It was long ago since my posts were updated and for that reason I decide to make a new announcement today.
I have build and set up a web site on the Internet for Intellectual property services. Currently the web site is only in Bulgarian language with the purpose that allows each and every visitor to order online his request for Intellectual Property services (i.e. Trademark search; Trademark registration; Trademark watch; Trademark renewals; Trademark consultations; Industrial design search; Industrial design registration; Industrial design consultations; Copyrights protection and consultations).
If you need a service that is related with your Intellectual Property rights or if you wish to register, renew or just to receive a proper professional consultation you may visit my site at www.ipreg.eu
Once the site is available in any other language I shall inform you accordingly.
Monday 1 December 2014
Monday 24 January 2011
Company Registration In Bulgaria - General Overview
Bulgaria is the leader in the field of individual income and corporate income taxation and has the lowest tax rate of 10% in the European Union.
Foreign citizens and companies can set-up and start a business under the same conditions as those applied to Bulgarian natives. The companies established by foreigners according to the Bulgarian legislation are treated as Bulgarian local juridical persons that may have international business.
The most popular juridical form for registering legal entities in Bulgaria by foreign citizens is the Limited Liability Company. A limited liability company, called in Bulgaria 'OOD', is formed by two or more individuals or companies. A Limited Liability Company which has only one shareholder is known in Bulgaria as 'EOOD'.
The main advantage is that the shareholders' liability for the company’s obligations is restricted only to the value of their share in the company’s registered capital. OOD/EOOD exists as a separate legal entity and provides its shareholders for a limited liability.
Bulgarian legislation offers fairly good conditions for company registration. The minimum amount of the registered capital of OOD/EOOD in Bulgaria is just 2 leva (BGN), or about 1 euro.
In Bulgaria a financial system called 'currency board' is applied and the exchange rate of the Bulgarian lev to the Euro is fixed by the Bulgarian National Bank:
1 EUR = 1.95583 BGN (lev). Immediately after its registration, the capital of the company can be drawn from the temporary bank account in which it has been deposited.
In Bulgaria company registration is done at the Trade Register and can be made in any of its branches regardless of the district in which the company headquarters is based.
The main steps for setting up a new company are:
• Choosing one or more objects or types of business activities for the company.
• Choosing the appropriate juridical form. Perhaps you'd prefer to register a EOOD or OOD. It may have only one partner or be a partnership of several persons/companies.
• Reserving a company name. You may select company's name. Availability can be verified on-line in the Trade Register's website, but it's recommended to be officially reserved as well.
• Company headquarters. Every company must have its main office. "Legaquest" Ltd. offers you the head-office needed for the registration.
• Capital. The necessary capital is to be deposited in a commercial bank. The minimum capital required for a limited liability company is only 2 leva (about 1 euro). Owner's capital has to be deposited into a bank account that has been specially opened for this purpose. Every partner must deposit in person his own share of the capital in the bank.
• Notary public. The manager's signature must be legalised by the notary and therefore the manager must be presented in person.
Trade Register.
In the Trade Register must be presented:
◦ Application for reserving the name of the company
◦ Minutes from the shareholders' founding meeting
◦ The contract of incorporation
◦ A declaration made by the manager
◦ A specimen from the manager's signature
◦ The management contract
◦ Documents proving the required capital is deposited in the bank
◦ Receipts for paid state taxes
◦ Application for the company registration.
Immediately after the completion of the registration the manager of the company may draw out the capital from the bank and use it for the business of the company.
Once the company is registered at the Trade Register, it can apply for a registration under the VAT law. This procedure takes up to 14 days after the necessary documents are submitted to the National Revenue Agency, the fiscal authority in Bulgaria.
Scope of Income Tax For Bulgarian Companies
A legal entity registered in Bulgaria is subject to tax on income derived in Bulgaria and also on other income received worldwide. Corporate income tax in Bulgaria is charged at a flat rate of 10%. Companies in certain sectors, such as insurance and gambling, are subject to special corporate income tax rates.
The tax year is normally the calendar year for the purposes of reporting and payment. Companies must file their reports by March 31 in relation to the previous year and also pay any tax due by that date. Where a company has made a profit in the year just reported, it must pay monthly advance tax payments in the following year. New businesses must pay quarterly in advance; the quarterly amount is agreed with the tax authorities.
Certain income of non-Bulgarian residents is subject to 10% withholding tax, including income from interest, royalties, certain fees, property, and transfer of property (capital gains). Dividends are subject to 5% withholding tax, although exceptions apply where the dividends are by way of extra shares.
Capital gains realised on the sale of property or certain vehicles used for business purposes are subject to corporate income tax. The tax is levied on the difference between the selling price and either the purchase price or the market value of the item.
Tax is charged on immovable property at the rate of 0.15% of the value of the property. Tax is also payable on rental income from properties, although the first 20% is tax free. Where the owner of the rental property is not a Bulgarian resident, then a 15% withholding tax is imposed.
Any Bulgarian company must register for value added tax (VAT) if turnover exceeds BGN50,000. The standard rate of VAT is 20%. There is also a reduced rate of 7% for certain taxable supplies in the tourism sector.
VAT returns must be filed monthly, and at the end of the tax year. Returns must be submitted within 14 days of the end of the tax period, at which time payment is also due. Certain exemptions apply, including goods in customs warehouses or free zones, financial and insurance services, and the lease of buildings.
Foreign citizens and companies can set-up and start a business under the same conditions as those applied to Bulgarian natives. The companies established by foreigners according to the Bulgarian legislation are treated as Bulgarian local juridical persons that may have international business.
The most popular juridical form for registering legal entities in Bulgaria by foreign citizens is the Limited Liability Company. A limited liability company, called in Bulgaria 'OOD', is formed by two or more individuals or companies. A Limited Liability Company which has only one shareholder is known in Bulgaria as 'EOOD'.
The main advantage is that the shareholders' liability for the company’s obligations is restricted only to the value of their share in the company’s registered capital. OOD/EOOD exists as a separate legal entity and provides its shareholders for a limited liability.
Bulgarian legislation offers fairly good conditions for company registration. The minimum amount of the registered capital of OOD/EOOD in Bulgaria is just 2 leva (BGN), or about 1 euro.
In Bulgaria a financial system called 'currency board' is applied and the exchange rate of the Bulgarian lev to the Euro is fixed by the Bulgarian National Bank:
1 EUR = 1.95583 BGN (lev). Immediately after its registration, the capital of the company can be drawn from the temporary bank account in which it has been deposited.
In Bulgaria company registration is done at the Trade Register and can be made in any of its branches regardless of the district in which the company headquarters is based.
The main steps for setting up a new company are:
• Choosing one or more objects or types of business activities for the company.
• Choosing the appropriate juridical form. Perhaps you'd prefer to register a EOOD or OOD. It may have only one partner or be a partnership of several persons/companies.
• Reserving a company name. You may select company's name. Availability can be verified on-line in the Trade Register's website, but it's recommended to be officially reserved as well.
• Company headquarters. Every company must have its main office. "Legaquest" Ltd. offers you the head-office needed for the registration.
• Capital. The necessary capital is to be deposited in a commercial bank. The minimum capital required for a limited liability company is only 2 leva (about 1 euro). Owner's capital has to be deposited into a bank account that has been specially opened for this purpose. Every partner must deposit in person his own share of the capital in the bank.
• Notary public. The manager's signature must be legalised by the notary and therefore the manager must be presented in person.
Trade Register.
In the Trade Register must be presented:
◦ Application for reserving the name of the company
◦ Minutes from the shareholders' founding meeting
◦ The contract of incorporation
◦ A declaration made by the manager
◦ A specimen from the manager's signature
◦ The management contract
◦ Documents proving the required capital is deposited in the bank
◦ Receipts for paid state taxes
◦ Application for the company registration.
Immediately after the completion of the registration the manager of the company may draw out the capital from the bank and use it for the business of the company.
Once the company is registered at the Trade Register, it can apply for a registration under the VAT law. This procedure takes up to 14 days after the necessary documents are submitted to the National Revenue Agency, the fiscal authority in Bulgaria.
Scope of Income Tax For Bulgarian Companies
A legal entity registered in Bulgaria is subject to tax on income derived in Bulgaria and also on other income received worldwide. Corporate income tax in Bulgaria is charged at a flat rate of 10%. Companies in certain sectors, such as insurance and gambling, are subject to special corporate income tax rates.
The tax year is normally the calendar year for the purposes of reporting and payment. Companies must file their reports by March 31 in relation to the previous year and also pay any tax due by that date. Where a company has made a profit in the year just reported, it must pay monthly advance tax payments in the following year. New businesses must pay quarterly in advance; the quarterly amount is agreed with the tax authorities.
Certain income of non-Bulgarian residents is subject to 10% withholding tax, including income from interest, royalties, certain fees, property, and transfer of property (capital gains). Dividends are subject to 5% withholding tax, although exceptions apply where the dividends are by way of extra shares.
Capital gains realised on the sale of property or certain vehicles used for business purposes are subject to corporate income tax. The tax is levied on the difference between the selling price and either the purchase price or the market value of the item.
Tax is charged on immovable property at the rate of 0.15% of the value of the property. Tax is also payable on rental income from properties, although the first 20% is tax free. Where the owner of the rental property is not a Bulgarian resident, then a 15% withholding tax is imposed.
Any Bulgarian company must register for value added tax (VAT) if turnover exceeds BGN50,000. The standard rate of VAT is 20%. There is also a reduced rate of 7% for certain taxable supplies in the tourism sector.
VAT returns must be filed monthly, and at the end of the tax year. Returns must be submitted within 14 days of the end of the tax period, at which time payment is also due. Certain exemptions apply, including goods in customs warehouses or free zones, financial and insurance services, and the lease of buildings.
Monday 15 February 2010
The concessions according to the Bulgarian legislation
The Constitution provides for the award of concessions for items of property which constitute exclusive state property or over which the State exercises sovereign rights, as well as for activities in which the State has established a monopoly, according to a procedure and under terms established in a special law: the Concessions Act.
The Concessions Act differentiates between three types of concession according to their subject:
1. public works concession;
2. service concession;
3. mining concession.
A public works concession has as its subject the implementation of a construction work (object of the concession) and its post-commissioning management and maintenance, with the compensation consisting of the concessionaire's right to operate the object of the concession or in this right and a payment of compensation by the concession grantor.
A service concession has as its subject the management and maintenance of the object of the concession, with the compensation consisting in the concessionaire's right to operate the object of the concession or in this right and a payment of compensation by the concession grantor. A service concession may furthermore include execution of partial construction and erection work in the cases where there is a need for completion of construction in progress or partial extension/partial rehabilitation of the object.
A mining concession has as its subject the exploitation of natural resources through extraction, which is carried out with financial resources provided by the concessionaire and at its own risk. The Subsurface Resources Act and the Water Act apply in this case as special laws.
Concession objects:
A concession may be awarded for the following objects of public interest:
* Objects declared to constitute exclusive state property;
* Objects that are real estates or parts of real estates constituting public state property or public municipal property, by which economic activity is carried out;
* Objects that are real estates or parts of real estates constituting private state property or private municipal property, by which economic activity is carried out;
* Real estates or parts of real estates constituting property of a body governed by public law, by which economic activity is carried out.
The object of a concession may include the adjoining infrastructure and accessories, whether existing or which are to be built by the concessionaire.
A grantor of the concessions awarded according to the procedure established by the Concession Act is:
* The Council of Ministers: in respect of objects constituting state property;
* The Municipal Council: in respect of objects constituting municipal property;
* A body governed by public law, represented by the authority specified in its instrument of incorporation: in respect of the objects constituting its property. The term "body governed by public law" is defined in Item 11 of § 1 of the Supplementary Provisions of the Concessions Act.
Entities entitled to participate in the concession award procedures are:
Any natural person or legal entity or a combination of such persons may participate in a concession award procedure. Where the participant selected as a concessionaire is a legal entity or a consortium, which is not a merchant, the concession is awarded to a newly incorporated commercial corporation in which the legal entity is a sole owner of the capital or, respectively, the participants in the consortium own the entire capital in the proportion specified in their consortium agreement. In such a case, the concession agreement is concluded with the newly established commercial corporation as the concessionaire, which is bound by the offer of the legal entity or of the consortium, as the case may be. In the cases where the participant selected as a concessionaire is a natural person, the concession is awarded to a newly incorporated commercial corporation in which this person is a sole owner of the capital, or to a sole trader registered by this person.
Stages of a concession award procedure:
1. Adoption of a decision to initiate the procedure;
2. Conduct of an open procedure, a restricted procedure or a competitive interview procedure for the award of a concession;
3. Selection of a concessionaire;
4. Conclusion of a concession agreement.
Types of procedure:
* Open procedure: any person may submit an offer;
* Restricted procedure: includes admission of qualified bidders who meet the requirements. An offer may be submitted only by a bidder who has received an invitation after qualifying.
An electronic auction may be conducted in an open or a restricted procedure, where the technical specifications of the concession are established in detail and the decision to initiate the procedure provides that after initial evaluation of the offers, a concessionaire will be selected by means of an electronic auction.
* Competitive interview: includes admission of qualified bidders who meet the requirements and conducting of interviews with the bidders who have been invited to continue their participation in the procedure after qualifying. An offer may be submitted by a bidder who has been invited after the conducting of interviews with the selected bidders. A competitive interview procedure is conducted only for a public works concession in particularly complicated cases!
* The preparatory activities and the submission of a motion for the award of a concession for an object constituting state property (State concession) are performed by the government minister empowered by a special law. In case there is no empowerment by law, the minister in charge is the one:
- who heads the ministry to which the relevant object has been allocated for management;
- whose second-level spending unit is the institution to which the relevant object has been allocated for management;
- who exercises the right of the State as owner of a public-enterprise merchant to which the object has been allocated for management;
- of Regional Development and Public Works: in the rest of the cases.
Where the object of the concession constitutes municipal property (municipal concession), the motion to the Municipal Council for the award of a concession is prepared by the mayor of the relevant municipality, and in the cases where the object constitutes property of a body governed by public law (public concession) - by the person who manages this body.
Within seven days following the entry into force of the decision to initiate a concession award procedure, an order is issued on approval of: a notice of conduct of the procedure, bidding documentation for an open and restricted procedure or, respectively, a descriptive document for a competitive interview procedure, and a draft concession agreement. The notice is sent in an electronic form for publication on the Internet site of the State Gazette (http://dv.parliament.bg) and for entry in the National Concessions Register (www.nkr.government.bg). The notice is published within five days after its dispatch and is entered in the National Concessions Register within three days after its publication. After that, an announcement of the concession award procedure is published in the mass communication media and/or on the Internet, stating as a minimum the object of the concession and the date and State Gazette issue in which the notice was published.
In the cases of a public works concession of a value of EUR 5,278,000 before VAT, or where the investments envisaged for public works are less than EUR 5,278,000 before VAT, but this threshold can presumably be exceeded on completion of the procedure, the notice is sent electronically to the service publishing the Official Journal of the European Union at the same time as it is sent to the State Gazette.
The concession award procedure is conducted by a commission that is appointed by the Prime Minister (applicable to State concessions), the municipality mayor (applicable to municipal concessions) and the authority managing the body governed by public law (applicable to public concessions). The commission consists of a chairperson, a deputy chairperson and not fewer than three members.
Concession period
A concession is awarded for a period of up to 35 years, without an option for extension.
Appeals
Any decision, action or omission by an authority, by the commission or by an official in the commission award procedure can be appealed by the interested parties regarding its legal conformity before the Commission on Protection of Competition. An appeal does not suspend the concession award procedure, unless an interim measure is imposed. The appeals procedure is established in Chapter Eleven of the Concessions Act.
Tuesday 8 December 2009
Registration of JSC according to the Bulgarian legislation
I. Basic legal sources
Commercial Act (CA)
Law on Commercial Registry (ZTR)
Ordinance № 1 on February 14, 2007 for the keeping, storage and access to the commercial register.
Fare state taxes collected by the Registry Agency (tariff)
II. General
Legal definition of a joint stock company (JSC) is contained in Art. 158, para. 1 CA - stock is a company whose capital is divided into shares. The company is responsible to its creditors with its property. Shareholders are responsible for the obligations assumed by the JSC to the amount of contributions made without meeting with his personal property. The sum of the shares in its capital form AD. In the company of a joint stock company shall include the words "limited company" or the abbreviation "AD". JSC may be formed by one or more natural or legal persons. The minimum capital value of AD is BGN 50 000. The minimum amount of capital required for banking or insurance activities or voluntary health insurance or other special activity is determined by a separate law. Statute of AD must include details in accordance with Art. 165 CA.
III. Competent authority for registration of AD in the commercial register
Commercial Register kept by the Registry Agency under the Minister of Justice. Application for registration of AD may be filed in each of the territorial units of the Registry Agency (Agency), located on the premises of district courts. ZTR no requirement under the registration of AD is in the relevant territorial unit of the agency within the county court where the seat and the dealer.
IV. Proceedings recording of AD in the commercial register
1. Applicant
Entry of JSC is said by members of the Board of Directors (in one-tier management system JSC) or board (in two-tier management system JSC) or authorized by statute or appointed member of the management of AD and the lawyer with explicit written authorization.
2. Application. Form of application
Application for registration of AD is a model that can be submitted both on paper and in electronic form, subject to the terms and conditions under the Law on Electronic Document and Electronic Signature. The application and attachments must be submitted in Bulgarian. Documents may be submitted in any official language of the European Union, presented together with a certified translation in Bulgarian.
3. Order and time limit for ruling on the application. Appeals
Applications for registration of the circumstances in the commercial register (including registration of AD) are considered by official registration to the Agency in accordance with their submission. Registration Officer shall rule on the application for registration of AD at the latest by the end of the first working day following its adoption (in 3-year period of pre-registration deadline for delivery is 14 days). The refusal to register AD to appeal to the appropriate district court by domicile of the seller within 7 days of its notification.
4. Circumstances subject to registration
Circumstances subject to entry on AD is stated in the application form in the fields together in groups as follows:
A. Group Key circumstances "with the following fields:
- № 2 field "Company", stating the name under which the company performs trading activities;
- Field № 4 "Romanization," indicating the manner in which the company (including legal form of the name) is written in a Latin transliteration;
- Field № 5 "Seat and registered office, stating the country / city, postal code districts, municipalities, the region, residential complexes, street, building number, the number of inputs, number of storeys and number of apartments or office, which houses the management of the activities of limited company, if so desired may be given telephone, fax, email and website;
- Field № 6 "main activity", stating the objects of the joint stock company;
- № 6 a box 'Main activity, which sets out the main business of the dealer, classified in the National Classification of economic activities, determined in accordance with § 1, item 3 of the register BULSTAT; filling of this field is not necessarily ;
- Field № 10 "representative", stating the name or the name and PIN / PNF / UIC / code VAT number of the persons representing the company and where it is represented by a legal person - name and PIN / PNF persons representing the legal person - a representative;
- Field № 11 "Method of representation, noting the manner of representation (" Together "," separate "or" otherwise ", in this case indicates in what otherwise is implemented);
- Field № 12 "Board of Directors, which sets out its mandate, and the name and PIN / PNF, respectively, the company / name and identification number / code BULSTAT, members of the Board of Directors;
- Field № 13 "Board, which sets out its mandate, and the name and PIN / PNF, respectively, the company / name and identification number / code BULSTAT, members of the Governing Board;
- Field № 14 "The Supervisory Board, which sets out its mandate, and the name and PIN / PNF, respectively, the company / name and identification number / code BULSTAT, members of the supervisory board;
- Field № 16 Duration of the company, stating the date of expiry, which is incorporated company;
- Field № 17 "Special Conditions" stating the conditions on the formation, existence and termination of the company (eg a holding company, publicly traded company, purpose);
- Field № 23 "The sole owner of capital, which in single-stock company with the name and PIN / PNF, respectively, the company / name and identification number / code BULSTAT the sole owner of capital (in establishment of single-stock company);
- № 24 a box "Hidden contribution in kind, noting the fact that a decision of the general meeting of shareholders of art. 73b of the Commercial Law;
Group B. "Capital" with the following fields:
- Field № 31 "Size", stating the amount of capital;
- № Field 31a "Shares", stating the type, number and nominal amount of shares, the rights of the individual classes of shares and special conditions for their transfer;
- Field № 32 "Paid in capital, stating the amount of paid-up capital;
- № 33 field "contribution in kind, stating the nature and value of such contributions, if any.
5. Necessary application documents for registration of AD
The application shall be:
A. In Group Key circumstances:
- Statute, the instrument of incorporation, respectively (in the formation of a single AD);
- Minutes of the Constituent Assembly pursuant to Art. 163, para. 4 of the Commercial Law;
- A document setting out the establishment of a legal entity - a shareholder, and the competence of the authority of that person to decide to participate in the formation of a joint stock company (for legal entity - founder, which is not constituted under Bulgarian law, or legal entity - founder which is not entered in the commercial register);
- The decision by the authority of the entity - a shareholder to participate in joint-stock company;
- Minutes of meeting of the supervisory board for the selection of members of the board (in two-tier system of governance);
- If the statutes allow a member of the board may be a legal person - the decision of the competent authority of the entity to determine the representative member for the performance of his duties in the council and the documents establishing the formation of the entity and the jurisdiction of the Authority that person to take the decision if the person is not constituted under Bulgarian law, or is not entered in the commercial register;
- Minutes of the Board of Directors, ACCORDINGLY Governing Council for the selection of persons to represent the company;
- The founders - legal entities - the decision of a competent authority to be involved in the formation of a joint stock company;
- The list of persons enrolled shares upon incorporation, certified by the Board or the Board of Directors;
- Declaration of art. 160, para. 2 of the Commercial Law of the founders;
- Notarized consent and declaration under Art. 234, para. 3 of the Commercial Code of the members of the management of the company;
- Notarized consent and a specimen of signature of the person authorized to represent the company and declarations of compliance with the requirements of Art. 22 of the procedures for exercising the rights of the state in companies with state capital participation of individuals in cases of single-stock company with state participation in capital;
- The license or permit for banking, insurance, activities of a regulated market in financial instruments, investment firm, investment company, management company and other activities for which a separate law provides;
- Document (diploma, certificate of Bank etc..) Qualifications or qualifications for a member of the governing body as required by law;
- Other documents required by law;
B. Group Capital:
- In cash - a document submitted to the bank capital;
- In non-cash contribution - the conclusion of experts in art. 72, para. 2 Commerce Act unless otherwise provided by law; declaration under Art. 264 of the Tax Procedure Code (in contribution of the real right over immovable property or motor vehicle); evidence that he has notified the debtor of the assignment, except when the claim is against the company itself (with contribution of the mode) evidence that the importer is the holder of rights - the subject of supply, and written consent of the importer with the description of the contribution and notarization of signature.
V. Fees
In connection with the registration procedure of SA is a charge for entry into the commercial register of joint stock company. For registration of a single company a fee of 460 leva for registration of joint stock company for banking and insurance - 1700 levs, and at the request of the company to keep collecting fee of 50 leva
VI. Samples
Application for registration of joint stock company on the circumstances (A5)
Statutes of limited liability company
Minutes of the constituent meeting of a joint stock company
Minutes of the meeting of the Board of Directors / Supervisory Board of the joint stock company
Statement under Art. 160, para. 2 Commerce Act
Statement under Art. 234, para. 3 of the Commercial Law
Specimen signature of a member of the Board of Directors / Board of joint stock company.
* Have in mind that the documents preparation and the procedure should be performed by a lawyer.
Registration of a Limited liability company acording to the Bulgarian legislation
I. Legal sources
Commercial Act (CA)
Law on Commercial Registry (ZTR)
Ordinance № 1 on February 14, 2007 for the keeping, storage and access to the commercial register.
Fare state taxes collected by the Registry Agency (tariff)
II. General
Limited liability company (Ltd.) is a company formed by two or more persons responsible for the debts of the company shares with its contribution to the capital. The capital of the Ltd. shall consist of contributions of members. Limited liability company is established on the basis of the association, which is concluded in writing. Name of the company must contain the words "Limited Liability Company" or abbreviated as "Ltd." and should be a national exclusivity. The capital of a limited liability company may not be less than BGN 2.
III. Competent authority for entering into the commercial register Ltd.
Commercial Register kept by the Registry Agency under the Minister of Justice. Application for registration of LTD may be filed in each of the territorial units of the Registry Agency (Agency), located on the premises of district courts. According to the Law on the Commercial Register (ZTR) no requirement of registration Ltd. is in the relevant territorial unit of the Agency to the relevant district court, where the seat and the dealer. Practical application that allows for recording Ltd. with its registered head office in Varna will be made in a territorial unit of the Agency to the District Court - Plovdiv or Sofia, etc.
IV. Listing the company in front of the commercial register
1. Applicant
Ltd. of entry based on the claim form. Ltd. entry of states by the Governor / managers of the company and a lawyer with the express written authorization.
2. Application. Form of application
The application for registration Ltd. is a model and can be lodged either on paper or in electronic form, subject to the terms and conditions under the Law on Electronic Document and Electronic Signature. The application and attachments must be submitted in Bulgarian. Documents may be submitted in any official language of the European Union, presented together with a certified translation in Bulgarian.
3. Order and time limit for ruling on the application. Appeals
Applications for registration of the Ltd.'s are considered by official registration to the Agency in order of their receipt. Registration Officer shall rule on the application no later than the end of the first working day following its adoption (in 3-year period of pre-registration deadline for delivery is 14 days). The refusal to register Ltd. appealed to the appropriate district court of a company within 7 days of its notification.
4. Circumstances subject to registration
Circumstances subject to registration in the commercial register Ltd. are listed on the application in the appropriate fields, united in groups, which are as follows:
A. Group Key circumstances "with the following fields:
- № 2 field "Company", stating the name under which the company performs trading activities;
- Field № 4 "Romanization," indicating the manner in which the company (including legal form of the name) is written in a Latin transliteration;
- Field № 5 "Seat and registered office, stating the country / city, postal code districts, municipalities, the region, residential complexes, street, building number, the number of inputs, number of storeys and number of apartments or office, which houses the management of the company with limited liability, but may wish to specify the phone, fax, email and website;
- Field № 6 "main activity", which indicates that the objects of a limited liability company;
- № 6 a box 'Main activity, which sets out the main business of the dealer, classified in the National Classification of economic activities, determined in accordance with § 1, item 3 of the register BULSTAT; filling of this field is not necessarily ;
- Field № 7 "Management", stating the name and PIN / PNF manager / managers;
- Field № 11 "Method of representation, noting the manner of representation (" Together "," separate "or" otherwise ", in this case indicates in what otherwise is implemented);
- Field № 16 Duration of the company, stating the date of expiry, which is incorporated company;
- Field № 17 "Special Conditions" stating the conditions on the formation, existence and termination of the company (eg a holding company, purpose);
- Field № 19 "partners", giving the name and PIN / PNF, respectively, the company / name and identification number / code BULSTAT of members and the amount of equity participation (this internal field is not mandatory);
Group B. "Capital" with the following fields:
- Field № 31 "Size", stating the amount of capital;
- Field № 32 "Paid in capital, stating the amount of paid-up capital;
- № 33 field "contribution in kind, stating the nature and value of such contributions, if any.
5. Necessary application documents for recording Ltd.
The application shall be:
A. In Group Key circumstances:
- Association;
- A document setting out the establishment of a legal person - member, and the competence of the authority of that person to decide to participate in a limited liability company (for legal entity - member, which is not constituted under Bulgarian law or a legal person - member which is not entered in the commercial register);
- The decision of the authority of a legal person - member to participate in a limited liability company;
- The decision of the General Assembly, respectively the sole owner of the appointment of a manager or managers;
- A notarized consent from the specimen signature of the manager / managers;
- The license or permit when carrying out certain activities legal act provides authorization requirement of public authority;
- Other documents required by law;
B. Group Capital:
- In cash - a document submitted to the bank capital;
- In non-cash contribution - the conclusion of experts in art. 72, para. 2 of the Commercial Code, unless otherwise provided by law; declaration under Art. 264 of the Tax Procedure Code (in contribution of the real right over immovable property or motor vehicle); evidence that he has notified the debtor of the assignment, except where the claim is against the company itself (with contribution of the mode), evidence that the importer is the holder of rights - the subject of Apportionment;
- Other documents required by law.
V. Fees
In connection with the registration procedure of the LTD pay the state fee for registration in the Commercial Register in the amount of BGN 160, but the application for retention of the firm collected a fee of 50 leva.
VI. Samples
Application for registration of circumstances concerning a limited liability company (A4)
Founding protocol limited liability company
Statement under Art. 142 of the Commercial Code of manager Ltd.
Specimen signature of the manager of a limited liability company
Contract for the formation of a limited liability company
Application for retention of the company (E1)
* Have in mind that the documents preparation and the procedure should be performed by a lawyer.
Main things you should know about Real Estate due diligence
A thorough due diligence report removes uncertainty from key decisions that must be made when analyzing the cost/benefit of any real estate transaction. A comprehensive inquiry should be designed to provide a buyer with clear pictures of where their strategies and decisions are taking them, or to put it simply – what it is they are buying.
There are a multitude of details which must be considered when dealing with purchasing a parcel of real estate. Many of these details are easily overlooked i.e. property and ownership documents. The function of due diligence is to independently verify all representations made by a prospective seller as well as to uncover pertinent facts which have not been disclosed but which are important to the buyer.
A multi-tenant property, either residential, office/retail or mixed use is the most complex for evaluation purposes.
After identifying a target property, due diligence starts during the contract negotiation stage. Unless the seller understands at the beginning of the process what document production and other information, will be required before the deal is closed, there is going to be automatic trouble in getting to the closing table. When a seller is presented with a thorough list of required due diligence items by a prospective purchaser, the seller can be overwhelmed.
A list of required due diligence items is essential in the purchase agreement and it is expected that there will be some negotiation as to what will and will not make it to the final contract.
At least 30 days after the delivery of all documents should be provided to complete due diligence.
Contracts should state that the purchaser must give written notice that all due diligence is complete and satisfactory, or that there would be no further obligation to proceed with the transaction. Generally, due diligence should not be undertaken until after the contract is executed by all parties. Any time triggers should be tied to the delivery date of the last document supplied by the seller, with provisions for the extension of time based on the appearance of any non-disclosed material documentation. By requiring written acceptance of the due diligence items, control of the deal can be maintained.
Beyond the physical condition of the property, there are a multitude of tangibles and intangibles that have to be taken into account when evaluating a site for acquisition.
There are many types of companies, jointly or separately, that provides due diligence services. Several provide their clients with a detailed market analysis of income, operating expenses, vacancy rates, rental competition, sold comparable, on-market competition, and available sources of financing. They will also gain knowledge of the property and all internal and external factors likely to affect its economic health, now and in the future. The benefit of having an independent evaluation ensures that an enlightened and clear assessment of a project’s potential and pitfalls will be exposed.
An evaluation of factors which an astute purchaser must consider are different and dependable upon the company that perform the due diligence process.
When considering the external physical conditions of a target property, an informed purchaser is well advised to secure the services of a licensed inspection service.
One result of a thorough due diligence process is that when the time comes to present a deal to either partners, investors, lenders or another buyer, one will have the level of information and knowledge surrounding the property that gives a clear picture of a property’s financial, legal and physical condition.
This information enables others to make lending and investing decisions relative to the property in an informed manner. In addition, proper due diligence also reflects favorably upon a purchaser in the eyes of lenders and cuts down on time bringing the transaction to loan closing.
The most important result, however, is that the buyer will receive the benefit of the bargain made and paid for, without receiving very unpleasant and possibly fatal news after the closing. Once the purchase price is paid, absent certain limited circumstances, the property with all of its faults belongs to the buyer, and if it isn’t worth what was paid, the buyer will have to live with the consequences.
Monday 30 November 2009
What is legal due diligence
Have you ever think about company acquisitions, and the phrase "legal due diligence" came up?
Do you wonder what "legal due diligence" means?
Most definitions of the legal due diligence say something like "due diligence is a measure of prudence, activity, or assiduity, as is properly to be expected from, and ordinarily exercised by, a reasonable and prudent person under the particular circumstances; not measured by any absolute standard but depends on the relative facts of the special case." In other words, to a potential acquirer, legal due diligence means "making sure you get what you think you are paying for."
Practically speaking, for any company acquisition, legal due diligence would include fully understanding all of the obligations of the company: debts, pending and potential lawsuits, leases, warranties, long-term customer agreements, employment contracts, distribution agreements, compensation arrangements, and so forth. Furthermore, for your company investments and acquisitions, legal due diligence also includes
• Understanding any ownership issues relative to the business of the company that is going to be acquired or invest in. For example, did the company really develop properly in its business.
• Will there be any special issues in maintaining the business.
"Legal Due Diligence" typically takes the form of the acquirer's list of several hundred questions and/or requests for copies of documents that you, as the potential seller, must answer for the seller on or before some date.
For the owner of the company, legal due diligence can be a very difficult and painful experience. It's difficult because you are essentially trying to prove a negative, the absence of any problems. The potential acquirer may keep coming back to you with more and move invasive requests, until you are about ready to scream "do you think I'm a crook? I told you we didn't have anything to hide!" Put yourself in the position of someone who is spending millions of dollars for something they can't see and can't touch, and perhaps you will understand a little better. It's painful because it's hard not to be insulted by questions like "Have any of the principals of the company ever been convicted of securities fraud? List all criminal convictions of the principals of the company."
If you are the owner of the company, the time to start thinking about legal due diligence is now. Every decision that you make, test it against the question "how will this look when someone comes along asking hard questions?" Every company is going to have to go through legal due diligence someday — when you are acquired, seek outside investment, or go public — unless you intend to remain small and family-owner forever.
As a seller, seeking outside investment or just decide to go public, you will also want to do your own legal due diligence on the acquirer. Do they actually have the funds to complete the transaction? If they are paying you with stock, what is the record of the stock? Is it likely to still be worth anything when your lockup period expires? How are they going to treat your employees? Are your corporate cultures compatible? If there is a large "earn out" component to the deal they are proposing, do they have a track record of successfully marketing products like yours? What is their incentive to do so? Are you sure? What happens if they do not? Will the acquisition stretch them — in terms of capital, management or otherwise — to the point that it will reduce their chances of success? Do they have a reputation for living up to the letter and the spirit of their commitments? How will they treat your customers? Will you be proud to be associated with this company?
Do you wonder what "legal due diligence" means?
Most definitions of the legal due diligence say something like "due diligence is a measure of prudence, activity, or assiduity, as is properly to be expected from, and ordinarily exercised by, a reasonable and prudent person under the particular circumstances; not measured by any absolute standard but depends on the relative facts of the special case." In other words, to a potential acquirer, legal due diligence means "making sure you get what you think you are paying for."
Practically speaking, for any company acquisition, legal due diligence would include fully understanding all of the obligations of the company: debts, pending and potential lawsuits, leases, warranties, long-term customer agreements, employment contracts, distribution agreements, compensation arrangements, and so forth. Furthermore, for your company investments and acquisitions, legal due diligence also includes
• Understanding any ownership issues relative to the business of the company that is going to be acquired or invest in. For example, did the company really develop properly in its business.
• Will there be any special issues in maintaining the business.
"Legal Due Diligence" typically takes the form of the acquirer's list of several hundred questions and/or requests for copies of documents that you, as the potential seller, must answer for the seller on or before some date.
For the owner of the company, legal due diligence can be a very difficult and painful experience. It's difficult because you are essentially trying to prove a negative, the absence of any problems. The potential acquirer may keep coming back to you with more and move invasive requests, until you are about ready to scream "do you think I'm a crook? I told you we didn't have anything to hide!" Put yourself in the position of someone who is spending millions of dollars for something they can't see and can't touch, and perhaps you will understand a little better. It's painful because it's hard not to be insulted by questions like "Have any of the principals of the company ever been convicted of securities fraud? List all criminal convictions of the principals of the company."
If you are the owner of the company, the time to start thinking about legal due diligence is now. Every decision that you make, test it against the question "how will this look when someone comes along asking hard questions?" Every company is going to have to go through legal due diligence someday — when you are acquired, seek outside investment, or go public — unless you intend to remain small and family-owner forever.
As a seller, seeking outside investment or just decide to go public, you will also want to do your own legal due diligence on the acquirer. Do they actually have the funds to complete the transaction? If they are paying you with stock, what is the record of the stock? Is it likely to still be worth anything when your lockup period expires? How are they going to treat your employees? Are your corporate cultures compatible? If there is a large "earn out" component to the deal they are proposing, do they have a track record of successfully marketing products like yours? What is their incentive to do so? Are you sure? What happens if they do not? Will the acquisition stretch them — in terms of capital, management or otherwise — to the point that it will reduce their chances of success? Do they have a reputation for living up to the letter and the spirit of their commitments? How will they treat your customers? Will you be proud to be associated with this company?
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