Share Transfer, Pre-emption and the Refusal to Register in the Commercial Register
OOD 'Alfa Stroy' has three partners: Marinov (40%), Georgieva (35%) and Trend EOOD (25%). The articles require that a partner wishing to transfer shares to a third party first offer them to the other partners at the price in a written offer, with a 30-day acceptance period. On 10 January Marinov offered his 40% to Georgieva and Trend at 80,000 BGN. Neither accepted within 30 days. On 20 February Marinov sold the 40% to an outside buyer, Petkov, at 60,000 BGN. The company refused to enter Petkov in the commercial register, citing breach of pre-emption. Petkov paid and received a notarised declaration of transfer. Georgieva now claims the transfer is void and wants to buy at 60,000 BGN.
1. Was the pre-emption right validly exercised or breached, and what is the effect of the sale at a lower price than the offer?
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Nature of the right. A contractual pre-emption clause in the articles binds the partners inter se; it does not by itself make a transfer to a third party void as against the world. The sanction is typically a claim for damages or, where the articles so provide, a right to step into the transaction on the same terms.
Was it breached? Marinov made a written offer at 80,000 BGN with a 30-day period. Neither Georgieva nor Trend accepted within that period. The offer therefore lapsed. A later sale at 60,000 BGN is a new transaction on different terms. Whether the pre-emption right revives depends on the clause: if it requires a fresh offer whenever the price or terms change, Marinov breached it by not re-offering at 60,000 BGN. If the clause is satisfied by one offer, no breach occurred.
Effect on validity. Even on breach, the transfer to Petkov is generally valid between the parties; the company cannot simply refuse registration on that ground unless the law or articles make the transfer conditional. The proper remedy is a claim by the aggrieved partner, not automatic voidness.
Georgieva's claim. She can claim to purchase on the terms actually agreed (60,000 BGN) only if the articles confer that right and she acts promptly. Her failure to accept the 80,000 BGN offer weakens but does not extinguish a fresh right triggered by the changed price.
2. Can the company refuse to register Petkov in the commercial register, and what should the court do if Petkov applies to compel registration?
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Registration duty. Entry in the commercial register is declaratory for the transfer but the company must apply for registration of the new partner once it has a valid transfer. Refusal is justified only on a legal ground: e.g. the transfer instrument is defective, the shares are not fully paid, or a statutory/contractual condition precedent is unmet.
Review of the refusal. The court examines whether the articles make pre-emption a condition of the transfer's effectiveness. If they do not, breach of pre-emption is a matter between partners and cannot be raised by the company to block registration. If they do, the company must show the condition failed.
Notarised declaration. A notarised declaration of transfer satisfies the form requirement; the company cannot demand more than the law requires.
Outcome. If the transfer is valid and the form is correct, the court should compel the company to file for registration and, if necessary, order entry. Georgieva's remedy lies in a separate claim for damages or for transfer on the actual terms, not in blocking Petkov's registration. The court should also consider whether the company's refusal caused damage to Petkov.