Commercial, Company and Accounting Law
Core Concepts
Legal framework for businesses in Bulgaria includes the Commercial Act, Accountancy Act, and Tax Procedure Code. Key areas:
- Company forms: sole trader, general partnership, limited partnership, limited liability company (OOD), joint-stock company (AD).
- Capital requirements: minimum capital for OOD is BGN 2, and for AD is BGN 50,000.
- Corporate governance: general meeting, management board, supervisory board.
- Accounting law: requirements for financial statements, filing with the Commercial Register, and audit obligations.
- Insolvency: grounds for insolvency, proceedings.
Common Traps
- OOD capital is divided into shares; AD capital is divided into shares but with different rules.
- Annual financial statements must be filed within 9 months after year-end (for most companies).
- Audit requirement: companies exceeding certain thresholds (e.g., total assets > BGN 4 million, revenue > BGN 8 million, average employees > 50) must be audited.
- Liability of managers for damages to the company.
Worked Example
A company has total assets of BGN 5 million, revenue of BGN 6 million, and 40 employees. It exceeds the asset threshold but not the revenue or employee thresholds. Under the Accountancy Act, it is subject to mandatory audit if it exceeds at least two of the three criteria. Here, it exceeds only one, so audit is not mandatory (unless it is a public interest entity). Rule of thumb: Check the three thresholds: assets, revenue, employees; at least two must be exceeded.