Notification of communications in the matter of civil and commercial relations.
This article focuses on the topic of potential notices/correspondence between private entities that must communicate material statements to other private entities (whether contractually bound or not) and their probative value/effectiveness in potential and subsequent litigation. According to the prevailing jurisprudence, if there is a valid and effective contract and it provides for a method of communication freely chosen by the contracting parties, that method is the one that must be followed in the communication relationship between the two or more contracting parties. In any case, the entity is given the right (even in the presence of a contract that provides for a specific method of communication between the entities) to continue sending statements by other methods, for example, mail or authorized postal operators (couriers). In the case of delivery by registered letter, it is settled case law that it is always possible for the addressee to dispute the contents of the postal envelope even in the event of actual receipt of the same, since the return receipt certifies the receipt of a “letter” but never certifies what is the content of this letter.
A division is a form of transformation whereby one company (called the “converting”) (whether an LLC or an JSC) is being divided into two or more companies (called the “acquiring companies”). The division consists in the fact that the transforming company is terminated without liquidation and a corresponding part of its assets, rights and obligations and activities pass to the acquiring companies. It is possible that some of the acquiring companies are newly created and others already established. In the case of conversion by division, the receiving companies cannot change their legal form (e.g. from LLC to JSC).
Procedure.
A. Conversion Agreement.
Before the conversion decision is made, a conversion contract is concluded between the receiving and/or converting companies participating in it. The conversion contract is concluded by the persons representing the company in writing with notarization of their signatures. The conversion agreement sets out how the conversion will take place and must contain at least the following elements:
The issue, the subject of this article, is legally regulated in Art. 125, para. 3 of the Commercial Law, which stipulates that when a partner in a limited liability company terminates his participation in the company, the property consequences are settled on the basis of an accounting balance at the end of the month in which the termination occurred. The specified provision determines the moment of drawing up the accounting balance, according to which his claim will be calculated. The judicial practice (Decision No. 224/2010 of the Supreme Court of Appeal) accepts that this legal provision is of an imperative nature and the partners cannot overcome neither with an agreement to the contrary nor with a stipulation in the partnership agreement. Such a stipulation would be void based on Art. 26, para. 1 of the ZZD. Jurisprudence, on the other hand, is not clear regarding the “dimensions/nature” of this imperative character and the question remains open whether it is only about the amount due and the way of its calculation /certainly imperative/ or about the way of payment of cases of the partner. Therefore, the question arises as to whether it is mandatory to satisfy the departed partner only by paying a sum of money or the property issues related to the relationship can be resolved using assets of a non-monetary nature as well, on the basis of mutual agreement between the parties (the partner as creditor and the company as debtor). It seems that the law is not clear enough on this point.
1. Procedure: The procedure for the purchase and sale of shares in an Ltd. /limited liability company/ is governed by Art. 129 of the Commercial Law, where it is stated: “1. The company share can be transferred and inherited. The transfer of shares in the company from one partner to another is carried out freely, and to third parties – subject to compliance with the requirements for accepting a new partner and if there are no unpaid wages, benefits and mandatory insurance contributions of workers and employees, including employees whose labor legal relations were terminated up to three years before the transfer of the company share. 2. The transfer of the company share is carried out with a contract drawn up with notarization of the signatures and content, after which it is entered in the commercial register.
This article aims to outline the order and nature of the conditions for suspending the registration/deletion procedure of the circumstances related to the companies’ activities.
1. The registration procedure (in general). The procedure for entering acts in the commercial register is regulated in Chapter Two, Art. 13 et seq. of the Commercial Register and Non-Profit Legal Entities Act (ZTRRYULNC), which is a type of protective proceeding similar to that under Art. 530 of the Civil Procedure Code (CPC).
The main participant in this proceeding is the entity requesting registration and the procedure is aimed at protecting interests, with a view to achieving the effect of registration, deletion and announcement, i.e. the legal consequences that are beneficial to the applicant, but the registration itself cannot be intended to damage the legal sphere of third parties.
In Bulgarian law, in the event of arbitration decision which provides for a definition of relations between two or more parties with respect to a contract, there is a possibility of a formal review of the decision, which is expressed by an appeal to the Supreme Court of Cassation for annulment of the arbitration decision.
This possibility of cancellation is regulated in Art. 47 of the International Commercial Arbitration Act. The term in which the request can be submitted is three months from the day on which the party received the arbitration decision. Arbitral tribunals usually send their decisions to the parties by post, courier or in person.
The deadline for submitting the request for revocation starts from the date of receipt of the arbitration decision.
The management and control contract is regulated by the Commercial Law, which requires the relationship between the capital company and the manager to be regulated by a management assignment contract. The contract is concluded in writing on behalf of the company through a person authorized by a general meeting of partners or by the sole owner of the capital (art. 141, para. 7 – for limited liability companies and art. 244, para. 7, for joint-stock company).
The management contract is not an employment contract, but a civil contract, the main purpose of which is to regulate the relations between the company, on the one hand, and its manager (or a member of the Board of Directors for joint-stock companies), on the other.
Each manager of a limited liability company (OOD) is liable with his assets for damage caused to the company (Article 145 of the Commercial Law). The factual composition of this type of civil liability concerns the culpable, unlawful non-fulfillment of the duties of the managedr, whose behavior hinders the management of the company and from which damage has been caused. The right of the company to claim financial compensation for the non-fulfillment of the contractual and organizational obligation of the director derives from his activity as an administrative body, expressed in both active and omissive behavior and the company has the right, through the body of shareholders' meeting, to decide to take legal action against the director.
The protection of real rights includes claims regulated by the norms of real law – reclamation claim, negator claim, claim for defining boundaries, claim for incompleteness and errors in the cadastral plan. These claims have a real nature and by exercising them, the owner of a real right aims to have any violation of his right by other entities recognized and stopped. The defense consists in recognizing the plaintiff’s right in rem and ordering the defendant to cease the infringement. Therefore, the claimant must prove his right of ownership (or other limited right in rem) to the suit property.
In bankruptcy proceedings, one of the main functions is that of the bankruptcy trustee.
1. Function, competence and limitations:
With the opening of the procedure, a temporary bankruptcy trustee must be appointed, after which the permanent bankruptcy trustee is elected by the creditors’ meeting, which monitors the regular course of the entire procedure. The bankruptcy trustee, in addition to the powers identical to those of the permanent bankruptcy trustee, has the obligation to prepare initial documents such as a list of creditors, a list of creditors who are or were connected to the debtor in the last three years before the opening of bankruptcy proceedings, a statement of the balance sheet of the company, etc. Next follows the first meeting of creditors with accepted credits, at which a permanent bankruptcy trustee is appointed.
I. Relative Invalidity to Creditors In the bankruptcy proceedings:
Тhe possibility to ensure the preservation of the bankruptcy estate is provided in order to protect the interests of the creditors.
Art. 646 of the Commercial Law governs the institute of relative nullity of the following transactions vis-à-vis creditors, carried out after the date of opening of bankruptcy proceedings and and not under the procedure established in the proceedings:
1. performance of an obligation arising prior to the date of the decision on initiation of bankruptcy proceedings;
I. General regulations:
Commercial companies can be transformed by merger (incorporation), division, demerger and separation of a sole proprietorship, as well as by changing the legal form. (e.g. a limited liability company in a joint-stock company or vice versa) and unless the law provides otherwise, these companies can be of different form and type and nature.
At the time of the conversion, the partners or shareholders of the converting companies become partners or shareholders of one or more of the newly established and/or acquiring companies and the shares acquired after the conversion must correspond to the value of the shares held before conversion.
I. The procedure in general
The corporate share represents a portion of ownership in the company, which corresponds to the title of ownership recognized to the shareholder subscribed in the capital. The fee represents the existence of an associative relationship, which includes patrimonial and non-patrimonial rights and duties (right to vote, right to participate in social affairs, etc.). The company shares can be transferred, by deed between vivos or mortis causa, and divided. In fact, the shares can also be enforced in favor of the owner's shareholder creditors. We focus on a case that recurs frequently, namely the execution on a share in LLC and the consequences for the company. According to art. 517, par. 1, of the Code of Civil Procedure, at the beginning of the implementation of the executive procedure, a title of execution is imposed on the share.
In the course of insolvency proceedings, the law enables the debtor to conclude an extrajudicial agreement with the creditors, which is a multilateral agreement between the debtor and all creditors with claims accepted in the proceedings.
The contract for the settlement of obligations may be concluded in any situation of the insolvency proceedings. The legal framework of this agreement is specified in Art. 740 of the Commercial Law, which reads as follows:
The purpose of this article is to outline the main characteristics of two of the main types of guarantees in the field of commercial law – special and commercial pledge.
I. Special pledge.
This law is regulated in the Special Pledges Act (promulgated SG No. 100 of 22 November 1996). One of the main features is that the special pledge is always agreed, as the law does not regulate hypotheses in which it arises ex lege (ie by law). On the basis of a concluded contract for a special pledge, the pledge creditor may be satisfied preferably from the pledged property in case of non-fulfillment of the obligation secured by the pledge. The contract is unilateral, as it creates obligations for only one party – the pledgor.
In view of the necessity to unify the case law and the proper application of the law in the field of guarantees and repayment of monetary debts, which is widely used in banking field and in many cases against guarantor debtors, the Supreme Court of Cassation issued an interpretative decision № 5 of 21.01. 2022 on the following question:
When declaring the debtor bankrupt, there are special rules for enforcement of public receivables, which are regulated in the Tax and Social Security Procedure Code /TSSPC/. The procedure aims to indicate the priority of collection of public receivables in cases where, together with the initiated proceedings for enforcement under the TSSPC, insolvency proceedings are opened.
This article aims to focus on the procedure (and consequences) of declaring the establishment of a company invalid. The institute for invalidity of the establishment of a commercial company is regulated in art. 70 of the Commercial Law, which provides for the following:
‘The incorporation of a company shall be invalid only if one of the following infringements has been committed: there is no memorandum of association or it has not been drawn up in the form prescribed by law;
At European Union level, the COVID-19 Digital Certificate Regulation (Reg. (EU) 2021/953 of 14 June 2021) was adopted, which is directly applicable in all Member States from 1 July 2021 (it is set to be applied until 30 June 2022). Its aim is to ensure the free movement of citizens within the EU during the pandemic caused by COVID-19. The certificate provided for in the above Regulation contains an interoperable and machine-readable QR code, which must be provided on paper or digitally.
PROCEDURE AND DISPUTES CONCERNING THE AMOUNT OF THE CASE OF THE LEAVING PARTNER.
By virtue of Art. 125, para. 2 of the Commercial Law, it is possible that each partner voluntarily terminates his membership in a limited liability company by written notice of (at least) three months. The term starts from the moment the company receives the notification. The duration of the term is not regulated by law as mandatory and accordingly the company contract may provide for a longer different term.
All e-commerce actors are interested in the new legislation, from retailers and online markets / platforms (both inside and outside the EU) to postal operators and couriers, customs, tax administrations and consumers. From 1 July 2021, the VAT rules for cross-border activities in the consumer market (B2C) in e-commerce have changed. The reason for these changes is to overcome the barriers to cross-border online sales and to overcome the challenges arising from VAT regimes for distance sales of goods, especially for the import of low value shipments.
A 10-year prescription period for monetary obligations of individuals was introduced by the Parliamentary Legal Affairs Committee. With the addition of a renewed art. 112 in the Law on Obligations and Contracts, an absolute prescription, unknown till now in Bulgarian private law, is established. The provision reads as follows:
1. Nature of the lease agreement
The lease contract for real estate is regulated by the Law on Obligations and Contracts . Pursuant to art. 228 of the Law on Obligations and Contracts, with the lease contract, the lessor is obliged to provide the lessee with an movable or immovable property for temporary use and the lessee is obliged to pay a certain price.
Special responsibility of the builder, warranty obligation, characteristics and regulations.
The legislation related to the warranty periods for completed construction and installation works is contained in the Spatial Planning Act and Ordinance № 2 of 31.07.2003 on the commissioning of construction works in the Republic of Bulgaria and minimum warranty periods for completed construction and installation works, facilities and construction sites (Ordinance №2 / 2003).
Main accents
The Community law regulates the European company as a mixed form of companies with registered seats or activities in different Member States, regulated by different legal systems. In this regard are established uniform rules, most of them referring to the provisions concerning the joint stock companies, regulated by the law of the Member State in which the company decides to open its registered office.
I. INTRODUCTION
The present complicated situation caused by the diffusion of COVID-19 raises a number of questions related to the settlement of the commercial relationships. The biggest preoccupation is in the fact that the termination of lot of activities causes a perceptible reduction in the turnover of the traders who have rent contracts of commercial space, making it difficult for them to fulfill their contractual obligations and to pay the rental price.
I. Funding by the European Commission
The European Commission has approved a public guarantee scheme of BGN 500 million (approximately EUR 255 million) in support of small and medium-sized enterprises in the context of the outbreak of the COVID-19 pandemic.
The problem
The urgent situation created by the rapid spread of Coronavirus causes a significant impact not only on individuals and their freedoms, but also on companies that may find themselves in real difficulty and unable to fulfil their contractual obligations properly.
In the complicated situation caused by the diffusion of Coronavirus (Covid-19) and the changed economic conditions in Bulgaria and around the world, many commercial banks have taken measures to facilitate their customers. Part of the measures consist in facilitating banking, payment and other administrative services, and others in extending credit terms.
With the donation contract, the donor gives up immediately and gratuitously something to the donated person who accepts it.
The corporate tax framework allows donors to ease their tax obligations by reducing the taxable amount of the donation.
These types of companies are not explicitly regulated by the Bulgarian legislation in force, but they still find their basis in the Obligations and Contracts Act (Art. 357 et seq.), In the Commercial Act (Art. 609), and in the Taxation Code (Art. 19, para. 8 ).
The purpose of this article is to examine the most specific features of the formation and nature of holding companies under Bulgarian law. This type of business education is regulated by the Commercial Law, the Corporate Income Tax Act, the Tax Insurance Procedure Code, the Credit Institutions Act, the Special Investment Purpose Companies Act, and some other subordinate legislation.
The holding is like a consortium-like structure, but in difference of the consortium, in the holding there is one company (the parent – the holding company which holds or controls part of the capital and / or management of the other subsidiaries and for which the law provides for a specific activity).
The liquidation is one of the ways for termination of a limited liability company under Bulgarian law. The procedure is regulated by the Bulgarian Commercial Law (Articles 154-157, Articles 266-274), the Corporate Income Tax Act – Chapter 21, the Commercial Register Act – Art. 4, Art. 6, para. 2, the Tax and Social Insurance Procedure Code (Article 77), the Social Security Code (Article 5, paragraph 10) and some other subordinate legislation.
The purpose of the liquidation procedure is to terminate the Ltd with its subsequent cancellation from the Commercial Register, and next the company ceases to be a legal entity and terminates its existence towards the state and third parties.
A joint-stock company (AD) is a type of trading company where two or more persons (natural or legal) merge for the purpose of conducting commercial transactions with common funds and their liability is limited to the amount of their contribution to the capital. AD is a capital trading company, the capital of which is divided into shares and may be owned by a number of persons with different percentages of capital and different rights under the Articles of Association. It is necessary for every person holding a share in the capital of the company to be able to protect their membership rights against unlawful or harmful actions by bodies of the company itself.
Initially, each ordinary share in the capital of the company gives its holder two types of rights: 1. Material (right to dividend and right to liquidation share) and 2. Non-material (right to participate in the management through the general meeting, right to vote, right to information , the right to subscribe to new shares, etc.)
It is possible to issue so-called preferred shares.
According to the Social Security Code, the basic costs of supplementary social insurance for persons employed under a contract of employment born after 1960 are […]
Until the latest amendments to the Commercial Law (SG 88/2018) came into force, the holding of bearer shares was allowed in Bulgaria.
Their legal framework provided the possibility of transferring them with a simple transmission, which in turn allowed the holder to remain formally anonymous.
With the amendment of the Commercial Law promulgated in the State Gazette. pcs. 88 of 23
October 2018, effective from the same date, the bearer shares issued (or temporary certificates thereof) are replaced by registered shares.
Pursuant to § 11 of the LCP to the Commercial Law, within the 9-month period from 23.10.2018, i.e. until 23.07.2019, the companies that have issued bearer shares or temporary certificates, shall be obliged to:
The requirements for registration of a company or branch are set out in the Commercial Law, the Commercial Register Act and the implementing regulations. The registration procedure depends on the type of company to be registered, considering that the registration of a Joint Stock Company (JSC) (as well as a Limited Liability Company) currently takes approximately five working days from the filing of the relevant registration documents. It takes about two weeks for a branch of a foreign company. The registered company or branch becomes a legal entity from the date of its entry in the Commercial Register.
The first phase of setting up a new company is to choose the type of company among the ones provided by the Bulgarian legislation, as well as to have clarity on the following specific elements of incorporation:
Notification of communications in the matter of civil and commercial relations. This article focuses on the topic of potential notices/correspondence between private entities that must communicate material statements to other private entities (whether contractually bound or not) and their probative value/effectiveness in potential and subsequent litigation. According to the prevailing jurisprudence, if there is a valid and effective contract and it provides for a method of communication freely chosen by the contracting parties, that method is the one that must be followed in the communication relationship between the two or more contracting parties. In any case, the entity is given the right (even in the presence of a contract that provides for a specific method of communication between the entities) to continue sending statements by other methods, for example, mail or authorized postal operators (couriers). In the case of delivery by registered letter, it is settled case law that it is always possible for the addressee to dispute the contents of the postal envelope even in the event of actual receipt of the same, since the return receipt certifies the receipt of a “letter” but never certifies what is the content of this letter.
A division is a form of transformation whereby one company (called the “converting”) (whether an LLC or an JSC) is being divided into two or more companies (called the “acquiring companies”). The division consists in the fact that the transforming company is terminated without liquidation and a corresponding part of its assets, rights and obligations and activities pass to the acquiring companies. It is possible that some of the acquiring companies are newly created and others already established. In the case of conversion by division, the receiving companies cannot change their legal form (e.g. from LLC to JSC). Procedure. A. Conversion Agreement. Before the conversion decision is made, a conversion contract is concluded between the receiving and/or converting companies participating in it. The conversion contract is concluded by the persons representing the company in writing with notarization of their signatures. The conversion agreement sets out how the conversion will take place and must contain at least the following elements:
The issue, the subject of this article, is legally regulated in Art. 125, para. 3 of the Commercial Law, which stipulates that when a partner in a limited liability company terminates his participation in the company, the property consequences are settled on the basis of an accounting balance at the end of the month in which the termination occurred. The specified provision determines the moment of drawing up the accounting balance, according to which his claim will be calculated. The judicial practice (Decision No. 224/2010 of the Supreme Court of Appeal) accepts that this legal provision is of an imperative nature and the partners cannot overcome neither with an agreement to the contrary nor with a stipulation in the partnership agreement. Such a stipulation would be void based on Art. 26, para. 1 of the ZZD. Jurisprudence, on the other hand, is not clear regarding the “dimensions/nature” of this imperative character and the question remains open whether it is only about the amount due and the way of its calculation /certainly imperative/ or about the way of payment of cases of the partner. Therefore, the question arises as to whether it is mandatory to satisfy the departed partner only by paying a sum of money or the property issues related to the relationship can be resolved using assets of a non-monetary nature as well, on the basis of mutual agreement between the parties (the partner as creditor and the company as debtor). It seems that the law is not clear enough on this point.
1. Procedure: The procedure for the purchase and sale of shares in an Ltd. /limited liability company/ is governed by Art. 129 of the Commercial Law, where it is stated: “1. The company share can be transferred and inherited. The transfer of shares in the company from one partner to another is carried out freely, and to third parties – subject to compliance with the requirements for accepting a new partner and if there are no unpaid wages, benefits and mandatory insurance contributions of workers and employees, including employees whose labor legal relations were terminated up to three years before the transfer of the company share. 2. The transfer of the company share is carried out with a contract drawn up with notarization of the signatures and content, after which it is entered in the commercial register.
This article aims to outline the order and nature of the conditions for suspending the registration/deletion procedure of the circumstances related to the companies’ activities. 1. The registration procedure (in general). The procedure for entering acts in the commercial register is regulated in Chapter Two, Art. 13 et seq. of the Commercial Register and Non-Profit Legal Entities Act (ZTRRYULNC), which is a type of protective proceeding similar to that under Art. 530 of the Civil Procedure Code (CPC). The main participant in this proceeding is the entity requesting registration and the procedure is aimed at protecting interests, with a view to achieving the effect of registration, deletion and announcement, i.e. the legal consequences that are beneficial to the applicant, but the registration itself cannot be intended to damage the legal sphere of third parties.
In Bulgarian law, in the event of arbitration decision which provides for a definition of relations between two or more parties with respect to a contract, there is a possibility of a formal review of the decision, which is expressed by an appeal to the Supreme Court of Cassation for annulment of the arbitration decision. This possibility of cancellation is regulated in Art. 47 of the International Commercial Arbitration Act. The term in which the request can be submitted is three months from the day on which the party received the arbitration decision. Arbitral tribunals usually send their decisions to the parties by post, courier or in person. The deadline for submitting the request for revocation starts from the date of receipt of the arbitration decision.
The management and control contract is regulated by the Commercial Law, which requires the relationship between the capital company and the manager to be regulated by a management assignment contract. The contract is concluded in writing on behalf of the company through a person authorized by a general meeting of partners or by the sole owner of the capital (art. 141, para. 7 – for limited liability companies and art. 244, para. 7, for joint-stock company). The management contract is not an employment contract, but a civil contract, the main purpose of which is to regulate the relations between the company, on the one hand, and its manager (or a member of the Board of Directors for joint-stock companies), on the other.
Each manager of a limited liability company (OOD) is liable with his assets for damage caused to the company (Article 145 of the Commercial Law). The factual composition of this type of civil liability concerns the culpable, unlawful non-fulfillment of the duties of the managedr, whose behavior hinders the management of the company and from which damage has been caused. The right of the company to claim financial compensation for the non-fulfillment of the contractual and organizational obligation of the director derives from his activity as an administrative body, expressed in both active and omissive behavior and the company has the right, through the body of shareholders' meeting, to decide to take legal action against the director.
The protection of real rights includes claims regulated by the norms of real law – reclamation claim, negator claim, claim for defining boundaries, claim for incompleteness and errors in the cadastral plan. These claims have a real nature and by exercising them, the owner of a real right aims to have any violation of his right by other entities recognized and stopped. The defense consists in recognizing the plaintiff’s right in rem and ordering the defendant to cease the infringement. Therefore, the claimant must prove his right of ownership (or other limited right in rem) to the suit property.
In bankruptcy proceedings, one of the main functions is that of the bankruptcy trustee. 1. Function, competence and limitations: With the opening of the procedure, a temporary bankruptcy trustee must be appointed, after which the permanent bankruptcy trustee is elected by the creditors’ meeting, which monitors the regular course of the entire procedure. The bankruptcy trustee, in addition to the powers identical to those of the permanent bankruptcy trustee, has the obligation to prepare initial documents such as a list of creditors, a list of creditors who are or were connected to the debtor in the last three years before the opening of bankruptcy proceedings, a statement of the balance sheet of the company, etc. Next follows the first meeting of creditors with accepted credits, at which a permanent bankruptcy trustee is appointed.
I. Relative Invalidity to Creditors In the bankruptcy proceedings: Тhe possibility to ensure the preservation of the bankruptcy estate is provided in order to protect the interests of the creditors. Art. 646 of the Commercial Law governs the institute of relative nullity of the following transactions vis-à-vis creditors, carried out after the date of opening of bankruptcy proceedings and and not under the procedure established in the proceedings: 1. performance of an obligation arising prior to the date of the decision on initiation of bankruptcy proceedings;
I. General regulations: Commercial companies can be transformed by merger (incorporation), division, demerger and separation of a sole proprietorship, as well as by changing the legal form. (e.g. a limited liability company in a joint-stock company or vice versa) and unless the law provides otherwise, these companies can be of different form and type and nature. At the time of the conversion, the partners or shareholders of the converting companies become partners or shareholders of one or more of the newly established and/or acquiring companies and the shares acquired after the conversion must correspond to the value of the shares held before conversion.
I. The procedure in general The corporate share represents a portion of ownership in the company, which corresponds to the title of ownership recognized to the shareholder subscribed in the capital. The fee represents the existence of an associative relationship, which includes patrimonial and non-patrimonial rights and duties (right to vote, right to participate in social affairs, etc.). The company shares can be transferred, by deed between vivos or mortis causa, and divided. In fact, the shares can also be enforced in favor of the owner's shareholder creditors. We focus on a case that recurs frequently, namely the execution on a share in LLC and the consequences for the company. According to art. 517, par. 1, of the Code of Civil Procedure, at the beginning of the implementation of the executive procedure, a title of execution is imposed on the share.
In the course of insolvency proceedings, the law enables the debtor to conclude an extrajudicial agreement with the creditors, which is a multilateral agreement between the debtor and all creditors with claims accepted in the proceedings. The contract for the settlement of obligations may be concluded in any situation of the insolvency proceedings. The legal framework of this agreement is specified in Art. 740 of the Commercial Law, which reads as follows:
The purpose of this article is to outline the main characteristics of two of the main types of guarantees in the field of commercial law – special and commercial pledge. I. Special pledge. This law is regulated in the Special Pledges Act (promulgated SG No. 100 of 22 November 1996). One of the main features is that the special pledge is always agreed, as the law does not regulate hypotheses in which it arises ex lege (ie by law). On the basis of a concluded contract for a special pledge, the pledge creditor may be satisfied preferably from the pledged property in case of non-fulfillment of the obligation secured by the pledge. The contract is unilateral, as it creates obligations for only one party – the pledgor.
In view of the necessity to unify the case law and the proper application of the law in the field of guarantees and repayment of monetary debts, which is widely used in banking field and in many cases against guarantor debtors, the Supreme Court of Cassation issued an interpretative decision № 5 of 21.01. 2022 on the following question:
When declaring the debtor bankrupt, there are special rules for enforcement of public receivables, which are regulated in the Tax and Social Security Procedure Code /TSSPC/. The procedure aims to indicate the priority of collection of public receivables in cases where, together with the initiated proceedings for enforcement under the TSSPC, insolvency proceedings are opened.
This article aims to focus on the procedure (and consequences) of declaring the establishment of a company invalid. The institute for invalidity of the establishment of a commercial company is regulated in art. 70 of the Commercial Law, which provides for the following: ‘The incorporation of a company shall be invalid only if one of the following infringements has been committed: there is no memorandum of association or it has not been drawn up in the form prescribed by law;
At European Union level, the COVID-19 Digital Certificate Regulation (Reg. (EU) 2021/953 of 14 June 2021) was adopted, which is directly applicable in all Member States from 1 July 2021 (it is set to be applied until 30 June 2022). Its aim is to ensure the free movement of citizens within the EU during the pandemic caused by COVID-19. The certificate provided for in the above Regulation contains an interoperable and machine-readable QR code, which must be provided on paper or digitally.
PROCEDURE AND DISPUTES CONCERNING THE AMOUNT OF THE CASE OF THE LEAVING PARTNER. By virtue of Art. 125, para. 2 of the Commercial Law, it is possible that each partner voluntarily terminates his membership in a limited liability company by written notice of (at least) three months. The term starts from the moment the company receives the notification. The duration of the term is not regulated by law as mandatory and accordingly the company contract may provide for a longer different term.
All e-commerce actors are interested in the new legislation, from retailers and online markets / platforms (both inside and outside the EU) to postal operators and couriers, customs, tax administrations and consumers. From 1 July 2021, the VAT rules for cross-border activities in the consumer market (B2C) in e-commerce have changed. The reason for these changes is to overcome the barriers to cross-border online sales and to overcome the challenges arising from VAT regimes for distance sales of goods, especially for the import of low value shipments.
A 10-year prescription period for monetary obligations of individuals was introduced by the Parliamentary Legal Affairs Committee. With the addition of a renewed art. 112 in the Law on Obligations and Contracts, an absolute prescription, unknown till now in Bulgarian private law, is established. The provision reads as follows:
1. Nature of the lease agreement The lease contract for real estate is regulated by the Law on Obligations and Contracts . Pursuant to art. 228 of the Law on Obligations and Contracts, with the lease contract, the lessor is obliged to provide the lessee with an movable or immovable property for temporary use and the lessee is obliged to pay a certain price.
Special responsibility of the builder, warranty obligation, characteristics and regulations. The legislation related to the warranty periods for completed construction and installation works is contained in the Spatial Planning Act and Ordinance № 2 of 31.07.2003 on the commissioning of construction works in the Republic of Bulgaria and minimum warranty periods for completed construction and installation works, facilities and construction sites (Ordinance №2 / 2003).
Main accents The Community law regulates the European company as a mixed form of companies with registered seats or activities in different Member States, regulated by different legal systems. In this regard are established uniform rules, most of them referring to the provisions concerning the joint stock companies, regulated by the law of the Member State in which the company decides to open its registered office.
I. INTRODUCTION The present complicated situation caused by the diffusion of COVID-19 raises a number of questions related to the settlement of the commercial relationships. The biggest preoccupation is in the fact that the termination of lot of activities causes a perceptible reduction in the turnover of the traders who have rent contracts of commercial space, making it difficult for them to fulfill their contractual obligations and to pay the rental price.
I. Funding by the European Commission The European Commission has approved a public guarantee scheme of BGN 500 million (approximately EUR 255 million) in support of small and medium-sized enterprises in the context of the outbreak of the COVID-19 pandemic.
The problem The urgent situation created by the rapid spread of Coronavirus causes a significant impact not only on individuals and their freedoms, but also on companies that may find themselves in real difficulty and unable to fulfil their contractual obligations properly.
In the complicated situation caused by the diffusion of Coronavirus (Covid-19) and the changed economic conditions in Bulgaria and around the world, many commercial banks have taken measures to facilitate their customers. Part of the measures consist in facilitating banking, payment and other administrative services, and others in extending credit terms.
With the donation contract, the donor gives up immediately and gratuitously something to the donated person who accepts it. The corporate tax framework allows donors to ease their tax obligations by reducing the taxable amount of the donation.
These types of companies are not explicitly regulated by the Bulgarian legislation in force, but they still find their basis in the Obligations and Contracts Act (Art. 357 et seq.), In the Commercial Act (Art. 609), and in the Taxation Code (Art. 19, para. 8 ).
The purpose of this article is to examine the most specific features of the formation and nature of holding companies under Bulgarian law. This type of business education is regulated by the Commercial Law, the Corporate Income Tax Act, the Tax Insurance Procedure Code, the Credit Institutions Act, the Special Investment Purpose Companies Act, and some other subordinate legislation. The holding is like a consortium-like structure, but in difference of the consortium, in the holding there is one company (the parent – the holding company which holds or controls part of the capital and / or management of the other subsidiaries and for which the law provides for a specific activity).
The liquidation is one of the ways for termination of a limited liability company under Bulgarian law. The procedure is regulated by the Bulgarian Commercial Law (Articles 154-157, Articles 266-274), the Corporate Income Tax Act – Chapter 21, the Commercial Register Act – Art. 4, Art. 6, para. 2, the Tax and Social Insurance Procedure Code (Article 77), the Social Security Code (Article 5, paragraph 10) and some other subordinate legislation. The purpose of the liquidation procedure is to terminate the Ltd with its subsequent cancellation from the Commercial Register, and next the company ceases to be a legal entity and terminates its existence towards the state and third parties.
A joint-stock company (AD) is a type of trading company where two or more persons (natural or legal) merge for the purpose of conducting commercial transactions with common funds and their liability is limited to the amount of their contribution to the capital. AD is a capital trading company, the capital of which is divided into shares and may be owned by a number of persons with different percentages of capital and different rights under the Articles of Association. It is necessary for every person holding a share in the capital of the company to be able to protect their membership rights against unlawful or harmful actions by bodies of the company itself. Initially, each ordinary share in the capital of the company gives its holder two types of rights: 1. Material (right to dividend and right to liquidation share) and 2. Non-material (right to participate in the management through the general meeting, right to vote, right to information , the right to subscribe to new shares, etc.) It is possible to issue so-called preferred shares.
According to the Social Security Code, the basic costs of supplementary social insurance for persons employed under a contract of employment born after 1960 are […]
Until the latest amendments to the Commercial Law (SG 88/2018) came into force, the holding of bearer shares was allowed in Bulgaria. Their legal framework provided the possibility of transferring them with a simple transmission, which in turn allowed the holder to remain formally anonymous. With the amendment of the Commercial Law promulgated in the State Gazette. pcs. 88 of 23 October 2018, effective from the same date, the bearer shares issued (or temporary certificates thereof) are replaced by registered shares. Pursuant to § 11 of the LCP to the Commercial Law, within the 9-month period from 23.10.2018, i.e. until 23.07.2019, the companies that have issued bearer shares or temporary certificates, shall be obliged to:
The requirements for registration of a company or branch are set out in the Commercial Law, the Commercial Register Act and the implementing regulations. The registration procedure depends on the type of company to be registered, considering that the registration of a Joint Stock Company (JSC) (as well as a Limited Liability Company) currently takes approximately five working days from the filing of the relevant registration documents. It takes about two weeks for a branch of a foreign company. The registered company or branch becomes a legal entity from the date of its entry in the Commercial Register. The first phase of setting up a new company is to choose the type of company among the ones provided by the Bulgarian legislation, as well as to have clarity on the following specific elements of incorporation: