Selling on - Bulgaria

Updated 09/2011

Legal requirements

The Commercial Code (TZ) allows various forms of transfer of ownership a company: reforming (through merger, acquisition or divestment) or changing legal status.

Commercial Code (TZ)

The Competition Protection Act (ZZK) deals with the control of concentrations of enterprises.

Competition Protection Act (ZZK)

Types of transfer

In case of an takeover, all the assets of one or more companies pass to an existing company, which then becomes their successor.

In case of a merger, all the assets of two or more companies pass to a newly-established company, which then becomes their successor.

In divestment, all the assets of a particular company are transferred to two or more other companies.

In all these cases, the previous company ceases its activities without liquidation.

Where a company divests itself of part of its assets, a new company is formed. The previous company then continues operating with the assets it has retained.

Sole traders can also be transformed by transferring all their assets to another sole trader.

Sole traders may be transferred in their entirety with all attached rights, obligations and existing relations to a legal person through a notarised agreement which has to be entered in the Commercial register.

Bulgarian Commercial Register

Ownership of the shares in public limited companies is acquired under the rules on trading shares on the stock market.

Organisation of trading on the Bulgarian Stock Exchange

The most common and quickest way of transferring the ownership of the capital of a limited liability company is to sell shares in it. The new owner may be a private individual or a legal entity. The sale is carried out by means of a notarised agreement and must be entered in the Commercial Register.

Taking over an existing company is a worthwhile alternative to setting up a new business.

Takeovers — Bulgaria

Administrative procedures

Company transfer procedures

When an agreement to transfer a business is made, the procedure allows the business with all its rights and obligations to be transferred by a written agreement, the signatures being witnessed by a notary. The transfer of a company is entered in the Commercial Register by the transferor and the transferee simultaneously.

Applications to the Commercial Register

When ownership is transferred by means of an agreement, the agreement is also entered by the Registry Agency.

The Registry Agency's Register of Ownership

Companies engaged in supplementary pensions insurance are subject to special regulations on transformation. They need prior permission for their transformation from the Financial Supervisory Commission.

Where the acquisition constitutes a concentration of economic activity, the Commission on Protection of Competition (CPC) must assess the concentration first.

Enterprises must inform the Commission of a concentration after concluding an agreement, publishing an invitation to tender or acquiring control, but before real action is taken to implement the transaction.

Until the CPC issues its decision, all legal and factual actions related to the potential concentration are prohibited. If this is infringed, the participants in the concentration are subject to a fine equal to 10 of their total turnover for the previous financial year.

Notifications of concentrations must be submitted jointly by the enterprises being merged or absorbed, jointly established or acquiring joint control, and by the person acquiring sole control.

Competition Protection Act (ZZK)
Pro-forma notification of a concentration and instructions for completion [160 KB]

Concentration assessment procedures are put in place within three days of receipt of the notification by the CPC, or when all the necessary information has been submitted.

A notification is submitted via the Commission's electronic register, allowing any interested parties to submit information or their opinions on the effect the concentration will have on the market in question.