How to Register a Joint-Stock Company (JSC) in Bulgaria: A Step-by-Step Guide
Registering a Joint-Stock Company (JSC) in Bulgaria is a strategic choice for businesses looking to operate at a larger scale. A JSC allows for raising capital through the issuance of shares, providing flexibility and opportunities for growth. This guide explains the process and legal requirements for registering a JSC in Bulgaria.
What is a Joint-Stock Company (JSC)?
A Joint-Stock Company, or акционерно дружество (АД) in Bulgarian, is a legal entity designed for businesses requiring substantial capital. The company’s ownership is divided into shares, which may be traded or transferred. JSCs are commonly chosen by medium to large enterprises and are suitable for both public and private ventures.
Key Features of a Joint-Stock Company in Bulgaria
- Limited Liability: Shareholders’ liability is limited to the amount of their contributions.
- Minimum Capital: The minimum share capital is 50,000 BGN.
- Share Structure: Ownership is represented through shares, which may be ordinary or preferred.
- Governance: Managed by a board of directors (one-tier system) or supervisory and management boards (two-tier system).
Steps to Register a JSC in Bulgaria
- Prepare the Articles of Association
The Articles of Association (AoA) are the foundation of the JSC, outlining:
- The company name and registered office.
- Purpose and scope of business activities.
- Share capital structure and classes of shares.
- Rights and obligations of shareholders.
- Governance and decision-making processes.
- Reserve the Company Name
Choose a unique name for your JSC and check its availability in the Commercial Register. The name must include the abbreviation “АД” to denote its status as a Joint-Stock Company.
- Open a Capital Bank Account
Deposit the minimum share capital (50,000 BGN) into a dedicated bank account. The bank issues a certificate confirming the deposit, which is required for registration.
- Appoint the Governing Bodies
Depending on the chosen governance model:
- A one-tier system requires a board of directors.
- A two-tier system requires a management board and a supervisory board. The members must accept their roles in writing, and their details are submitted during registration.
- File for Registration with the Commercial Register
Submit the following documents:
- Application form (specific for JSC registration).
- Articles of Association.
- Bank certificate for the deposited capital.
- Details of governing body members.
- Minutes from the founding meeting.
- Declaration of compliance with the Commercial Register Act.
- Evidence of payment for state fees.
Legal and Operational Requirements
- Registered Address: The company must have a legal address in Bulgaria.
- Share Certificates: Issued to shareholders as proof of ownership.
- Auditing: JSCs must comply with annual auditing requirements, especially if they qualify as public-interest entities.
- Statutory Reserves: At least 10% of annual profits must be allocated to a reserve fund until the fund reaches 10% of the capital.
Benefits of a Joint-Stock Company
- Capital Flexibility: Shares can be sold or transferred, facilitating capital generation.
- Scalability: Ideal for large-scale operations and public offerings.
- Credibility: Perceived as a trustworthy and stable business entity.
Challenges in Registering a JSC
- Complex Documentation: The process requires meticulous preparation of legal documents.
- Higher Costs: Compared to other company types, the registration and maintenance costs are higher.
- Regulatory Compliance: JSCs are subject to strict governance and reporting requirements.
Why Choose Legal Frame?
Legal Frame specializes in company registrations, including Joint-Stock Companies. Our experienced lawyers ensure a smooth process, handling everything from document preparation to post-registration compliance.
Our Services Include:
- Drafting the Articles of Association.
- Preparing all necessary registration documents.
- Providing guidance on governance models.
- Ensuring compliance with Bulgarian commercial laws.
Contact Us Today
Registering a Joint-Stock Company in Bulgaria can be a complex process, but with the right guidance, it becomes straightforward and efficient. Contact Legal Frame to start your JSC registration journey with confidence.
