Types of traders and companies

According to the Bulgarian Commercial Law, the Commercial Act specify the following types of traders:
- ST or sole trader - every individual able-body who is resident of the country without the need for capital;
- Trade companies:
1. GP (general partnership);
2. LP (limited partnership);
3. LTD (a limited liability company);
4. JSC (joint stock company);
5. LP with shares (limited partnership with shares).

Personal companies - items 1 and 2 - which are characterized by that that their partners are jointly liable and unrestricted, there is no requirement for capital, no authorities.

1. General partnership - it includes physical and legal persons. The members bear unlimited and joint liability for the debts of the company. The company’s capital is based on equity contributions of the members, but it’s possible also through equity contributions in cash and kind of contributions (buildings, shops, products, etc..) Imported and saved in capital and are proprietary. The capital of the GP can be increased through: attracting new members, capitalization of part of the profit (after tax), accumulation of reserves and their transformation into fixed capital. The capital of the GP can be reduced to: leaving of a partner, losses.

2. Limited partnership
is formed by a contract between two or more persons to carry out business under a common company and one or more partners are jointly and unlimitedly liable for the debts of the company, and the rest are responsible to the extent of the agreed fee. The management and representation of the company are carried out by fully liable members. The capital of the LP is based on the contributions of unrestricted fees and limited liability partners. The magnitude of the contributions of the limited liability partners is recorded in the articles of association and the unlimited liable partners participate at least with 1/ 10 of the capital of the LP. Thus, the main capital of the LP has two parts:
- capital of the limited liabile partners;
- capital of the unlimited liable partners.
Equity companies – items 3 - 5 - these companies are characterized by a requirement for minimum capital, statutory authorities and the partners or the shareholders respond to the amount of the agreed fee.

3. Limited Liability Company - LTD – it can be formed by one or more physical or legal persons responsible for the debts of the company with its contribution to the capital. Each member is entitled to a part of the profit proportionate to his personal part in the capital. The capital of the LTD is formed at its creation (minimum 2 BGN).
3.1. Limited liability company of one person - SLTD - a form of a physical or legal person, i.e. this person is the sole owner of the capital. The competency of the general meeting of the partners is decided by the sole owner of the capital. The characteristic of the LTD and SLTD is that the capital may be at least BGN 2 and consists of stakes. The transfer of the stakes can be done with notarized signatures of the contract and is entered in Commercial Register. The managing bodies are: the general meeting of the members and manager/ s.

4. Joint stock company - JSC
- could be created in two ways: by subscription any person may subscribe shares against payment (cash or non cash) and without subscription two or more persons entered the capital of the joint stock company. The capital of the JSC is divided into shares. The company replies to the creditors with its property. The minimum required capital is BGN 50 000.
4.1. Single joint stock company - SJSC - formed by one person, i.e. thephysical or legal person is the sole shareholder. The competency of the General meeting of the shareholder is decided by the sole shareholder.
The joint stock companies have the following authorities: general meeting of the shareholders and board of directors (one-tier system) or the supervisory board and managing committee (two-tier system).
The shares can be registered and bearer. May be issued and preference shares. The registered shares are available and dematerialized. The bearer shares are transferred and are pledged with their delivering. The transfer of the registered shares shall be made by endorsement and must be entered in the book of the registered shareholders in order to be effective as against the company. The dematerialized shares can be transferred as their entering in the register of the Central Depository.

5. Limited partnership with shares – LP
with shares – is formed by contract and for the contributions from the limited liability shareholders are issued shares. The number of the limited responsible members may not be less than 3, i.e. there are both limited and unlimited liabile partners. The management bodies of the limited partnership with shares are defined in this Act for management of joint stock company in tier system, i.e. Board of Directors - consisting of the unlimited liable members. The General Meeting entitled aloud to have only limited liability shareholders. The unlimited liabile members even when they hold shares, participate in an advisory capacity only. The minimum required capital is BGN 50 000.

Public companies

The joint stock companies with registered dematerialized shares can become public under the Public Offering of Securities Act and after filing and approval of the Prospectus for admission to trading of shares and be listed in the public register of the Financial Supervision Commission. The shares of the public companies are traded at the Bulgarian Stock Exchange-Sofia AD.