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Updated last 26.03.2021

What is a company share?

In a limited liability companies (OOD) each shareholder has a share in company's property and such share is referred to as a company share. The amount of the company share is usually based on the shareholder's share in company's capital, but it is possible to agree otherwise in the articles of association (art. 127 of the Commercial Act (CA)). Shareholders' shares cannot amount to less than BGN 1, and their precise amount is specified in the articles of association. Thus, when the company has a capital of BGN 50, it may be divided into two shares of BGN 25 each, into 10 company shares of 5 BGN each, etc., so long as the total amount of the shares is equal to company's capital.

• The shares of the individual shareholders may be of different value – e.g. one shareholder may own one share, amounting to BGN 25, while the five other shareholders have shares of BGN 5 each.
• Each shareholder is obliged to repay or deposit their share, as the methods and rules applicable to that, are regulated by the articles of association. In case of transfer of a company share, which has not been deposited/repaid, the new owner will be jointly responsible with the former owner, for the payment of the contributions to company’s capital, due as at the moment of transfer.
• Shareholders may not request the refunding of their share in company’s property, while the company still exists.
• The company share entitles its shareholder to receive a part of the profit pro-rata to their share, unless agreed otherwise (art. 133 of the CA).

How are company's shares transferred?

The company share may be transferred by means of a contract (sale, donation, etc.), and the contract is required by law to be signed before a notary - with notarized signatures and contents, where both notarizations are to take place at the same time (art. 129, para. 2 of the CA).

The shareholder may sell all his shares or a part thereof to some of the other shareholders or to third parties (persons, who are not shareholders of the company). When a shareholder transfers all his shares, his participation in the company is discontinued.

Important to know
	It is important to note that when selling the company share, the shareholder may request a price, different from the nominal value of the share in company's capital. For example, a company share with a nominal value of BGN 25 may be sold for BGN 5 (e.g. when the company suffers losses) or for BGN 50 (when the company generates profits and the company share ensures benefits to its owner).

When company shares are transferred to third parties, the law makes provisions for additional requirements, protecting the interests of the company and the new owner of the company share:

• the company must not have any outstanding payable salaries, compensations and compulsory social security contributions for workers and employees, including workers and employees with employment legal relations discontinued within the previous three years before the transfer of the company share.
• All the requirements for the acceptance of a new shareholder must be met. This means that the third person must submit a written application to the general assembly, stating that he accepts the terms and conditions of the articles of association, and after that the general assembly makes a decision, giving Company’s consent to the share transfer and a new shareholder is admitted. The decision is made by the majority of the owners of more than ¾ of company's capital, and it is necessary to prepare minutes with notarized signatures and contents, where both notarizations are to take place at the same time, unless written form is provided for in the articles of association (art. 137, para. 4 of the CA).

The transfer of the company share must be registered with the Commercial Register (art. 129 of the CA). The registration is based on an application by company's general manager based on Template А4. The application may be submitted online using a qualified electronic signature, as the payable state fee in this case is lower in this case. The application is to be accompanied by the following documents:

• Copy of the notarized contract for the transfer of the company share.
• Articles of association, reflecting the share transfer;
• A document, evidencing the state fee paid (the state fee amounts to BGN 30, when the application is submitted in printed form on-site at the Registry Agency and to BGN 15, when submitted electronically.

When the company share is transferred to a third person, apart from the aforesaid documents, the following additional documents are to be submitted:

• Third person's application to the general assembly, stating that he accepts the terms and conditions of the articles of association;
• Copy of the notarized minutes of the general assembly, giving Company's consent to the Company share transfer to a new member;
• A declaration on the absence of outstanding payable salaries, compensations and compulsory social security contributions to the workers and employees, including workers and employees, the employment legal relations, with whom have been discontinued within the previous three years before the transfer of the company share (a declaration as per art. 129, para. 2 related to art. 129, para. 1 of the CA). It should be noted that declaring false data may give rise to criminal prosecution in conformity with the provisions of the Criminal Code.

For more information
	For more information on the transfer of company shares and the related regulatory framework please refer to the website of the: Registry Agency; Commercial Register and Register of the Non-Profit Legal Entities.