Amendments to the Commercial Act Effective since 1 January 2017

Some changes in the Commercial Act have come into force since the beginning of 2017 concerning each Limited Liability Company registered in Bulgaria. Most of these changes are related to making the following decisions at the General Meeting of the companies incorporated as a Limited Liability Company and a Single-Member Limited Liability Company.

  1. Admission and dismissal of shareholders;
  2. Consent to the transfer of a company share to a new member;
  3. Deciding on decrease and increase in the capital;
  4. Election of a manager;
  5. Deciding on acquisition and alienation of real properties and real rights thereto.

The law amendments require Minutes to be issued for passing of all these resolutions, which will be certified by a notary public. Till now the Act has not imposed any such requirement for notary certification.

This amendment aims at protecting the companies and their members against any possible abusive practice since the cases of company thefts happen very often, which lead to change in the company owners, most often one or more shareholders appear dismissed without their knowledge, and the company is ‘conquered’ by an ill-intentioned shareholder or manager, who then make transactions for administration and disposal of the company’s assets – real property transfer, bank account deletion and disposal of other properties of the company prior to the owners have become aware of that or have managed to take efficient actions or combat.

On the other hand, the Law amendments so adopted make the decision-making more complicated for the shareholders burdening further the procedures with notary fees, especially when it concerns purchase/sale/disposal of real properties.

That is why the Commercial Act stipulates that each company not wishing to benefit from the protection provided for in the law amendments, to amend their articles of association, to ignore the amendments so adopted and to keep making decisions in the manner well-known so far. In case that you are not sure what to do – if all resolutions should be notarized or only some of them, or if your company needs the protection provided by law, please feel free to contact us for help and assistance.

 

Prepared by:

Dimitar Yanev