Various reasons may lead you to the resolution that a going limited liability company in Bulgaria is necessary to be transformed into a joint-stock company. Improvement of the image of the company with regard to future financing/projects, provision of certain anonymity to the shareholders, bond issue, planned listing of the company on the Bulgarian stock exchange, etc., is just a short list of the likely reasons for a Bulgarian company to be transformed.
Bulgarian Company Transformation procedure:
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Preparation of a notarized transformation plan by the director(s) of the company
The main purpose of this plan is to outline the mechanism of the company transformation. In other words, it should provide information about the name and address of the joint-stock company, about the share exchange ratio (i.e. how much shares in the joint-stock company will obtain each shareholder in the limited liability company) as well as information about the terms and conditions for the handing-over of the shares in the Bulgarian joint-stock company. A draft of the statute of the joint-stock company to be formed after the transformation of the Bulgarian limited liability company should also be attached to the transformation plan.
The plan must be published with the Bulgarian Commercial Register at least 30 (thirty) days prior to the planned date of the general meeting of the shareholders in the limited liability company that is to be transformed at which the transformation will be discussed and put to a vote.
Preparation of such a plan is not required when the limited liability company is a solely owned limited liability company.
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Sending a notification to the National Revenue Agency (NRA)
The execution of the said transformation of a Bulgarian limited liability company or solely owned limited liability company requires a notification to the NRA of the planned reorganization which should be notified when transforming companies in Bulgaria. The NRA is expected to issue a certificate evidencing that it has been duly notified of the transformation within 60 (sixty) days as of filing the notification.
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Appointment of a registered auditor and preparation of a report for the transformation of the Bulgarian company
The main task of the auditor appointed by the manager(s) of the Bulgarian limited liability company due to be transformed is to prepare a report containing an assessment of the adequacy of the exchange ratio. The auditor is also required to check whether the share capital of the joint-stock company is supported by the relevant assets of the company.
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Adoption of a resolution for the company transformation
The next step of the transformation process is the adoption of a resolution by the general meeting of the shareholders in the Bulgarian limited liability company. The resolution is adopted only if the shareholders who own at least three-quarters of the share capital vote in favour of the transformation of the company into a joint stock company in Bulgaria. At this meeting should also be adopted the statute of the joint-stock company. Appointment of the managing bodies of the joint-stock company is also necessary.
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Handing-over of the issued interim share certificates/shares to the shareholders
After the adoption of the resolution for the transformation of the limited liability company / solely owned company, the managing body of the joint-stock company is required to appoint a depository. The depository is a natural or legal person to which the issued interim share certificates/shares are handed. The depository should hand them over to the shareholders of the joint-stock company within 2 (two) months as of registration of the transformation with the Commercial Register in Bulgaria.
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Registration of the transformation with the Bulgarian Commercial Register
The transformation is finalized with its registration with the Bulgarian Commercial Register. As of the date of this registration the transformed limited liability company is deemed wound up and the joint-stock company is deemed established. As a result, the shareholders in the limited liability company become shareholders in the joint-stock company and all the assets and liabilities of the limited liability company is transferred to the joint-stock company as a universal successor of the limited liability company.
