Partnership limited by shares in Bulgaria
According to the commercial law of Bulgaria, the Partnership limited by shares (Bulg. Kомандитно дружество, short: „КД“) is a company which is founded by two or more persons. These persons sign the articles of association which include the agreement of both parties to exert a business company under a common legal name. The liability of one or more members of the partnership towards the creditors of the company is limited to the amount of a specific capital contribution (limited partners in trust) whereas the liability of the other part of the partnership’s members is not limited (general partners). Unless otherwise provided for, the regulations concerning general partnerships (Article 99 Commercial Law of Bulgaria, Bulg. Търговски закон, short: „ТР“) are applied to the partnerships limited by shares.
Legal name of the partnership limited by shares
Following Article 101 (1) BHG, the legal name of the partnership limited by shares must include the term „Kомандитно дружество” or the easier abbreviation „КД“ as well as the name of at least one of the general partners.
In accordance with Article 101 (2) BHG, the legal name must not include the name of the limited partners in trust. If the name of a limited partner in trust appears in the legal name of the partnership, the limited partner in trust is seen as a general partner towards the creditors of the company.
Articles of association
Article 100 BHG provides the necessity of the notarisation when signing articles of association.
Constitutively, the articles of association include the following information:
- Legal name of the association;
- Place of business and address;
- Object of the association;
- The name resp. the legal name, the actual identification code of the members (EIK);
- The art and amount of contributions paid by the members of the association;
- How the gains and the losses will be divided among the partners;
- The manner of the business management and the substitution.
Registration in the commercial register
It is the general partner’s exclusive right and duty to manage the business and to represent the association. The limited partners in trust are excluded from these tasks and may not contradict the general partners.
Relations to third parties
If an authorised limited partner in trust closes a business deal in the name and for the account of the association, he is personally liable. This is not applicable if the association confirms the business deal closed by the limited partner in trust.
According to Article 107 BHG (in conjunction with Article 83 BHG), the general partner is prohibited to take part in competition.
The partnership limited by shares is subject to the corporate tax which takes 10 % of the gains of the association.
If dividends are paid to the members of the association, the paid amount of money is assessed with a withholding tax of 5%. If there are foreign associates, the respective conventions designed to prevent double taxation are to be respected.
Fees incurred when recording a partnership limited by shares in the commercial register of Bulgaria
- Registration of a new partnership limited by shares: 130 BGN
- Registration of a new partnership limited by shares in electronic form: 60 BGN