{"id":784,"date":"2015-11-02T11:54:53","date_gmt":"2015-11-02T11:54:53","guid":{"rendered":"http:\/\/www.preciz.bg\/en\/?p=784"},"modified":"2022-08-25T14:35:07","modified_gmt":"2022-08-25T14:35:07","slug":"how-to-choose-legal-form-upon-registration-of-a-company-in-bulgaria-part-1","status":"publish","type":"post","link":"http:\/\/www.preciz.bg\/en\/how-to-choose-legal-form-upon-registration-of-a-company-in-bulgaria-part-1\/","title":{"rendered":"How to choose legal form upon registration of a company in Bulgaria \u2013 Part 1"},"content":{"rendered":"<div class=\"fusion-fullwidth fullwidth-box fusion-builder-row-1 nonhundred-percent-fullwidth non-hundred-percent-height-scrolling\" style=\"background-color: rgba(255,255,255,0);background-position: left top;background-repeat: no-repeat;padding-top:20px;padding-right:0px;padding-bottom:20px;padding-left:0px;margin-bottom: 0px;margin-top: 0px;border-width: 0px 0px 0px 0px;border-color:#eae9e9;border-style:solid;\" ><div class=\"fusion-builder-row fusion-row\"><div class=\"fusion-layout-column fusion_builder_column fusion-builder-column-0 fusion_builder_column_1_1 1_1 fusion-one-full fusion-column-first fusion-column-last fusion-column-no-min-height\" style=\"margin-top:0px;margin-bottom:0px;\"><div class=\"fusion-column-wrapper fusion-flex-column-wrapper-legacy\" style=\"background-position:left top;background-repeat:no-repeat;-webkit-background-size:cover;-moz-background-size:cover;-o-background-size:cover;background-size:cover;padding: 0px 0px 0px 0px;\"><div class=\"fusion-text fusion-text-1\"><h2>What are the types of merchants according to the Commercial Law and how to choose among them upon a registration of a company in Bulgaria?<\/h2>\n<\/div><div class=\"fusion-text fusion-text-2\"><p><img class=\"alignleft wp-image-709 size-medium\" src=\"http:\/\/www.preciz.bg\/wp-content\/uploads\/2015\/09\/SplitShire_IMG_9950-300x200.jpg\" alt=\"\u0421\u0447\u0435\u0442\u043e\u0432\u043e\u0434\u043d\u0430 \u043a\u044a\u0449\u0430 \u041f\u0440\u0435\u0446\u0438\u0437 - \u041a\u0430\u043a \u0434\u0430 \u0438\u0437\u0431\u0435\u0440\u0435\u043c \u043f\u0440\u0430\u0432\u043d\u0430 \u0444\u043e\u0440\u043c\u0430 \u043f\u0440\u0438 \u0440\u0435\u0433\u0438\u0441\u0442\u0440\u0430\u0446\u0438\u044f \u043d\u0430 \u0444\u0438\u0440\u043c\u0430 - \u0447\u0430\u0441\u0442 1\" width=\"300\" height=\"200\" srcset=\"http:\/\/www.preciz.bg\/wp-content\/uploads\/2015\/09\/SplitShire_IMG_9950-300x200.jpg 300w, http:\/\/www.preciz.bg\/wp-content\/uploads\/2015\/09\/SplitShire_IMG_9950.jpg 448w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><\/p>\n<p>The Commercial Law defines that a Merchant is any individual or corporate body engaged by occupation in any of the listed in the Commercial Law transactions, or who has established a business, which in accordance with its purposes and volume required that its activities be conducted on a commercial basis.<\/p>\n<p>In this article will be reviewed the types of merchants according to the Commercial Law and its advantages and disadvantages. Our goal will be that you are able to make an easy decision upon registration of a company in Bulgaria<\/p>\n<p><strong>Sole Entrepreneur <\/strong><\/p>\n<p>Any natural person capable of acting having his place of residence in the country, who has no insolvency proceedings opened against his assets; who is not in bankrupt; whose commercial rights have not been removed and have not been restored yet; that has not been convicted for bankruptcy. Characteristics of the Sole Entrepreneur is that:<\/p>\n<p>\u2013 there are no requirements about the paid \u2013 in capital<\/p>\n<p>\u2013 the merchant is \u201cunlimited\u201d responsible for all liabilities of the company<\/p>\n<p>\u2013 has simplified accounting<\/p>\n<p>\u2013 registration is relatively inexpensive<\/p>\n<p>Until recently, Sole Entrepreneur was the preferred legal form for registration of a company in Bulgaria. Main reason about that was the absence of requirements about the minimum capital required, while until 2009, the minimum capital required for a Limited liability company (Ltd.) was 5 000 levs\/BGN (approximately 2\u00a0556 euro). The simplicity in the bookkeeping can be another advantage, which is, however rather insignificant.<\/p>\n<p>Sole Entrepreneur has a very significant disadvantage \u2013 \u201cunlimited\u201d liability, borne by the individual, for all obligations of the enterprise. This significant risk and changes in the requirements about the minimum capital required for registration of Ltd., which is currently 2 levs (approx. 1 euro ), led to significantly less registrations of Sole Entrepreneur today.<\/p>\n<p><strong>General partnership, limited partnership and the partnership limited by shares<\/strong><\/p>\n<p>These three forms of commercial companies are the rarest in the market conditions in the country. The reasons about it are justified \u2013 these companies pose a significant risk to their owners. In those, as in the Sole Entrepreneur, there are no requirements about the minimum capital required, but there is an \u201cunlimited\u201d liability for the obligations of the enterprise on at least one of the partners. For example in the general partnership, the liability of all partners is personal, unlimited and subsidiary, while in the limited partnership and the partnership limited by shares, such liability is borne by at least one of the partners.<\/p>\n<p><strong>What is limited and unlimited liability and why is that such an essential question?<\/strong><\/p>\n<p>Unlimited liability, in general means that in addition to all the assets of the enterprise, its owners are responsible for all its liabilities with all of their own personal property. Like this, in case of the onset of bankrupt, if a creditor has a claim for repayment of its debts, that the company cannot cover, the creditor has the right to direct that claim to the property of each of the owners with unlimited liability.<\/p>\n<p>Limited liability, on the other hand, means that each partner is liable only up to the amount of their share in the enterprise. Thus, if we consider the example given above, the creditor cannot direct his claim to the personal property of any of the owners. The limited liability significantly reduces the risk taken by the investors, which is the reason why the limited liability companies are the most preferred legal form for registration of companies in Bulgaria.<\/p>\n<p><em>(to be continued)<\/em><\/p>\n<\/div><div class=\"fusion-clearfix\"><\/div><\/div><\/div><\/div><\/div>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":1,"featured_media":710,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v19.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How to chose a legal form upon registration of a company in Bulgaria<\/title>\n<meta name=\"description\" content=\"What types of merchants are there according to the Commercial law and how to easily chose upon registration of a company in Bulgaria - part 1\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.preciz.bg\/en\/how-to-choose-legal-form-upon-registration-of-a-company-in-bulgaria-part-1\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How to chose a legal form upon registration of a company in Bulgaria\" \/>\n<meta property=\"og:description\" content=\"What types of merchants are there according to the Commercial law and how to easily chose upon registration of a company in Bulgaria - 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