On 02.10.2024 a Draft Ordinance amending and supplementing Ordinance No. 1 of 2007 on the keeping, storage and access to the Commercial Register and the Register of Non-Profit Legal Entities (“Ordinance No. 1”) has been published on the Public Consultation Portal.

The main objective of the draft is to accelerate the already started process of digitalization of the Commercial Register and to provide additional practical convenience  for businesses.

Firstly, the procedure by which the contribution of the registered capital will have to be proved when a new company is established or when the capital of an existing company is increased will be significantly facilitated. Until now, registration officials required a written document with the bank's stamp as proof of this fact, which often created logistical difficulties for businesses - the need to communicate with bank officials and even visit the respective bank branch.

The proposed changes  lay down the possibility to prove the contribution to the share capital of companies online, i.e. to provide only an excerpt from the so-called “online banking”. The statement will have evidentiary value in registry proceedings, i.e. it will be presumed that this document (the excerpt) has been duly issued by the relevant payment service provider.

Furthermore, simplified templates of Articles of Association and Incorporation Act of limited liability companies/single-owned limited liability companies are envisaged, which represent separate enclosures to Ordinance No 1. These templates contain only the minimum content required by law of the constitutional documents in question, which does not obviate the need for professional legal assistance in order to reflect specific clauses and agreements between the shareholders.  

With the amendments to the Commercial Act, which we have reflected in our Legal Digest of 17.08.2023, the possibility for establishment of a new type of commercial company was envisaged - a company with variable capital (“VCC”), representing a hybrid between an LLC and a JSC. However, it is not yet technically possible to register such a company, as the digital platform of the Commercial Register lacks an application for the establishment of a VCC.

Earlier this year, a specific application for registration of circumstances concerning VCC was officially adopted as enclosure No. A19 to Ordinance No. 1, which will enter into force on 31 March 2025. Within the same term this application should be integrated in the Commercial Register’s digital platform.

The current draft proposes to amend slightly the form of this application. In particular, it is expressly provided that if a contribution in-kind (rights in rem, receivables or other rights other than cash) is made to the capital of VCC, a written consent of the contributor describing the subject of the in-kind contribution with notarization of his signature must be submitted. Thus, the regulation in this part will be identical to that in the case of LLCs and JSCs, where a declaration-consent is also required.

It is also foreseen to extend the scope of the information to be submitted through the system of interconnection of the registers of the Member States of the European Union concerning branches registered in another Member State. In other words, if a Bulgarian company has registered a branch abroad, the account of the Bulgarian company in the Commercial Register will automatically contain information about the branch.

In turn, the profiles of the branches of foreign traders registered in the Bulgarian Commercial Register will show information about the foreign entity which registered the branch, including details of its firm name, legal form, registration number, registered office, representation, management and control bodies, initiated liquidation and insolvency procedures, etc.

Undoubtedly, the continuous digitalization and modernization of the Commercial Register is an important process for the business environment and attracting new investors to the country, as if the proposed changes  become effective law as soon as possible this could only be seen as a positive.