the
general meeting, but not less than their three month gross income. The
guarantee may be in the form of shares or debentures deposited with the
company.
(2) The directors shall be liable jointly and severally before the company for
any damages caused through a fault of theirs.
(3) Any director may be held harmless if it is established that it has no
fault for the damage suffered by the company
Subsection III
Two Tier System
Managing Board
Article 241
(1) The joint stock company shall be managed by
a managing board which shall act under the control of a supervisory board.
(2) The members of the managing board shall be appointed by the supervisory
board, which shall determine their remuneration and shall have the right to
recall them at any moment.
(3) No person may simultaneously serve on both the managing board and the
supervisory board of one company.
(4) The number of members of the managing board shall be determined by the
by-laws, but may not exceed nine.
(5) The rules of procedure of the managing board shall be approved by the
supervisory board.
Supervisory Board
Article 242
(1) The supervisory board may not take part in
the management of the company. The supervisory board shall represent the
company only in its relationship with the managing board.
(2) (Amended SG 84 - 2000) The members of the supervisory board shall be
appointed by the general meeting. Their number may be from three to seven
persons.
(3) The supervisory board shall adopt its own rules of procedure and shall
appoint a chairman and vice chairman from among its members.
(4) The chairman shall call meetings of the supervisory board on his own
initiative, as well as upon request by the members of the supervisory board or
the members of the managing board.
Reporting and Supervision
Article 243
(1) The managing board shall report on its
activity to the supervisory board at least once every three months.
(2) The managing board shall immediately inform the chairman of the
supervisory board of all circumstances which have arisen which are material to
the company.
(3) The supervisory board may at any time require that the managing board
provide information or a report on any matter concerning the company.
(4) The supervisory board may carry out any necessary investigations in
performance of its duties. For purposes of such investigation it may employ
the services of experts.
Subsection IV
One Tier System
Board of Directors
Article 244
(1) (Amended SG 84 - 2000) The company shall be
managed and represented by a board of directors. The board of directors shall
consist of minimum three and maximum nine persons.
(2) The board of directors shall adopt its own rules of procedure and shall
elect a chairman and vice chairman from among its members.
(3) The board of directors shall meet regularly not less than once every three
months to discuss the company's state of affairs and prospects for
development.
(4) The management of the company shall be delegated by the board of directors
to one or several directors, who shall be termed officers. The officers shall
be a minority of the directors and may at any time be replaced.
(5) Each of the officers must immediately inform the chairman of the board of
all circumstances which have arisen which are material to the company.
(6) Each director may request that the chairman call a meeting to discuss
particular matters.
Section X
Annual Closing of Accounts and Distribution of Profits
Documents
Article 245
Each year not later than the last day of
February the board of directors, or the managing board as the case may be,
shall draw up the annual report and the financial statement for the previous
calendar year, and shall submit these to the certified public accountants
appointed by the general meeting.
Reserve Fund
Article 246
(1) The company shall set up a reserve fund.
(2) The sources of financing the reserve fund shall be:
1. At least one tenth of profit which shall be set aside until the fund's
assets reach one tenth or more of the company's capital stock or such other
larger proportion as the by-laws may provide;
2. the proceeds obtained in excess of the nominal value of shares and
debentures upon their issuing;
3. the total of the additional payments made by the shareholders for
preferences given them with shares;
4. other sources provided for by the by-laws or by a general meeting
resolution.
(3) Disbursements from the reserve fund may be made only for:
1. covering losses for the current year;
2. covering losses for the previous year.
(4) When the assets of the reserve fund exceed one tenth of the company's
capital stock, or any other larger proportion thereof as may be provided for
in the by-laws, the excess amount may be used for increase of the capital
stock.
Contents of Annual Report
Article 247
The annual report shall comprise a review of
the company's operations over the year and its current state of affairs, and
the accounting notes to the annual financial statement.
Dividend and Interest
Payments
Article 247a
(New SG 84 - 2000) (1) The dividends and
interests under Art. 190, Par. 2 shall paid only if according the inspected
and approved on the rules of Section XI audit report for the respective year,
the net value of the assets reduced with the sum of the dividends and
interests to be paid is not less than the sum of the capital of the company,
Fund Reserve and other funds the company is obliged to establish by the Law or
by-laws.
(2)Under the meaning of the previous paragraph, the net value of the assets
shall be the difference between the rights and obligation of the company
according to its balance sheet.
(3) The payments under Par. 1 shall be made to size of the profit of the
company for the respective year, the non-distributed profit of the previous
years, the part of the Reserve Fund and other funds of the company exceeding
the minimum determined by the Law or the by-laws, and reduced with the
uncovered losses of the preceding years and the sum of the deductions for the
Reserve Fund and other funds which the company is obliged to establish by the
Law or by-laws.
(4) If payment in lack of the prerequisites of Par. 1-3 have been made, the
shareholders shall be obliged to return the received sums only if the company
proves that they have knew or might have known for the lack of the said
prerequisites.
Section XI
Annual Audit
Object and Scope of Audit
Article 248
(1) The annual financial statement shall be
audited by the certified public accountants appointed by the general meeting.
(2) The audit shall have as its object to ascertain whether the provisions of
the Law on Accountancy and the by-laws on annual closing have been observed.
Appointment and
Responsibility of Certified Public Accountants
Article 249
(1) Where the general meeting has failed by the
end of the calendar year to appoint Certified Public Accountants, the Court
shall, upon request of the board of directors, or of the managing or the
supervisory board as the case may be, or of an individual shareholder appoint
Certified Public Accountants.
(2) The Certified Public Accountants shall assume responsibility for the bona
fide and unbiased performance of audit, and nondisclosure of secrets.
Report of Certified Public
Accountants
Article 250
Upon receipt of the report of the Certified
Public Accountants, the managing board shall submit it to the supervisory
board, together with the annual financial statement and annual report. The
managing board shall also submit the draft resolution on distribution of
profit to be discussed by the general meeting.
Approval of Annual Closing
of Accounts
Article 251
(1) The supervisory board shall verify the
annual financial statement, the annual report and the draft on distribution of
profit, and shall, upon approval thereof, resolve to call a regular general
meeting of shareholders.
(2) In the one-tier system the draft on distribution of profit shall be
prepared by the board of directors, which shall then convene the general
meeting.
(3) The annual financial statement may not be approved by the general meeting
without an audit by Certified Public Accountants.
(4) (Amended SG 84 - 2000)The approved by the general meeting annual financial
statement shall be presented to the commercial register and an announcement of
this shall published in the State Gazette.
Section XII
Dissolution
Grounds for Dissolution
Article 252
A joint stock company shall be dissolved:
1. by resolution of the general meeting of shareholders;
2. upon the expiration of the time period for which it was formed. The general
meeting may pass a resolution to dissolve the company prior to the expiration
of the said period;
3. upon a declaration of bankruptcy;
4. by a ruling of the court with which the company is registered upon an
action brought by the public attorney where the company pursues objectives
prohibited by law;
5. when the capital drops below the minimum required by law for one year. If
within this period the general meeting fails to pass a resolution to dissolve
the compa ny, the dissolution shall be effected pursuant to item 4;
6. upon the occurring of the grounds provided for in the by-laws.
CHAPTER FIFTEEN
PARTNERSHIP LIMITED BY SHARES
Partnership Limited by Shares Defined
Article 253
(1) A partnership limited by shares shall be
formed by articles of incorporation, whereby limited partners are issued with
shares against their contributions to the capital. The limited partners shall
be not less than three.
(2) The provisions for the joint stock company shall apply mutatis mutandis to
the partnership limited by shares, unless this chapter provides otherwise.
(3) The trade name of a partnership limited by shares shall include the
extension, `Komanditno druzhestvo s aktsii' [Partnership limited by shares],
or the abbreviation `KDA'.
Founders
Article 254
(1) The partnership limited by shares shall be
formed by the general partners. They shall have the right to select
shareholders among subscribers.
(2) The general partners shall draw up the by-laws and shall convene the
constituent meeting.
Contributions
Article 255
(1) The amount of the partners' contributions
shall be specified by the by-laws.
(2) (Repealed SG 103/1993)
Partnership Organs
Article 256
The organs of the partnership limited by shares
shall be those set forth by this Law for a one-tier system joint stock
company.
General Meeting
Article 257
(1) Only limited partners shall have the right
to vote in the general meeting. General partners, even when they own shares,
shall take part in the meeting in a consultative capacity.
(2) The powers of the general meeting shall be set forth in the by-laws.
(3) The general meeting shall submit to consideration and resolve on the
requests of limited partners for auditing the activities of the partnership.
Board of Directors
Article 258
The board of directors shall consist of the
general partners.
Adoption and Amendment of
the By-Laws
Article 259
(1) The by-laws shall be adopted and amended,
and the partnership shall be dissolved, subject to the consent of the general
partners.
(2) The partnership shall not be dissolved with the death or bankruptcy of a
limited partner, unless the by-laws provide otherwise.
Liquidation Proceeds
Article 260
The liquidation proceeds of each partner shall
be proportionate to its contributions in the partnership.
CHAPTER SIXTEEN
TRANSFORMATION OF COMPANIES
Section I
General Provisions
Admitting Transformation
Article 261
(1) Any company may be transformed into another
type of company, may merge into another company, split into several companies,
split off from itself another company or participate in the formation of a new
company through consolidation.
(2) The companies shall be liable jointly and severally for obligations
arising from the split or splitting off.
(3) (Repealed SG 84 -2000)
Procedure for
Transformation
Article 262
(1) A company shall be transformed subject to
consent by the partners, or a general meeting resolution as the case may be.
The consent, or resolution, shall be registered in the commercial register of
the seats of the respective companies. The application for registration shall
be filed within two months of the resolution.
(2) Upon transformation, the deeds required for the company which is newly
formed and the company which is being dissolved shall be filed with the
application for registration.
Issue of Permit
Article 262a
(New - SG No. 52/1998)
Permit for merger or consolidation of companies
is issued under conditions and procedure prescribed by a separate law. The
court files merger or consolidation in the commercial register after permit is
presented in case issue of a permit is compulsory.
Creditors' Security
Article 263
(1) The resolution on consolidation or merger
shall be published. Within six months from the date of publication the
creditors of the companies concerned may claim payment or security in
accordance with their rights. The assets of the dissolved company which have
been transferred to the new company, or to the company into which the former
company has merged as the case may be, shall be managed separately until the
expiration of the six month time period.
(2) The general partners in dissolved companies shall remain liable to
creditors for obligations assumed prior to the transformation.
(3) The managers of the new company shall be liable to creditors for the
separate management of the assets pursuant to paragraph 1.
Section II
Special Provisions
Procedure for Transformation of a Joint Stock Company
Article 264
A resolution to transform a joint stock company
into another type of company shall be valid if not less than two years have
elapsed from its formation and the financial statements for the two years have
been approved. The said resolution shall be passed with a two thirds majority
of the shares represented. In determining the majority, the company's shares
and the nonvoting shares shall be deducted from the capital stock. The by-laws
may provide for a greater majority, as well as for other requirements.
Transformation of a Joint
Stock Company into a Limited Liability Company
Article 265
Where a joint stock company is transformed into
a limited liability company, each shareholder shall exchange its stock for an
equivalent share in the registered capital.
CHAPTER SEVENTEEN
LIQUIDATION
Commencement of Liquidation
Article 266*
(1) Liquidation shall be carried out after the
dissolution of a company.
(2) (New, SG No. 83/1996) The term for completion of the liquidation shall be
determined by the General Meeting of the limited liability company and the
joint-stock company, and for other companies, by unanimous decision of the
partners with unlimited liability. Such a term shall also be determined by the
court in its decision for appointing liquidators. Where necessary, the term
determined as above may be extended.
(3) (Former Paragraph 2 SG 83/1996, Amended SG 84 - 2000) The liquidators
shall be registered in the commercial register where shall be presented their
notary certified specimen signatures.
(4) (Former Paragraph 3, Amended SG No. 83/1996) The Court of registration
may, where important reasons exist, appoint or dismiss liquidators on
application by the partners, or, respectively, by the shareholders which own
at least one twentieth of the stock.
(5) (New, SG No. 83/1996) The remuneration of the liquidators shall be fixed
by:
1. the General Meeting of the limited liability company or the joint-stock
company;
2. the partners with unlimited liability in a company, unanimously;
3. the court, where the liquidators have been appointed by it.
(6) (New, SG No. 83/1996) The liquidators shall be liable for their activities
related to the liquidation in the same way as the managers and the other
executive bodies of companies.
Notice to Creditors
Article 267
Upon declaring the dissolution of the company
the liquidators must invite its creditors to make their claims. The notice
shall be in writing and delivered to known creditors, and shall also be
published.
Duties of Liquidators
Article 268
(1) A liquidator shall be obliged to consummate
pending transactions, to collect payments due, to convert the company's assets
into cash and satisfy its creditors. A liquidator may not enter into new
transactions unless so warranted for the purposes of liquidation.
(2) A liquidator may, subject to the consent of the partners or, respectively,
the shareholders, and the consent of the creditors, transfer to them
particular items of the assets under liquidation, provided that this does not
prejudice the rights of the remaining partners and creditors.
(3) The liquidators must inform the tax administration of the liquidation
which has commenced.
Representation
Article 269
(1) The liquidators shall represent the company
and shall have the rights and obligations of its executive organ.
(2) The liquidators may represent a company only jointly. A single liquidator
may accept legal statements addressed to the company.
Opening Balance Sheet and
Report
Article 270
(1) The liquidators shall draw up a balance
sheet as of the moment of dissolution of the company, and explanatory notes
thereto. At the end of each year the liquidators shall close accounts and
present a financial statement and annual report to the governing body.
(2) The governing body shall resolve on approval of the opening balance sheet,
the annual closing of accounts, and on holding the liquidators harmless.
Merger of a company in
liquidation
Article 270a
(New, SG No. 83/1996)
(1) A company in liquidation may merge into
another company:
1. by decision of the General Meeting of the limited liability company or the
joint-stock company;
2. by unanimous decision of the partners with unlimited liability in other
companies.
(2) The provisions of Article 263 shall be observed in case of a merger.
(3) After entering the merger in the commercial register the liquidation shall
be terminated. The application for entering shall be filed by the company into
which the other company is merging. The managing body of the same company
shall make decision on the report of liquidators and their liability.
Distribution of Assets
Article 271
Upon satisfaction of the creditors, the
remaining assets shall be distributed among the partners, or among the
shareholders as the case may be.
Protection of Creditors
Article 272
(1) (Amended, SG No. 83/1996) The company's
assets shall not be distributed before six months have passed from the date
that the notice to the creditors was published.
(2) Should a creditor duly notified not assert its claim, the sum owed to it
shall be deposited in a bank account in its name.
(3) Where a liability is disputed, assets shall not be distributed until the
creditor concerned has been secured.
(4) (New, SG No. 83/1996) The managing body of the company may, upon
satisfaction of the creditors, write off any bad amounts receivable of the
company. Such decision shall be taken by simple majority.
The Break and Termination
of the Liquidation Proceedings in Opening the Bankruptcy Proceedings
Article 272a
(New SG 84 2000) (1) The liquidation proceeding
of the company shall be stopped since the date of the decision for opening the
bankruptcy proceedings. The liquidation proceedings shall be terminated since
the decision under Art 630 enters into force.
The court shall declare the bankruptcy of the company - debtor under Art. 630,
Par. 2 with the decision for opening the bankruptcy proceedings.
(2) In the cases under Par. 1 the court on bankruptcy shall be oblige to send
a written notice to the court on liquidation in the same day.
Report and Balance Sheet
of the Liquidator in Case of Termination of His Activity
Article 272b
(New SG 84 2000) (1) In case bankruptcy
proceedings has been opened for a company in liquidation, the Liquidator shall
be obliged to present at the court on bankruptcy the balance sheet with final
date the decision for opening the bankruptcy proceedings and a report on his
activity under Art. 270 within 7 days since the termination of the bankruptcy
proceedings.
(2) The appointed assignee in bankruptcy the debtor or creditor might object
on the balance and report under Par. 1 within 7 days after they are presented
at the court.
(3) The court shall state on the objection with a "definition" which
is final.
(4)If in the term of Par 2 an objection is not presented at the court, the
balance sheet and the report shall be considered approved.
(5) While the liquidation proceedings is stopped, the Liquidator shall not
have the right t carry out the duties provided in Chapter 17
Closing of Liquidation
Proceedings
Article 273
(1) (Supplemented SG 84 - 2000) When all
liabilities have been settled and the remaining assets distributed, the
liquidator shall apply for deletion of the company from the Commercial
Register. The decision on deletion shall be published in the State Gazette if
the founding of the company has been subject to a publishment.
(2) Should at some later time the need arise for further liquidation
proceedings, the court shall, on application by the person concerned, appoint
liquidators, either the previous or new ones.
Continuation of a Company
after Dissolution
Article 274
(1) When a company is dissolved due to
expiration of the specified time period or upon a resolution of the competent
company organs, they may decide to continue its activities, unless the
distribution of assets has commenced.
(2) A resolution pursuant to paragraph 1 shall be passed:
1. in case of a joint stock company, by a majority of at least three quarters
of the shares represented;
2. in case of another company, unanimously.
(3) The liquidators shall file the resolution to continue the company for
registration in the Commercial Register.
CHAPTER EIGHTEEN
COMMERCIAL GROUPS
Section I
Consortium
Definition
Article 275
A consortium is a contractual grouping of
merchants for carrying out specified activities.
Applicable Provisions
Article 276
The respective rules either for partnerships
under civil law or for the company in the form of which a consortium has been
organized shall apply to consortia.
Section II
Holding Company
Definition
Article 277
(1) A holding company shall be a joint stock
company, a partnership limited by shares or a limited liability company the
purpose of which is to participate under any form in other companies or in
their management, regardless of whether it carries on manufacturing or
commercial activities of its own.
(2) At least 25 percent of the capital stock of a holding company must be
invested directly in subsidiary companies.
(3) A subsidiary company is a company in which a holding company owns or
controls, directly or indirectly, at least 25 per cent of the stocks or shares
and is in a position to appoint, directly or indirectly, a majority of the
directors.
Purposes
Article 278
(1) The purposes for which a holding company is
set up may be:
1. acquisition, management, valuation and sale of interest in Bulgarian or
foreign companies;
2. acquisition, management and sale of debentures;
3. acquisition, valuation and sale of patents, assigning licences for the use
of patents of companies in which the holding company owns an interest;
4. financing of companies in which the holding company owns an interest.
(2) A holding company may not:
1. participate in a partnership which is not a legal person;
2. acquire licences which are not intended for use by the companies controlled
by it;
3. acquire real property which is not required by its needs. The acquisition
of stock in real estate companies is permitted.
Taxation of Holding
Activities
Article 279
(Repealed, SG No. 59/1996)
Credits Given by Holding Companies
Article 280
(1) A holding company may extend loans only to
companies in which it participates directly or which it controls.
(2) The amount of the extended loans may not exceed ten times the capital
stock of the holding company.
(3) The amount of the deposits of subsidiary companies and enterprises in a
holding company may not exceed three times the amount of the capital stock.
CHAPTER NINETEEN
APPLICABLE LAW
Law Applicable to Sole Proprietors
Article 281
The legal status of a sole proprietor shall be
governed by the law of the country in which he is registered.
Law Applicable to
Companies
Article 282
(1) The incorporation, transformation and
dissolution of companies, the manner of their representation, as well as the
rights and obligations of the partners shall be governed by the law of the
country in which the respective company is registered.
(2) If a company is registered in more than one country, the law of the
country in which, according to the by-laws, the company's place of management
is situated shall apply.
(3) For branches of companies, the law of registration of the branch shall
apply.
Law Applicable to Agency
Article 283
The agency contract shall be governed by the
law of the country in which the agent carries on its activities, regardless of
the place where the contract was made.
CHAPTER TWENTY
ADMINISTRATIVE PENAL PROVISIONS
Violations and Fines
Article 284
(1) ( Amended SG 103 - 1993/ SG 84 - 2000 ) A
fine of at least BGN 100, but not exceeding BGN 500, shall be imposed on any
person under an obligation pursuant to this Law which does not apply for
registration within the prescribed time periods or does not present documents
or signatures provided for in this Law.
(2) If, after a fine has been imposed, the person under an obligation does not
apply for registration or does not present the documents or signatures within
the time period determined by the court, further fines pursuant to paragraph 1
shall be imposed upon such person until the acts are performed.
(3) Fines pursuant to the previous paragraphs shall also be imposed upon
officials who, when they are obliged to do so:
1. have not informed officially the respective district court of the
occurrence of a circumstance which is subject to registration;
2. do not undertake the necessary action for registration.
(4)(New SG 84 - 2000) Liable person under this Law who does not indicate in
his commercial correspondence the data under Art. 13, shall be fined with 100
to 500 BGN.
(5) (Previous Par. 4, SG 84 - 2000) Fines shall be imposed by the district
court. The court's resolution may be appealed with a particular appeal.
Article 285
(1) For non-performance of the obligation under
Article 7, paragraph 3 a fine or, respectively, a financial sanction, equal to
BGN 50 shall be imposed on the merchant.
(2) The statements for establishing the violations shall be drawn up by the
mayors of communities, and the penal orders shall be issued by the mayors of
municipalities or persons designated by them.
(3) The establishment of the violations, the issuing, appeal and enforcement
of the penal orders shall be done pursuant to the Law on Administrative
Violations and Penalties.
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