BULGARIAN COMMERCIAL LAW.

In force since 01.07.1991 Reflected the denomination of 05.07.1999.

Obn. SG 48 of 18 June 1991, amend. SG 25 of 27 March 1992, amend. SG 61 of 16 July 1993, amend. SG 103 of 7 December 1993, suppl. SG 63 of 5 August 1994, amend. SG 63 of 14 July 1995, amend. SG 42 of 15 May 1996, amend. SG 59 of 12 July 1996, amend. SG 83of 1 October 1996, amend. SG 86 of 11 October 1996, amend. SG 104 of 6 December 1996, amend. SG 58 of 21 July 1997, amend. SG 100 of 31 October 1997, amend. SG 124of 23 December 1997, suppl. SG 39 of 7 April 1998, suppl. SG 52 of 8 May 1998, amend. SG 70 of 19 June 1998, amend. SG 33 of 9 April 1999, suppl. SG 42 of 5 May 1999, amend. SG 64 of 16 July 1999, amend. SG 81 of 14 September 1999, amend. SG 90 of 15 October 1999, amend. SG 103 of 30 November 1999, amend. SG 114 of 30 December 1999, amend. SG 84 of 13 October 2000, amend. SG 28 of 19 March 2002, amend. SG 61 of 21 June 2002, suppl. SG 96 of 11 October 2002, amend. SG 19 of 28 February 2003, amend. SG 31 of 4 April 2003, amend. SG 58 of 27 June 2003, amend. SG 31 of 8 April 2005, amend. SG 39/10 May 2005, amend. SG 42 of 17 May 2005, amend. SG 43 of 20 May 2005, amend. SG 66of 12 August 2005, amend. SG 103 of 23 December 2005, amend. SG 105 of 29 December 2005, amend. SG 38 of 9 May 2006, amend. SG 59 of 21 July 2006, amend. SG 80 of 3 October 2006, amend. SG 105 of 22 December 2006, amend. SG 59 of 20 July 2007, amend. SG 92 of 13 November 2007, amend. SG 104 of 11 December 2007, amend. SG 50 of 30 May 2008, amend. SG 67 of 29 July 2008, amend. SG 70 of 8 August 2008, amend. SG 100 of 21 November 2008, amend. SG 108 of 19 December 2008, amend. SG 12 of 13 February 2009, amend. SG 23 of 27 March 2009, amend. 28 April 2009, amend. SG 47 of 23 June 2009, amend. SG 82 of 16 October 2009, amend. SG 41 of 1 June 2010, amend. SG 101 of 28 December 2010, amend. SG 14 of 15 February 2011, amend. SG 18 of 1 March 2011, amend. SG 34 of 29 April 2011, amend. SG 53 of 13 July 2012, amend. SG 60 of 7 August 2012, suppl. SG 15 of 15 February 2013, amend. and suppl. SG 20 of 28 February 2013, amend. 27of 25 March 2014, suppl. 22 of 24 March 2015, amend. and suppl. SG 95 of 8 December 2015, amend. SG No. 13 of 16 February 2016, amend. and supplemented by Dz. SG No. 105 of 30 December 2016, amend. and supplemented by Dz. SG 62 of 1 August 2017, am. and suppl. SG 102 of 22 December 2017, am. and suppl. 15of 16 February 2018, suppl. 27 of 27 March 2018, amend. SG 88 of 23 October 2018.



Part one.
GENERAL

Chapter one.
GENERAL


MERCHANT

Art. 1. (1) (amend. - SG No. 83/1996) A trader within the meaning of this Law shall be any natural or legal person who, by profession, carries out any of the following transactions:

1. the purchase of goods or other things with a view to their resale in their original, processed or processed form;

2. (amend. - SG 83/1996) sale of goods of own production;

3. (amended, SG No. 83/1996) purchase of securities with a view to selling them;

4. (amend. - SG 83/1996) commercial representation and intermediation;

5. (amended, SG No 83/1996) commission, forwarding and transport transactions;

6. (amend. - SG 83/1996) insurance transactions;

7. (amended, SG No 83/1996) banking and foreign exchange transactions;

8. (amended, SG No 83/1996) bills of exchange, promissory notes and cheques;

9. (amended, SG No 83/1996) warehouse transactions;

10. (amended, SG No 83/1996) licensing transactions;

11. (new - SG 83/1996) commodity control;

12. (new - SG 83/1996) intellectual property transactions;

13. (new - SG 83/1996) hotel, tourist, advertising, information, programme, impresario or other services;

14. (new - SG 83/1996) purchase, construction or furnishing of immovable property for the purpose of sale;

15. (new - SG 83/1996) leasing.

(2) Traders shall be:

1. trading companies;

2. cooperatives, except housing cooperatives.

(3) A trader shall also be deemed to be any person who has formed an enterprise which, by its object and scope, requires its affairs to be conducted in a commercial manner, even if its activities are not referred to in par. 1.







PERSONS WHO ARE NOT TRADERS



Art. 2. Shall not be deemed to be traders:

1. natural persons engaged in agricultural activities;

2. craftsmen, persons performing services by personal labour or exercising a liberal profession, unless their activity can be defined as an enterprise within the meaning of Art. 1, par. 3;

3. persons providing hotel services by providing rooms in the dwellings they occupy.


Chapter Two.
COMMERCIAL REGISTER (AMEND. - SG 38/06, IN FORCE FROM 01.07.2007, AMEND. ON ENTRY INTO FORCE - JOURNAL OF LAWS NO 80/2006)





KEEPING OF THE COMMERCIAL REGISTER

Art. 3. (Suppl. - SG 66/05, amend. - SG 38/06, in force as from 01.07.2007, amend. concerning the entry into force - SG 80/06)







OBLIGATION TO REGISTER

Art. 4. - SG 66/05, amend. - SG 38/06, in force from 01.07.2007, amend. as regards entry into force - SG 80/06)







EFFECT OF THE ENTRY

Art. 4a. (new - SG 84/00, amend. - SG 38/06, in force as from 01.07.2007, amend. concerning the entry into force - SG 80/06)







PUBLICITY OF THE COMMERCIAL REGISTER

Art. 5. - SG 38/06, in force as from 01.07.2007, amend. concerning the entry into force - SG 80/06)







PROMULGATION OF THE ENTRY

Art. 6. - SG 38/06, in force as from 01.07.2007, amend. concerning the entry into force - SG 80/06)



Chapter Three.
BUSINESS NAME AND REGISTERED OFFICE





DEFINITION

Art. 7. (1) A company is the name under which a trader carries on his trade and signs his name.

(2) (Amended, SG No. 103/1993) Every company name may include, in addition to the necessary contents prescribed by law, an indication of the subject matter of the business, the persons involved and a freely chosen supplement. The name must be truthful, not misleading and not prejudicial to public order and morals.

(3) (New, SG No. 103/1993) The trader shall compulsorily write his company name in Bulgarian. He may additionally write it in a foreign language.

(4) (New, SG No. 34/2011, in force as from 03.05.2011) Every trader shall have the right to bring an action to establish the unfair registration or use of a company name, to stop the unfair use of a company name and for damages where the company name is identical or similar to a previously registered company name.

(5) (new, SG 34/2011, in force from 03.05.2011) The firm may not be identical or similar to a protected mark unless the trader has rights to it.







COMPANY AND CLONE

Art. 8. The name of the branch shall include the name of the trader and the suffix "branch".







COMPANY IN LIQUIDATION

Art. 9. (suppl. - SG 63/1994) In the event of the liquidation of the trader, the company name shall contain the addendum "in liquidation", and in the event of bankruptcy - "in bankruptcy".







CHANGE OF COMPANY

Art. 10. (1) The company may be changed at the request of the trader who registered it.

(2) Where the firm contains the name of a retiring partner, it may be retained only with his consent.



EXCLUSIVE RIGHT

Art. 11. (1) A firm name may be used only by the trader who registered it.

(2) In the event of the use of another's company, the persons concerned may demand the termination of its further use and compensation for damages.



REGISTERED OFFICE AND ADDRESS

Art. 12. (1) The registered office of a trader shall be the locality where the management of his business is situated.

(2) The address of the trader shall be the address of the management of his business.



OBLIGATION TO PROVIDE PARTICULARS

Art. 13. (1) (Former text of Art. 13 - SG 84/00, suppl. - SG 66/05, amended and supplemented by art. - SG 38/06, in force from 01.07.2007, amended as regards the entry into force - SG 80/06) The trader shall be obliged to indicate in his commercial correspondence and in his Internet page, if any: the company name; the registered office and the address of the management; the unique identification code and the bank account. The trader may also indicate a communication address. Where a trading company indicates the amount of its capital, it shall also indicate what proportion of it is paid up.

(2) (new - SG 84/00, amend. - SG 38/06, in force as from 01.07.2007, amend. on entry into force - SG 80/06) The business correspondence of the branch shall indicate the details of the trader referred to in par. 1.



CHANGE OF REGISTERED OFFICE

Art. 14. (amend. - SG 58/03) (1) (amend. - (1) (SG 38/06, in force as of 01.07.2007, amend. concerning the entry into force - SG 80/06) The transfer of the management of the activity of the trader to another locality shall be applied for registration in the Commercial Register.

(2) (Rev. - SG 38/06, in force as of 01.07.2007, amend. on entry into force - SG 80/06)

(3) (Amended, repealed and supplemented as from 31.12.2007, Art. - SG 38/06, in force as from 01.07.2007, amended as regards entry into force - SG 80/06)

(4) (Amended, repealed and supplemented by repealing Article 2(2)(a) of Regulation (EC) No ... - SG 38/06, in force as from 01.07.2007, amended as regards entry into force - SG 80/06)



Chapter Four.
UNDERTAKINGS AND TRANSACTIONS THEREIN

ENTERPRISE TRANSACTIONS

Art. 15. (1) (amend. - SG 105/2016) The enterprise as a set of rights, obligations and factual relations may be transferred by a transaction executed in writing with notarial certification of the signatures and the content executed simultaneously. The transferor shall be obliged to notify the creditors and debtors of the transfer.

(2) (New, SG No. 58/2003) Where the entire undertaking of a trading company is transferred, the transfer shall be subject to a resolution adopted pursuant to Article 262p.

(3) (former paragraph 2, supplemented, State Gazette No. 58/2003) In the event of a transfer of an undertaking, if there is no other agreement with the creditors, the alienator shall be jointly and severally liable with the transferee for the obligations up to the amount of the rights received. Creditors of enforceable debts shall be obliged to apply first to the alienator of the undertaking.

(4) (New, SG No. 102/2017, in force as of 22.12.2017) An enterprise which employs workers or employees may be transferred after the alienator has paid the wages, benefits and compulsory social security contributions due but unpaid to the workers and employees, including the workers and employees whose employment relationships were terminated up to three years before the transfer of the enterprise.

(5) (new - SG 102/07, in force from 22.12.2017) If the parties expressly agree, the enterprise may be transferred also if the transferee fulfils the obligations under paragraph 4.



ENTRY

Art. 16. (1) (amend. - 1. - 38 of 2006, in force as of 01.07.2007, amend. concerning the entry into force - SG 80 of 2006) The transfer of an enterprise shall be entered in the commercial register simultaneously in the file of the alienator and of the transferee.

(2) (new - SG 58/03, amend. - SG 38/06, in force as of 01.07.2007, amend. on entry into force - SG 80/06, new - SG 15/2018, in force as of 16.02.2018) The entry shall be made after the alienator has submitted a declaration in a form that there are no due and unpaid obligations under Article 15, paragraph 4. The Registry Agency shall immediately notify the Executive Agency "General Labour Inspectorate" of the submitted declaration. The procedure for notification shall be determined jointly by the Executive Director of the Executive Agency "General Labour Inspectorate" and the Executive Director of the Registry Agency.

(3) (new - SG 58/03, amend. - SG 38/06, in force as of 01.07.2007, amended on entry into force - SG 80/06, new - SG 15/2018, in force as of 16.02.2018) The Executive Agency "General Labour Inspectorate" shall, upon a signal or on its own initiative, carry out a verification of the veracity of the declared facts in accordance with the procedure determined by the Executive Director. In the event of a discrepancy between the declared and established facts, the Executive Agency "General Labour Inspectorate" shall send the results of the verification to the prosecution authorities.

(4) (New, SG 15/2018, in force from 16.02.2018) The model of the declaration under paragraph 2 shall be approved by the Minister of Justice and the Minister of Labour and Social Policy.

(5) (amend. - (5) (SG 104/1996, former para. 2 - SG 58/2003, former para. 4 - SG 15/2018, in force from 16.02.2018) Where the contract transfers immovable property or a right in rem over such property, the contract shall also be registered with the registry office.



SECURITY FOR CREDITORS

Art. 16а. (New, SG 42/1999, amend., SG 58/2003) (1) (Amended, supplemented and supplemented, in force from 01.01.1999). - (1) (1) (1) (1) (1) (1) (1) (1) (1) (1) (1) (1) (1) (in force from 01.07.2007, State Gazette, issue 38 of 2006, in force from 01.07.2007, amended on entry into force - State Gazette, issue 80 of 2006) The successor shall manage separately the commercial enterprise transferred to him for a period of 6 months from the registration of the transfer.

(2) (amend. - 38 of 2006, in force as of 01.07.2007, amend. on entry into force - SG 80/06) Within the period referred to in par. 1, any creditor of the alienator or assignee whose claim is unsecured and arose before the date of registration of the transfer may apply for enforcement or security in accordance with his rights. If the request is not granted, the creditor shall be entitled to preferential satisfaction of the rights which belonged to his debtor.

(3) The members of the management body of the transferee shall be jointly and severally liable to the creditors for the separate management.

Chapter Five.

CLONES

 

 

 

 

 

CLONE

 

Art. 17. (1) Every trader may establish a branch office outside the locality where his registered office is situated.

 

(2) (Am. - 58 of 2003, amend. - 38 of 2006, in force as of 01.07.2007, amend. on entry into force - SG 80 of 2006) The branch shall be entered in the Commercial Register on the basis of a written application which shall contain:

 

1. the registered office and the subject of activity of the branch;

 

2. particulars of the person who manages the branch and the extent of his representative authority.

 

(3) (amend. - SG 58/03) The application referred to in paragraph 2 shall be accompanied by a notarised consent with a specimen of the signature of the person managing the branch.

 

(4) (amend. - SG 58/03, suppl. - SG 66/05, amend. - SG 38/06, in force as from 01.07.2007, amended as regards entry into force - SG 80/06)

 

(5) (amend. - SG 58/03, amend. - SG 38/06, in force as from 01.07.2007, amended as regards entry into force - SG 80/06)

 

(6) (new - SG 58/03, amend. - SG 38/06, in force as from 01.07.2007, amend. as regards entry into force - SG 80/06)

 

(7) (new - SG 58/03, amend. - SG 66/05)

 

 

 

 

 

A BRANCH OF A FOREIGN PERSON

 

Art. 17а. (1) (amend. - (1) (SG 38/06, in force as from 01.07.2007, amend. as regards entry into force - SG 80/06) A branch of a foreign person registered with the right to carry out commercial activity according to its national law shall be entered in the commercial register.

 

(2) In addition to the particulars referred to in Article 17(2), the application for registration shall contain particulars of:

 

1. the legal form and the company or name of the foreign person, as well as the name of the branch, if it differs from that of the foreign person;

 

2. the register and number under which the foreign person is registered, if the applicable law so provides;

 

3. the law of the country which applies to the foreign person if it is not the law of a Member State of the European Union;

 

4. the persons who represent the foreign person according to the register in which it is entered, if there is such a register, the manner of representation and the liquidators and receivers and their powers.

 

(3) The following particulars shall be entered in the register:

 

1. under subsection (2) and any change in them, including the closure of the branch;

 

2. the dissolution of the foreign person, the commencement of liquidation, the continuation of the business, the termination and the completion of liquidation;

 

3. of all acts of the bankruptcy court which are entered in the register in which the foreign person is entered, as well as the decisions referred to in Article 759, par. 1 and art. 760, par. 3, if any;

 

4. for the deletion of the foreign person.

 

(4) A copy of:

 

1. the articles of incorporation, memorandum or articles of association of the foreign person, which shall contain all amendments and supplements, including after the registration of the branch;

 

2. any annual financial statement of the foreign person after it has been registered or submitted in accordance with the law of the country where it is registered.

 

(5) (new - SG 22/2015, in force from 24.03.2015) The registration of the data referred to in par. 3, items 2, 3 and 4 may also be made ex officio on the basis of a notification from the register of another Member State of the European Union in which the foreign person is registered, received through the system for interconnection of the registers of the Member States.

 

(6) (new - SG 22/15), in force from 24.03.2015. ) In the event that the foreign person is deleted from the register of the other Member State in which it was entered and the deletion is not the result of a change in its legal form, a merger or division or a cross-border transfer of its registered office, the branch shall be deleted ex officio on the basis of the notification from the register of the other Member State received through the system of interconnection of registers, provided that no application for registration of the closure of the branch has been made at the time of receipt of the notification by the foreign person.

 

 

 

RELOCATION OF A BRANCH

 

Art. 18. The rules applicable to a trader shall apply mutatis mutandis in respect of the registered office and the address of the branch and its transfer.

 

 

 

TRADING BOOKS OF A BRANCH

 

Art. 19. A branch shall keep business books as an independent trader without drawing up a separate balance sheet. Branches of legal persons which are not traders within the meaning of this Law and branches of foreign persons shall also draw up a balance sheet.

 

 

PUBLICITY

 

Art. 20. In disputes arising out of a direct relationship with a branch, actions may be brought against the trader and at the registered office of the branch.

 

 

 

Chapter Six.

COMMERCIAL REPRESENTATION

 

Section I.

COMMERCIAL AGENTS

 

PROCURATOR (COMMERCIAL MANAGER)

 

Art. 21. (1) (amend. - SG 70/98) A proxy shall be a natural person entrusted and authorised by a trader to manage his undertaking for remuneration. The authorisation may be given to more than one person for separate or joint exercise. The authorization of the procurator (procurator) must be signed by a notary and must be declared by the trader for entry in the commercial register together with a specimen of the signature of the procurator.

 

(2) The procurator shall sign by adding his name to the company name and an addendum indicating the procuration.

 

(3) (New, SG No. 14/2011, in force from 15.02.2011) A person who has been declared bankrupt, as well as a person who has been a manager, a member of a management or control body of a company dissolved due to bankruptcy during the last two years preceding the date of the decision declaring the bankruptcy may not be a procurator if there are unsatisfied creditors.

 

POWERS OF THE PROCURATOR

 

Art. 22. (1) The procurator shall have the right to perform all acts and transactions which are related to the exercise of the trade, to represent the trader, to authorize other persons to perform certain acts. He may not authorize another with his rights under the law.

 

(2) A procurator shall not alienate or encumber immovable property of the trader unless he is specifically authorised. The authorization may be limited to the activities of an individual branch. Other restrictions shall have no effect in relation to third parties.

 

 

 

RELATIONS BETWEEN THE TRADER AND THE PROCURATOR

 

Art. 23. The relationship between the trader and the procurator shall be governed by a contract.

 

 

 

EFFECT OF THE AUTHORISATION IN RELATION TO THIRD PARTIES

 

Art. 24. The authorisation shall have effect vis-à-vis third parties after entry in the commercial register.

 

TERMINATION OF THE AUTHORISATION OF THE PROCURATOR

 

Art. 25. (1) The authorisation shall be terminated upon its withdrawal by the trader and the entry of the withdrawal in the commercial register.

 

(2) The authorisation shall not be terminated by the death or placing under disability of the trader.

 

 

 

 

 

COMMERCIAL AGENT

 

Art. 26. (1) A commercial attorney is a person authorised by a trader to perform the acts specified in the power of attorney for a consideration. In the absence of other instructions, the attorney shall be deemed to be authorised to perform all acts relating to the ordinary business of the trader. The authorization shall be in writing with a notarized signature.

 

(2) For the alienation or encumbrance of immovable property, for the assumption of promissory notes, for the taking out of loans and for the conduct of proceedings, the commercial agent must be expressly authorised. Other limitations on the power of attorney may be opposed by a third party only if the third party knew or should have known.

 

(3) A commercial agent may not, without the consent of the trader, transfer his rights to another.

 

(4) A commercial attorney shall sign his name by adding to the firm name and an endorsement that he is an attorney.

 

 

 

RELATIONS BETWEEN THE TRADER AND THE ATTORNEY

 

Art. 27. The relations between the trader and the agent shall be governed by contract.

 

 

 

 

 

TERMINATION OF THE COMMERCIAL POWER OF ATTORNEY

 

Art. 28. The power of attorney of the commercial agent shall be terminated in accordance with the provisions of civil law.

 

 

 

 

 

LIMITATIONS AND LIABILITY

 

Art. 29. (1) The attorney and the commercial agent may not, without the consent of the trader, enter into commercial transactions for his own or for another's account within the limits of the authorisation. Consent shall be deemed to have been given if the trader, at the time of the authorisation, knew of the carrying on of such business and its termination was not expressly agreed.

 

(2) In the event of a breach under the preceding paragraph, the trader may claim compensation or claim that the transactions entered into by the authorised persons were entered into on his own account. The claim shall be made in writing within 1 month after the knowledge of the transaction, but not more than 1 year after its execution, and shall be addressed to the procurator or commercial agent and to the third party.

 

(3) A claim under subsection (2) shall be time-barred within 5 years of the transactions.

 

 

 

 

 

COMMERCIAL ASSISTANT

 

Art. 30. (1) The relationship between the trader and the commercial assistant shall be governed by a contract.

 

(2) The commercial assistant may not carry out transactions on behalf of the trader. Where the sales assistant works in a place of business open to the public, he shall be deemed to be empowered to carry out the transactions normally carried out there.

 

 

RESTRICTIONS

 

Art. 31. A sales assistant may not carry on a business independently or on behalf of others in competition with his employer except with his express consent.

 

 

 

Section II.

SALES REPRESENTATIVE

 

 

 

DEFINITION

 

Art. 32. (1) A commercial representative shall be a person who independently and by profession cooperates with another trader in the performance of his commercial activity. He may be authorised to carry out transactions on behalf of the trader or on his own behalf on his own account.

 

(2) (suppl. - SG 38/06) The contract between the trader and the commercial agent shall be concluded in writing. The trader may not invoke against the commercial agent any stipulations deviating from the provisions of Articles 33, 34, 36(4) and (5) and 40 to the detriment of the agent.

 

 

 

OBLIGATIONS OF THE SALES REPRESENTATIVE

 

Art. 33. (1) (amend. - (1) (SG No. 83/1996, former text of Art. 33 - SG No. 38/2006) The commercial representative shall be obliged to carry out the cooperation or performance of the transactions with the care of a good trader, taking into account the interests of the trader. He shall immediately notify the trader of any transaction carried out.

 

(2) (new, SG No 38/2006) The commercial representative shall comply with the instructions of the trader and shall provide him with all information at his disposal in connection with his business.

 

 

 

 

 

 

 

OBLIGATIONS OF THE TRADER

 

Art. 34. (1) (amend. - SG 38/06) The trader shall be obliged to provide the sales representative with the necessary information and documents for the conclusion and execution of the assigned transactions.

 

(2) (suppl. - SG 38/06) The trader shall be obliged to inform the sales representative immediately whether he accepts the transaction concluded without representative authority, as well as whether he has concluded a transaction prepared by him.

 

(3) (new - SG 38/06) The trader shall provide the sales representative with the information necessary for the performance of his business, including a possible significant reduction in the volume of transactions concluded compared to that expected.

 

REMUNERATION IN DELCREDERE CONTRACTS

 

Art. 35. Where the sales representative undertakes to be personally liable for the performance of the obligations under the transactions concluded, he shall also be entitled to a separate remuneration, which shall be agreed in writing. The parties may not agree in advance that no such remuneration shall be payable.

 

 

 

RIGHT TO REMUNERATION

 

Art. 36. (1) (Amended and supplemented, SG No. 38/2006) The trader's representative shall be entitled to remuneration for all transactions carried out by him, with his cooperation or with clients whom he has solicited for the conclusion of the relevant type of transactions during the period of his contract with the trader. Remuneration shall also be payable for transactions which have been prepared but not concluded, unless this is due to a cause which cannot be attributed to the trader.

 

(2) Where a sales representative has been granted a particular area or clientele, he shall also be entitled to remuneration for transactions which are not carried out with his assistance but are carried out with persons from the same area or clientele.

 

(3) The sales representative shall be entitled to remuneration for the claims of the trader collected by him.

 

(4) (New, SG No. 38/2006) The trader shall provide the commercial representative with the information necessary for the calculation of the remuneration due not later than the time limit referred to in Article 38.

 

(5) (former paragraph 4, supplemented, SG No. 38/2006) Either party may request from the opposite party extracts from the books of business concerning the transactions carried out under the commercial agency contract, including those necessary for verification of the remuneration determined.

 

 

 

AMOUNT OF THE REMUNERATION

 

Art. 37. (suppl. - SG 38/06) Where the amount of the remuneration is not agreed, it shall be deemed to be equal to the usual amount for this type of activity. If the usual amount cannot be ascertained, the remuneration shall be determined by the court in equity.

 

 

 

 

 

TIME LIMIT FOR PAYMENT OF THE REMUNERATION

 

Art. 38. (Amended, SG 38/06) The remuneration of the commercial representative shall be paid monthly. The contract may stipulate another period for payment of the remuneration, but not longer than the end of the month following the quarter during which the relevant transaction was concluded or should have been concluded.

 

 

 

 

 

COMPENSATION FOR ORDINARY EXPENSES

 

Art. 39. The commercial agent shall be entitled to compensation for the ordinary expenses of his business, unless otherwise provided in the contract.

 

COMPENSATION AND REMUNERATION UPON TERMINATION (AMENDED, SG NO 38/2006)

 

Art. 40. (amend. - SG 38/06) (1) The sales representative shall be entitled to a lump-sum compensation upon termination of the contract, respectively his heirs - upon his death, if the trader continues to benefit from the clientele when it was created by the sales representative or the latter has significantly increased the volume of transactions concluded with it. Entitlement to such compensation shall be assessed in the light of all the circumstances, including the existence or absence of restrictive covenants.

 

(2) The compensation shall be equal to the annual remuneration of the sales representative calculated on the basis of the average remuneration over the entire period of the contract, but not exceeding the last 5 years.

 

(3) Compensation under paragraph (2) may not be claimed where:

 

1. more than one year has elapsed since the termination of the contract without the sales representative having notified the trader in writing that he is claiming the compensation due;

 

2. the contract has been terminated through the fault of the sales representative or has been terminated unilaterally by the sales representative pursuant to Art. 47 par. 1 or 2, unless this is due to his permanent disability or age;

 

3. the sales representative has transferred the relationship to another person, including with the consent of the trader.

 

(4) Upon termination of the contract, the sales representative may claim remuneration for contracts already concluded or prepared by him for conclusion.

 

(5) The commercial agent shall not be entitled to remuneration under Article 36 where, pursuant to paragraph (4), it is due to a previous commercial agent, unless in the circumstances the remuneration is to be shared between the two.

 

 

 

LIMITATIONS AFTER TERMINATION

 

Art. 41. (1) Restrictions on the activities of the sales representative after termination of the contract shall be agreed in writing.

 

(2) The restriction must cover the same area and type of goods or services as the subject of the commercial agency contract. It may not be for more than 2 years from the termination of the contract. For the period of the restriction, the trader shall pay appropriate compensation.

 

(3) If the sales representative terminates the contract due to the fault of the trader, he may, by written statement within 1 month of the termination, exempt himself from this restriction.

 

 

 

 

 

EFFECT OF THE RESTRICTION

 

Art. 42. The commercial agent may, even where he is not authorised to conclude contracts, accept the performance of acts by third parties whereby they reserve their rights against bad performance by the trader. The commercial agent may carry out acts to secure evidence on behalf of the trader. The restriction of these rights shall only have effect for third parties if they knew or should have known of the restriction.

 

 

 

CONFIRMATION OF THE CONTRACT

 

Art. 43. If the commercial agent enters into a contract without being authorised to do so and the third party was not aware of it, the contract shall be deemed to have been confirmed by the trader if he does not reject it immediately after being informed of it by the commercial agent or by the third party by giving them notice thereof.

 

 

 

PROHIBITION ON REPRESENTING COMPETITORS

 

Art. 44. The commercial agent may represent different traders only if they are not in competition with each other. He may agree with the trader to be his representative only.

 

 

 

 

 

SCOPE OF THE REPRESENTATIVE POWER

 

Art. 45. The contract of commercial representation shall determine the subject-matter and the area of activity of the commercial representative.

 

 

 

 

 

RELATIONSHIP BETWEEN TRADER AND COMMERCIAL AGENT

 

Art. 46. (1) The internal relations between the commercial representative and the trader shall be governed by their contract. In the absence of any other agreement, the sales representative shall furnish his own working premises. If no remuneration is specified in the contract, the usual remuneration for this type of representation shall be due.

 

(2) A representation under the preceding paragraph may not be assigned to another person in the same area.

 

(3) The commercial representative shall be obliged to note in the documents he issues and in his commercial correspondence the particulars referred to in Article 13.

 

TERMINATION OF COMMERCIAL REPRESENTATION

 

Art. 47. (1) (New, SG No. 103/1993, amended, SG No. 38/2006) Where the contract of commercial representation is concluded without a fixed term, during the first year from its conclusion either party may terminate it by giving one month's notice, during the second year - by giving two months' notice, and after the second year - by giving three months' notice, provided that the parties may not agree on shorter terms. Where a longer notice period is agreed, it must be the same for both parties. Unless otherwise agreed, termination of the contract shall take effect from the end of the calendar month in which the period of notice expired.

 

(2) (New, SG No. 103/1993) A contract concluded for a fixed term may be terminated before its expiry if the party requesting the termination pays the other party the damages caused.

 

(3) (new - SG 103/1993) The termination of the contract under par. 1 and 2 may not prejudice the rights of the commercial agent under Article 40.

 

(4) (New, SG No. 38/2006) If, after the expiry of the term of the commercial agency contract, both parties continue to perform their obligations under it, it shall be deemed to have been extended indefinitely. In this case, in determining the period of notice referred to in par. 1, the duration of the contract until its expiry shall also be taken into account.

 

(5) (Former par. 1 - SG 103/1993, former para. 4, amend. - SG 38/06, in force as of 01.07.2007, amend. on entry into force - SG 80/06) The commercial representative who has ceased his activity shall be obliged to request the deletion of the entry in the Commercial Register within the period referred to in Article 4.

 

(6) (former para. 2 - SG 103/1993, former para. 5, amend. - SG 38/06, in force as from 01.07.2007, amend. on entry into force - SG 80/06) Where the exercise of the representation is terminated due to the death or placing under disability of the commercial representative, the heirs, respectively the guardian, and in the case of bankruptcy the relevant court, shall be obliged to request the deletion in the commercial register.

 

(para. 6 - former para. 3 - SG 103/1993, amend. - SG 38/06, in force from 01.07.2007)

 

 

 

APPLICABLE FIELD

 

Art. 48. The provisions of Articles 32 to 47 shall not apply to persons who participate as agents or intermediaries in stock exchange operations or as representatives of those who carry out auction operations.

 

 

 

Section III.

COMMERCIAL INTERMEDIARY

 

 

 

DEFINITION

 

Art. 49. (1) An intermediary is a trader who, by profession, arranges transactions.

 

(2) (amend. - SG No. 86/1996) The provisions on these activities shall apply to mediation in contracts of carriage by sea, insurance and stock exchange transactions, even if the mediation is carried out by a commercial intermediary.

 

 

 

COMMERCIAL INTERMEDIARY'S DIARY

 

Art. 50. (1) A commercial intermediary shall keep a diary in which he shall enter daily all contracts concluded. At the end of the day, the commercial intermediary shall date and sign the entries made.

 

(2) The entry of contracts shall be made consecutively in the order of their conclusion and shall contain: the names of the contracting parties, the time of the conclusion of the contract and its material stipulations.

 

(3) The commercial intermediary shall, at the request of the parties, provide them with extracts from his diary, which shall contain everything entered concerning their contract.

 

 

 

REMUNERATION OF THE COMMERCIAL INTERMEDIARY

 

Art. 51. The commercial intermediary shall be entitled to remuneration payable by one or both parties in accordance with their agreement. If there is no agreement, the usual remuneration for this type of activity shall be payable by both parties as the case may be.

 

 

 

Section IV.

TRADE SECRETS (NEW SG 103/1993)

 

 

 

 

 

OBLIGATION OF BUSINESS SECRECY (AMENDED, SG NO 103/1993)

 

Art. 52. In the performance of their activities, the procurator, the commercial agent, the commercial assistant, the commercial representative and the commercial intermediary shall be obliged to protect the commercial secrecy of the persons who have entrusted them with the performance of certain work, as well as their commercial prestige.

 

 

 

Chapter Seven.

COMMERCIAL BOOKS

 

 

 

DUTY TO KEEP BOOKS OF ACCOUNT

 

Art. 53. (1) Every trader shall keep books of account in which he shall record the movements of the property of his undertaking. Such movement shall be recorded in chronological order.

 

(2) A trader shall, by means of an inventory within the time limits prescribed by the Accountancy Act, ascertain the availability and valuation of the items of assets and liabilities of his undertaking's property.

 

(3) (amend. and supplemented - SG 66/05, amend. - SG 67/08) The trader shall be obliged to summarize the results of his trading activities on the basis of the entries in the books of account and the inventory, preparing an annual financial statement and, if necessary, the relevant accounting statements. The annual accounts must be certified by a registered auditor in the cases provided for by law.

 

 

 

 

 

THE RELATIONSHIP BETWEEN THE OPENING BALANCE SHEET AND THE PREVIOUS BALANCE SHEET

 

Article 54. The opening balance sheet of each year shall correspond to the closing balance sheet of the preceding year. A balance sheet shall also be drawn up on the dissolution of the trader.

 

 

 

 

 

EVIDENCE

 

Art. 55. (1) The books of trade regularly kept and the entries therein may be admitted in evidence between traders to establish business transactions.

 

(2) Trade books kept in violation of the requirements of this Act and the Accountancy Act shall not be admissible in evidence in favour of those who are required to keep them.

 

 

 

Part Two.

TYPES OF TRADERS

 

Title One.

SOLE TRADER

 

Chapter Eight.

TRADER - NATURAL PERSON

 

 

 

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DEFINITION

 

Art. 56. Any able-bodied natural person with domicile in the country may register as a sole trader.

 

 

 

 

 

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LIMITATIONS

 

Art. 57. A person may not be a sole trader who:

 

1. is in bankruptcy proceedings;

 

2. (amended, SG No. 63/1994) is insolvent;

 

3. (new - SG 63/94) has been adjudged bankrupt;

 

4. (new - SG 14/11, in force as of 15.02.2011) has been a manager, member of a management or control body of a company dissolved due to insolvency during the last two years preceding the date of the decision declaring the insolvency, if there are unsatisfied creditors;

 

5. (new - SG 15/2013, in force from 15.02.2013) has been a manager, member of a management or control body of a company for which it has been established by a penal decree which has entered into force that it has failed to comply with its obligations to establish and maintain the levels of reserves established under the Petroleum and Petroleum Products Reserves Act.

 

 

 

 

 

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REGISTRATION

 

Art. 58. (1) A sole trader shall be registered on the basis of an application which shall state:

 

1. the person's name, domicile, address and unique civil number;

 

2. the business name under which the activity is to be carried on;

 

3. the registered office and the address of the management of the business;

 

4. the object of the activity.

 

(2) A specimen of the trader's signature and a declaration that he is not disqualified from carrying on business shall be submitted with the application.

 

(3) (New, SG 124/1997) The register shall contain the particulars referred to in par. 1.

 

(4) (former paragraph 3 - SG 124/1997) A person may register only one company as a sole trader.

 

 

 

 

 

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SOLE TRADER COMPANY

 

Art. 59. The name of the sole trader shall contain, without abbreviation, the personal and the surname or patronymic by which he is known in the community.

 

 

 

 

 

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TRANSFER OF A COMPANY

 

Art. 60. (1) The sole trader's firm name may be transferred to a third person only together with his business. The consent to the transfer of the company must be given in accordance with Art. 15, par. 1.

 

(2) The successors of the sole trader who take over the business may retain the business.

 

(3) In the cases referred to in the preceding paragraphs, the name of the new owner must be added to the firm.

 

(4) (Amend. - 38 of 2006, in force as of 01.07.2007, amended on entry into force - SG 80 of 2006) The transfer shall be entered in the Commercial Register.

 

 

 

 

 

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DELETION FROM THE REGISTER

 

Art. 60a. (new - SG 84/00) The registration of the sole trader shall be deleted from the commercial register:

 

1. (amend. - 38 of 2006, in force as of 01.07.2007, amend. on entry into force - SG 80 of 2006) upon termination of his activity or upon establishment of his residence abroad - upon his application;

 

2. (amend. - SG 38/06, in force as from 01.07.2007, amend. concerning the entry into force - SG 80/06) upon his death - upon application by his heirs;

 

3. (amend. - SG 38/06, in force as of 01.07.2007, amend. concerning the entry into force - SG 80/06) upon his/her placement under guardianship - upon application by the guardian or custodian.

 

 

 

Title Two.

STATE AND MUNICIPAL ENTERPRISES

 

Chapter Nine.

TRADER - PUBLIC UNDERTAKING

 

 

 

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STATUS

 

Art. 61. The state and municipal enterprise may be a single-member limited liability company or a single-member joint stock company. State and municipal enterprises may also form other commercial companies or associations of commercial companies.

 

 

 

 

 

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DESIGN

 

Art. 62. (1) The formation and transformation of state-owned enterprises as single-member limited liability companies or single-member joint stock companies shall be carried out in accordance with the procedure established by law.

 

(2) The formation and transformation of municipal enterprises as single-member limited liability companies or single-member joint-stock companies shall be carried out by resolution of the municipal people's council.

 

(3) State-owned enterprises which are not commercial companies may be formed by law.

 

 

 

Title Three.

COMMERCIAL COMPANIES

 

Chapter Ten.

GENERAL PROVISIONS

 

 

 

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DEFINITION

 

Art. 63. (1) A commercial company is an association of two or more persons for the purpose of carrying on commercial transactions by common means.

 

(2) In cases provided by law, a company may be formed by one person.

 

(3) Commercial companies are legal persons.

 

 

 

 

 

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TYPES OF COMPANIES

 

Art. 64. (1) Commercial companies are:

 

1. the general partnership;

 

2. the limited partnership;

 

3. the limited liability company;

 

4. the public limited company;

 

5. the limited partnership with shares.

 

(2) Only the business partnerships provided for in this Act may be formed.

 

(3) (New, SG No. 58/2003) The commercial companies referred to in par. 1, items 1 and 2 shall be personal, and those under item 3 - 5 capital.

 

(4) (former para. 3, amend. - SG 58/03) It may be provided by law that a certain activity may be carried out only by a certain type of commercial companies.

 

 

 

 

 

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PARTICIPANTS IN A COMPANY

 

Art. 65. (1) The founders of the company shall be capable Bulgarian or foreign natural or legal persons.

 

(2) Any person may participate in more than one company insofar as the law does not prohibit this.

 

(3) (New, SG No. 84/2000) Where a commercial company participates in another company, its rights as a partner or sole proprietor shall be exercised by the person entitled to represent it or by a person expressly authorised to do so.

 

 

 

 

 

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BENEFICIAL OWNER

 

Art. 65a. (New, SG 27/2018) (1) The company shall be obliged to obtain, have available and provide in the cases specified by law appropriate, accurate and up-to-date information on the natural persons who are its beneficial owners, including detailed data on the rights held by them.

 

(2) The identification data of the beneficial owners and the details of the legal persons or other legal entities through which control is exercised, directly or indirectly, in accordance with the requirements of the Law on Measures against Money Laundering shall be subject to entry in the Commercial Register.

 

 

 

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PREPARATORY CONTRACT FOR THE INCORPORATION OF A COMPANY

 

Art. 66. Persons wishing to incorporate a company may agree on the actions to be carried out in order to prepare the incorporation of the company. In the event of failure to fulfil the obligations under this contract, the parties shall be liable only for the damage caused.

 

 

 

 

 

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FORMATION OF THE COMPANY

 

Art. 67. The company shall be deemed to have come into existence on the day of its entry in the commercial register. The application for registration shall be made by the elected governing body.

 

 

 

 

 

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INTERPRETATION OF THE ARTICLES OF ASSOCIATION

 

Art. 68. In interpreting the statutes, the intention of the parties and the purpose of the provision being interpreted shall be sought.

 

 

 

 

 

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LIABILITY FOR ACTS OF THE COMPANY UNTIL REGISTRATION

 

Art. 69. (1) The acts of the incorporators performed on behalf of the incorporated company until the day of incorporation shall give rise to rights and obligations for the persons who performed them. When transactions are carried out, it shall be compulsory to indicate that the company is in the process of incorporation. The persons who concluded the transactions shall be jointly and severally liable for the obligations assumed.

 

(2) Where the transaction is carried out by the founders or by a person authorised by them, the rights and obligations shall pass by operation of law to the resulting company.

 

 

 

 

 

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NULLITY OF THE INCORPORATED COMPANY

 

Art. 70. (1) (Amended, SG No. 84/2000) The incorporation of a company shall be void only where any of the following breaches has occurred:

 

1. there is no memorandum of association or it is not drawn up in the form prescribed by law;

 

2. in the case of a joint stock or limited partnership with shares, the requirements of Articles 159 and 163 have not been complied with;

 

3. - 38 of 2006, in force as of 01.07.2007, amend. as to entry into force - SG 80 of 2006)

 

4. the object of the company's activity is contrary to the law or to good morals;

 

5. the memorandum of association or the articles of association do not contain the company's name, the object of the company's activities or the amount of the contributions, as well as the capital, where the law so requires;

 

6. the capital prescribed by law has not been paid up;

 

7. fewer than the number of legally capable persons have participated in the formation of the company.

 

(2) (amend. and supplement. - 84 of 2000, suppl. - SG 58/03, amend. - 38 of 2006, in force as of 01.07.2007, amend. on entry into force - SG 80 of 2006) Any interested person, as well as the public prosecutor, may request the district court of the company's seat to declare the company void within one year after the company's formation. In the cases referred to in par. 4, 5 and 6, the court shall declare the company void only if the breach has not already been remedied or is not remedied within an appropriate period of time, which the court shall give by order.

 

(3) (Suppl. - SG 66/05, amend. - SG 38/06, in force as of 01.07.2007, amend. on entry into force - SG 80/06) The decision of the court to declare the company null and void shall take effect from its entry into force. From that moment the company shall be deemed dissolved and the court shall send the decision for entry in the commercial register, after which liquidation shall be carried out by a liquidator appointed by the registration officer of the Registry Agency.

 

(4) (new - SG 58/03, amend. - SG 38/06, in force as of 01.07.2007, amend. on entry into force - SG 80/06)

 

(5) (former paragraph 4 - SG 58/03) Where acts have been performed on behalf of the company declared void, the founders shall be jointly and severally liable for the obligations incurred.

 

(6) (new - SG 84/00, previous paragraph 5 - SG 58/03, amend. - SG 59/07, in force from 01.03.2008, amend. - SG 50/08, in force from 01.03.2008) Article 604 of the Code of Civil Procedure shall not apply to the establishment of a commercial company.

 

 

 

 

 

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PROTECTION OF MEMBERSHIP

 

Art. 71. Any member of the company may, by an action before the district court of the company's registered office, defend the right to membership and individual membership rights when they are violated by the company's organs.

 

 

 

 

 

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CONTRIBUTIONS IN KIND

 

Art. 72. (1) If any member or shareholder, as the case may be, makes a non-cash contribution, the memorandum of association or the articles of association, as the case may be, shall contain the name of the contributor, a full description of the non-cash contribution, its monetary valuation and the basis of his rights.

 

(2) (Suppl. - 103 of 1993, amend. and supplement. - SG 84/00, suppl. - SG 66/05, amend. - SG 38/06, in force as from 01.07.2007, amend. on entry into force - SG 80/06) The contribution to a limited liability company, a joint stock company or a limited partnership with shares shall be assessed by 3 independent experts appointed by the registration officer at the Registry Agency. The opinion of the experts shall contain a full description of the contribution in kind, the method of valuation, the valuation obtained and its correspondence to the amount of the share of capital or the number, nominal and issue value of the shares subscribed by the contributor. The conclusion shall be submitted to the commercial register with the application for registration.

 

(3) (new - SG 84/00, amend. - SG 38/06, in force as from 01.07.2007, amend. on entry into force - SG 80/06) The valuation in the memorandum of association, respectively in the articles of association, may not be higher than that given by the experts.

 

(4) (former paragraph 3, amend. - SG 84/00) If the contributor does not agree with the valuation, he may participate in the company with a monetary contribution or refuse to participate in the company.

 

(5) (former paragraph 4, amend. - SG 84/00) The contribution may not have as its object future labour or services.

 

 

 

 

 

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PAYMENT OF CONTRIBUTIONS IN KIND

 

Art. 73. (1) (Amended and supplemented, SG No. 20/2013) The contribution of a right for the establishment or transfer of which a notarial form is required shall be made by the memorandum or articles of association. In the case of a contribution to a capital company, the memorandum or articles of association shall be accompanied by a written agreement of the contributor describing the contribution and notarising his signature. When certifying the signature, the notary shall verify the rights of the contributor.

 

(2) The contribution of other rights shall be made in the form prescribed by law for their establishment or transfer.

 

(3) (suppl. - SG 84/00) The contribution of a claim shall be made by the memorandum of association, respectively by the articles of association, and the contributor shall attach evidence that he has notified the debtor of the transfer of the claim. The requirement of notification shall not apply where the claim is against the company itself.

 

(4) The right to the contribution shall be acquired from the moment the company comes into existence.

 

(5) (amend. - SG 104/1996, suppl. - SG 20/2013) Where the contribution has as its object a right in rem over immovable property, the relevant body of the company shall, after its formation, submit to the Registry Office for registration a notarized extract from the company contract and, where necessary, separately the consent of the contributor. The body shall submit a notarised extract of the memorandum or articles of association and the consent of the importer. Upon registration, the registrar shall verify the rights of the petitioner.

 

 

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PROHIBITION OF REMISSION AND SET-OFF

 

Art. 73а. (New, SG No. 84/2000) The obligation of the partners in the limited liability company and of the shareholders for contributions to the capital may not be waived except in the event of its reduction, nor may it be set off.

 

 

 

 

 

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HIDDEN CONTRIBUTION IN KIND

 

Art. 73б. (New, SG No. 84/2000) (1) Where a joint-stock company, within 2 years after its incorporation, acquires rights at a price exceeding 10 per cent of the capital from a person who subscribed for shares at the incorporation of the company, a resolution to that effect shall be passed at the general meeting of shareholders and Article 72(2) shall apply to the rights transferred.

 

(2) (amend. - 38 of 2006, in force as of 01.07.2007, amend. on entry into force - SG 80 of 2006) The transaction shall be effective after the entry of the decision of the general meeting in the Commercial Register.

 

(3) Paragraphs (1) and (2) shall not apply to rights acquired in the ordinary course of business of the company, on the stock exchange or under the supervision of an administrative or judicial authority.

 

 

 

 

 

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PAYMENTS TO MEMBERS AND SHAREHOLDERS

 

Art. 73в. (New, SG No. 58/2003) Payments to partners and shareholders arising from shares in a commercial company which are pledged or attached shall be made if the creditor with the pledge or attachment does not object within one month after written notification. In the event of opposition, the amount due shall be deposited in a bank as security for the creditor.

 

 

 

 

 

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REVOCATION OF A RESOLUTION AT A GENERAL MEETING OF THE COMPANY

 

Art. 74. (1) Any partner or shareholder may bring an action before the district court of the registered office of the company for the annulment of the resolution of the general meeting where it is contrary to the mandatory provisions of the law or the memorandum of association or the articles of association of the company, as the case may be. The action shall be brought against the company.

 

(2) The action shall be brought within 14 days of the day of the meeting where the claimant was present or was duly summoned and, in other cases, within 14 days of becoming aware of it but not later than 3 months from the day of the general meeting.

 

(3) Any partner or shareholder may intervene in the proceedings in accordance with the provisions of the Code of Civil Procedure. He may maintain the action even if the plaintiff abandons or withdraws it.

 

(4) (new - SG 59/07, in force from 01.03.2008, amend. - 88 of 2018, in force as of 23.10.2018) The claim shall be dealt with in accordance with Chapter Thirty-three "Proceedings in collective actions" of the Code of Civil Procedure when a decision of the general meeting of an open-ended investment company is challenged. In this case, exclusion from participation shall not be allowed.

 

 

 

 

 

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NULLITY IN CASE OF REPETITION OF THE ANNULLED DECISION

 

Art. 75. (1) The directions of the court given in the annulment of the decisions of the general meeting on the interpretation of the laws, the memorandum and articles of association shall be binding on the general meeting when it reconsiders the same question.

 

(2) Decisions or acts of the organs of the company made in contravention of a final decision of the court shall be null and void. Any partner or shareholder may always invoke the nullity or request the court to declare it null and void.

 

 

 

Chapter Eleven.

GENERAL PARTNERSHIP

 

Section I.

GENERAL PROVISIONS

 

 

 

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DEFINITION

 

Art. 76. A company formed by two or more persons for the purpose of carrying on business transactions under a common name shall be a collective company. The partners shall be jointly and severally liable without limitation.

 

 

 

 

 

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COMPANY

 

Art. 77. The name of a general partnership shall consist of the surnames or firms of one or more partners with the indication "general partnership" or "partnership" ("s-ie").

 

 

 

 

 

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CONTENTS OF THE MEMORANDUM OF ASSOCIATION

 

Art. 78. The memorandum of association shall be drawn up in writing with notarial certification of the signatures of the partners and shall contain:

 

1. - 38 of 2006, in force as of 01.07.2007, amend. on entry into force - SG 80 of 2006) the name and residence, respectively the company, the registered office and the unique identification code, as well as the address of the partners;

 

2. (amend. - SG 103/1993, suppl. - SG 124/1997) the company's name, registered office, registered address and the object of its activity;

 

3. the type and amount of each partner's contributions and their valuation;

 

4. the manner of distribution of profits and losses among the partners;

 

5. (amend. - SG 103/1993) the manner of management and representation of the company.

 

 

 

 

 

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REGISTRATION OF THE GENERAL PARTNERSHIP

 

Art. 79. (1) The application for registration of the general partnership in the commercial register shall be signed by all the partners and the memorandum of association shall be attached thereto.

 

(2) The particulars referred to in subsections (1), (2) and (5) of the preceding Article shall be entered in the register.

 

(3) The persons who, according to the contract, represent the company shall submit specimens of their signatures.

 

 

 

Section II.

LEGAL RELATIONS BETWEEN THE PARTNERS

 

 

 

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PRECEDENCE OF THE CONTRACT

 

Art. 80. The relations between the partners shall be governed by this Section, except as otherwise provided in the Memorandum of Association, except as provided in Article 87.

 

 

 

 

 

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INDEMNIFICATION FOR COSTS AND DAMAGES

 

Art. 81. (1) A partner shall be entitled to compensation for the necessary expenses incurred by him in connection with the company's affairs and for any damage suffered in connection therewith.

 

(2) For the expenses incurred or damages suffered, the company shall owe the partner the legal interest.

 

 

 

 

 

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LIABILITY FOR INTEREST

 

Art. 82. If a partner defaults in the payment of money or receives or takes money from the company for himself without being entitled to do so, he shall be liable to repay it to the company with statutory interest. If the damage to the company is greater, it may claim the difference.

 

 

 

 

 

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NON-COMPETE

 

Art. 83. (1) (Supplemented, SG No. 103/1993) A partner may participate in another company or enter into transactions relating to the subject matter of the company's business, for his own account or for the account of others, only with the consent of the other partners.

 

(2) (amend. - SG 103/1993) In the event of a breach under par. 1, the company may claim compensation for the damages caused or declare that it is subrogated to the rights and obligations under the concluded transactions. The application shall be made in writing within one month after the knowledge of the transaction, but not more than one year from its execution, and shall be addressed to the partner and to the third party.

 

(3) The right of action under the preceding paragraph shall be extinguished within 3 months from the day on which the partners became aware of the commission of the legal acts, or 3 years from the commission where the partners are unaware of them.

 

 

 

 

 

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MANAGEMENT

 

Art. 84. (1) Each partner shall have the right to manage the affairs of the company unless the memorandum of association entrusts the management to one or more partners or to another person.

 

(2) The acquisition and disposal of rights in rem in immovable property, the appointment of a manager who is not a partner and the conclusion of a contract for a loan of money in an amount greater than that specified in the memorandum of association shall require the consent of all the partners.

 

 

 

 

 

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WITHDRAWAL OF THE MANAGEMENT ASSIGNMENT

 

Art. 85. - 38 of 2006, in force as of 01.07.2007, amend. on entry into force - SG 80/06) The decision to entrust the management to one or several partners may be revoked by the district court of the registered office of the company at the request of some of the partners if the managers have violated their obligations, as well as on other grounds provided for in the contract. The decision of the court shall be sent ex officio to the Registry Agency for entry in the Commercial Register.

 

 

 

 

 

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RIGHT OF CONTROL OF THE PARTNER

 

Art. 86. A shareholder who does not participate directly in the management may inform himself personally about the company's affairs, examine the business books, company and other papers and request explanations from the managers.

 

 

 

 

 

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ADOPTION OF RESOLUTIONS

 

Art. 87. Where, according to the memorandum of association, the decisions of the company shall be taken by majority vote, each partner shall be entitled to one vote. Decisions shall be entered in a minute book.

 

 

 

Section III.

RELATIONS OF THE PARTNERS WITH THIRD PARTIES

 

 

 

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LIABILITY OF THE GENERAL PARTNERSHIP

 

Art. 88. (Amended, SG No. 103/1993) In an action against the partnership, the plaintiff may also direct his action against one or more partners. Enforcement shall be directed first against the company and, in the event of failure to satisfy, against the partners.

 

 

 

 

 

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REPRESENTATION

 

Art. 89. (1) Each partner shall represent the company unless otherwise provided by the articles of association.

 

(2) The limitation of the power of representation of a partner shall have no effect against third parties acting in good faith if it is not entered in the register of members.

 

 

 

 

 

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REVOCATION OF REPRESENTATIVE POWER

 

Art. 90. The representative power of a partner may be revoked under the conditions and in accordance with the procedure laid down in Article 85.

 

 

 

 

 

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OBJECTION OF THE PARTNERS

 

Art. 91. A partner may make his personal objections against the creditors of the company in addition to the objections of the company.

 

 

 

 

 

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LIABILITY OF INCOMING PARTNERS

 

Art. 92. Whoever joins an existing company shall be liable equally with the other partners for all the debts of the company.

 

 

 

Section IV.

DISSOLUTION OF THE COMPANY AND MEMBERSHIP

 

 

 

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GROUNDS FOR DISSOLUTION

 

Art. 93. The collecting society shall be dissolved:

 

1. (suppl. - SG 103/1993) upon expiry of the agreed term or in other cases provided for in the memorandum of association;

 

2. by consent of the partners;

 

3. by the company being declared bankrupt;

 

4. unless otherwise agreed, upon the death or placement under full disability of a partner or the dissolution of a partner who is a legal person;

 

5. (amended, SG No. 63/1994) at the request of the trustee in bankruptcy of a partner;

 

6. by notice of dissolution by a partner;

 

7. by decision of the court in the cases provided by law.

 

 

 

 

 

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DISSOLUTION BY A PARTNER WITH NOTICE

 

Art. 94. Where a company is formed without a term, any partner may request its dissolution by giving at least 6 months' notice in writing to all the partners unless otherwise provided in the memorandum of association.

 

 

 

 

 

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TERMINATION BY COURT DECISION. EXPULSION OF A PARTNER

 

Art. 95. (1) The District Court may dissolve a company on the application of a partner where another partner wilfully or with gross negligence fails to perform an obligation under the memorandum of association or the performance of the obligation becomes impossible. The rule also applies where a partner acts against the interests of the company.

 

(2) On the application of a partner, the court may, instead of dissolving the company, expel the guilty partner.

 

 

 

 

 

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DISSOLUTION BY NOTICE BY PERSONAL CREDITOR OF PARTNER

 

Art. 96. (1) A creditor of a partner who is unable for 6 months to satisfy the execution on the partner's movable property may attach the liquidation share of the debtor partner and request the dissolution of the company by written notice, subject to the procedure in Article 94.

 

(2) The company shall not be dissolved if it or the other partners repay the debt after the attachment under the preceding paragraph has been imposed. In this case, only the partner's interest in the company shall be terminated, unless the partners decide otherwise.

 

 

 

 

 

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CONTINUATION OF THE COMPANY

 

Art. 97. (1) The memorandum of association may provide that the company shall continue to exist when the membership of any partner is terminated. In that case, the remaining partners shall pay the share of the property of the partner whose membership has terminated, and in the event of the death of a partner, his heirs who have expressed a wish shall join the company. The heirs shall apply to join the company within 3 months of the discovery of the estate.

 

(2) If the heirs do not wish to become partners, as well as upon termination of the membership of a partner, the company shall pay the value of the share of the heir or of the terminated partner of the company property and the share of his annual profit for the time until the termination of the membership.

 

 

 

 

 

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PROPERTY

 

Art. 98. (1) A claim against a member for the debts of the company shall be barred by a limitation period of 5 years if the claim against the company is not subject to a shorter limitation period.

 

(2) (Supp. - SG 58/03) The limitation period shall commence on the day on which the dissolution of the company, its conversion or the departure of the partner is entered in the commercial register.

 

(3) The interruption of the limitation period in respect of the dissolved company shall also have effect in respect of the members who were in the company at the time of dissolution.

 

 

Глава дванадесета.
КОМАНДИТНО ДРУЖЕСТВО

Раздел I.
ОБЩИ РАЗПОРЕДБИ

 

 

A REMPLIR

 

 

 

 

 

 

 

 

ЗАМЯНА НА АКЦИИ НА ПРИНОСИТЕЛ

Чл. 262ш. (Нов - ДВ, бр. 58 от 2003 г., в сила от 01.01.2004 г., отм. - ДВ, бр. 88 от 2018 г., в сила от 23.10.2018 г.)

 

 

 

EXCHANGE OF BEARER SHARES

Art. 262h. (New - SG 58/03, in force from 01.01.2004, amend. - SG 88/2018, in force as from 23.10.2018)

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APPLICATION FOR REGISTRATION OF MERGERS

Art. 263. (amend. - SG 58/03, in force from 01.01.2004) (1) (amend. - (1) (SG 38/06, in force as from 01.07.2007, amend. on entry into force - SG 80/06) The managing body of the newly established or the receiving company shall apply for the entry of the merger or amalgamation in the commercial register. The application for registration shall be accompanied by the contract of conversion and the resolutions of all the companies participating in the conversion.

(2) (amend. - 38 of 2006, in force as of 01.07.2007, amend. on entry into force - SG 80 of 2006) In addition to the documents referred to in par. 1, the application shall be accompanied by:

1.

2. - SG 38/06, in force as from 01.07.2007, amend. as regards entry into force - SG 80/06)

3. a copy of the Memorandum of Association and/or the Articles of Association of the receiving company, containing all amendments and supplements, certified by the body representing the company, if such amendments and supplements have been made during the conversion;

4. the adopted memorandum and/or articles of association of the newly established company and the documents necessary for the registration of the elected bodies;

5. - SG 38/06, in force as of 01.07.2007, amend. concerning the entry into force - SG 80/06)

6. the examiners' reports;

7. the consents referred to in Article 262r;

8. the list of persons acquiring shares, stakes or membership in a newly established or acquiring company, the type of membership, as well as details of existing pledges and liens;

9. a statement by the depositaries that the temporary certificates or shares have been delivered to them, or evidence that the circumstances referred to in Article 262h(5) have been declared to the Central Depository.

(3) (Rev. - 38 of 2006, in force as of 01.07.2007, amend. on entry into force - SG 80 of 2006)

(4) The application for registration in the case of partnerships shall be made by each of the partners with management rights.

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APPLICATION FOR REGISTRATION OF A DIVISION AND A DEMERGER

Art. 263a. (New, SG 58/2003, in force as from 01.01.2004) (1) (Amended, SG 58/2003, in force as from 01.01.2004) - (1) (SG 38/06, in force as from 01.07.2007, amend. on entry into force - SG 80/06) The managing body of the company being transformed shall apply for the division or separation to be entered in the commercial register. The application for registration shall be accompanied by:

1. the contract or plan of conversion and the resolutions of all the companies participating in the conversion;

2. a copy of the memorandum of association and/or articles of association of the transferee company containing all amendments and supplements, certified by the body representing the company, if any, made in the course of the conversion;

3. the adopted memorandum and/or articles of association of the newly established company and the documents necessary for the registration of its organs.

(2) (amend. - 38 of 2006, in force as of 01.07.2007, amend. on entry into force - SG 80 of 2006) In addition to the documents referred to in par. The application shall be accompanied by:

1.

2. - SG 38/06, in force as from 01.07.2007, amend. as regards entry into force - SG 80/06) 2.

3. a copy of the memorandum of association and/or the articles of association of the company being converted, containing all amendments and supplements, certified by the body representing the company, if such amendments have been made during the conversion;

4. - 38 of 2006, in force as of 01.07.2007, amend. concerning the entry into force - SG 80 of 2006)

5. the examiners' reports;

6. the consents referred to in Article 262r;

7. the list of persons acquiring shares, stakes or membership in a newly established or acquiring company, the type of membership, as well as details of existing pledges and liens;

8. the depositaries' declaration that the temporary certificates or shares have been delivered to them, respectively the evidence that the circumstances referred to in Article 262h(5) have been declared to the Central Depository.

(3) (Rev. - 38 of 2006, in force as of 01.07.2007, amend. on entry into force - SG 80 of 2006)

(4) The application for registration in the case of partnerships shall be made by one or all of the partners with management rights.

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DEADLINE FOR APPLICATION FOR ENTRY

Art. 263b. (new, SG 58/03, in force from 01.01.2004) (1) The application under Article 263, paragraph 2 and Article 263a, paragraph 2 may not be made later than 8 months after the date on which the exchange ratio was determined by the contract or the conversion plan. This period may not be extended or renewed.

(2) (Amend. - 38 of 2006, in force as from 01.07.2007, amend. on entry into force - SG 80 of 2006) In cases where a law provides for prior authorisation of the conversion by a state authority, the application shall be submitted within the period referred to in par. 1, and the authorisation shall be submitted to the commercial register after its issue.

 

 

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REGISTRATION OF MERGERS

Art. 263c. (New, SG 58/2003, in force from 01.01.2004) (1) (Amended, SG 58/2003, in force from 01.01.2004) - (1) (SG No. 38/2006, in force as from 01.07.2007, amend. as regards entry into force - SG No. 80/2006) The registration of a merger or amalgamation shall be made by the registration officer in the file of the converting, receiving or newly established company, respectively, not earlier than 14 days after the application. An amendment to the memorandum or articles of association, an amendment to the capital and changes to the persons managing and representing the transferee company, if any, shall be registered simultaneously.

(2) (Rev. - SG 38/06, in force from 01.07.2007, amended on entry into force - SG 80/06)

(3) (Amended, repealed and supplemented as from 31.12.2007, Art. - SG 38/06, in force as from 01.07.2007, amended as regards entry into force - SG 80/06)

 

 

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ENTRY OF DIVISION AND SEPARATION

Art. 263d. (New, SG 58/03, in force as from 01.01.2004) (1) (Amended, supplemented and supplemented as from 01.01.2004, in force as from 01.01.2003, in force as from 01.01.2003, in force as from 01.01.2004). - (1) (SG 38/06, in force as from 01.07.2007, amend. on entry into force - SG 80/06) The registration of a division or a spin-off shall be made by the registration officer in the file of the converting, the receiving or the newly established company, respectively, not earlier than 14 days after the application. Amendments to the memorandum or articles of association, amendments to the capital and changes to the persons managing and representing the converting or receiving company, if any, shall be registered simultaneously. In the event of a division, the converting company shall be deleted.

(2) (Rev. - SG 38/06, in force from 01.07.2007, amended on entry into force - SG 80/06)

(3) (Amended, repealed and supplemented as from 31.12.2007, Art. - SG 38/06, in force as from 01.07.2007, amended as regards entry into force - SG 80/06)

 

 

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REFUSAL TO REGISTER THE CONVERSION

Art. 263e. (New - SG 58/03, in force from 01.01.2004, amend. - SG 38/06, in force as of 01.07.2007, amend. on entry into force - SG 80/06)

 

 

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NOTIFICATION OF CREDITORS (AMEND. - SG 38/06, IN FORCE AS FROM 01.07.2007)

Art. 263f. (new - SG 58/03, in force from 01.01.2004, amend. - SG 38/06, in force as from 01.07.2007, amend. on entry into force - SG 80/06) From the moment of registration the creditors shall be deemed to be notified of their rights in connection with the reorganisation.

 

 

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DATE OF CONVERSION

Art. 263g. (New, SG 58/03, in force as from 01.01.2004) (1) (Amended, SG 58/03, in force as from 01.01.2004). - (1) (SG 38/06, in force from 01.07.2007, amended as regards the entry into force - SG 80/06) The conversion shall have effect from the moment of entry in the Commercial Register.

(2) The contract or the plan of conversion may provide for an earlier date from which the acts of the converting companies shall be deemed to have been carried out on behalf of the newly established or acquiring companies for accounting purposes. That date may not precede by more than 6 months the date of the contract or plan of conversion.

 

 

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FINAL AND OPENING BALANCE SHEET

Art. 263h. (new - SG 58/03, in force from 01.01.2004) (1) Every company undergoing transformation which is dissolved shall draw up a closing balance sheet as at the date of transformation. A copy of the closing balance sheet shall be delivered to each of the transferee or newly established companies.

(2) Each newly incorporated company shall prepare an opening balance sheet as at the date of the conversion on the basis of the carrying amounts of the assets and liabilities acquired by the conversion or on the basis of their fair value.

(3) Where the agreement or plan of reorganisation provides for an earlier date under section 263g(2), closing and opening balances shall be drawn up as at that date.

 

 

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ACTS OF CONVERSION

Art. 263i. (new - SG 58/03, in force from 01.01.2004) (1) With the registration of the conversion under Art. 263c, par. 1, respectively Art. 263d, par. 1, the newly established companies shall come into existence and the transforming companies shall be dissolved, except for the transforming company in case of a spin-off.

(2) Upon registration of the merger or amalgamation, the rights and obligations of the converting companies shall pass to the receiving or newly established company. The members and shareholders of the converting companies shall become members or shareholders of the receiving or newly incorporated company.

(3) On the registration of the division, the rights and obligations of the company being converted shall pass to any transferee company and/or newly established company respectively on the allocation provided for in the contract or plan of conversion. If a right is not allocated, it shall pass to all transferees in proportion to the net value of the property attributable to them under the contract or plan of conversion. The partners and shareholders of the company being converted shall become partners or shareholders in one or more of the transferee companies or newly established companies as provided in the contract or plan of conversion.

(4) On the registration of the spin-off, part of the rights and obligations of the company being converted shall pass to each transferee company and/or newly established company, respectively, on the allocation provided for in the contract or plan of conversion. The members and shareholders of the company being converted shall become members or shareholders of one or more of the transferee or newly formed companies and/or retain their membership of the company being converted as provided for in the contract or plan of conversion.

(5) Upon registration of a spin-off of a single-member company, the part of the rights and obligations of the company being converted provided for in the plan of conversion shall pass to the newly established company. The converting company shall become the sole owner of the capital of the newly established company.

(6) (amend. - 38 of 2006, in force as of 01.07.2007, amend. on the entry into force - SG 80 of 2006) Where the property of a company undergoing transformation includes a right in rem over immovable property or over movable property, the transactions with which are subject to registration, the registration certificate under Art. 263c, par. 1 and art. 263d, par. 1 shall be submitted for entry in the relevant register. In the case of division and separation, the contract or plan of conversion shall also be attached.

(7) In the event of a division and separation, the pending proceedings of the cases shall continue in the person of the successor party as provided in the contract or plan of reorganisation. Where the company being converted is a defendant, the court shall, of its own motion, join as a party all companies which are jointly and severally liable pursuant to Article 263l, paragraph 1. 1 и 2.

(8) Permits, licences or concessions held by the company being converted shall, when it is dissolved, pass to the transferee company or the newly formed company on amalgamation or merger and, on demerger, to the company designated by the contract or plan of conversion, in so far as the law or the instrument of conferral does not otherwise provide.

 

 

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PROTECTION OF CREDITORS IN MERGERS

Art. 263k. (New, SG 58/03, in force as of 01.01.2004) (1) (Amended, supplemented and supplemented as of 01.01.2004) - (1) (1) The acquiring company or the newly established company shall manage separately the property of each of the transforming companies transferred to them for a period of 6 months from the moment of registration of the transformation.

(2) (suppl. - SG 101/10) Within the period referred to in par. Within the time limit set out in paragraph 1, any creditor of a company participating in the transformation whose claim is not secured and arose before the date of transformation may apply for enforcement or security in accordance with its rights. If the request is not granted, the creditor shall be entitled to preferential satisfaction of the rights which belonged to his debtor and to request the court to grant due security for the claim by attachment or garnishment.

(3) The members of the management body of the receiving or newly established company shall be jointly and severally liable to the creditors for the separate management.

 

 

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PROTECTION OF CREDITORS IN THE EVENT OF DIVISION AND SEPARATION

Art. 263l. (New, SG No. 58/2003, in force as from 01.01.2004) (1) All companies participating in the reorganisation, except the dissolved companies, shall be jointly and severally liable for the obligations incurred up to the date of the reorganisation. The liability of each company shall be up to the amount of the rights it has received, except for the company to which the obligation has been allocated by the agreement or plan of conversion.

(2) If an obligation is not allocated in a division, all the transferee and/or newly established companies shall be jointly and severally liable for it without limitation. The creditor's payment shall be borne by them in proportion to the net value of the property attributable to them under the contract or plan of reorganisation.

(3) In cases of division and separation where part of the property passes to one or more existing companies, the rules of separate administration under Article 263k shall apply to each of the receiving companies accordingly.

(4) Where, in a division by incorporation and in a separation by incorporation, the amount of the capital of the company being converted was greater than the total amount of the capital of all the newly incorporated companies, creditors with claims arising before the date of the conversion may claim security up to the amount of the difference in capital. This also applies where any or all of the newly established companies are partnerships.

 

 

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UNLIMITED LIABILITY ON CONVERSION

Art. 263m. (New, SG 58/03, in force as from 01.01.2004) (1) Unlimitedly liable partners in companies undergoing transformation shall continue to be liable to creditors for obligations incurred up to the date of transformation.

(2) Where, on conversion, a person becomes an unlimited partner in a receiving company, he shall not be liable for the debts of that company arising up to the date of conversion.

 

 

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PROHIBITION OF EXEMPTION FROM CONTRIBUTION

Art. 263n. (New, SG 58/03, in force from 01.01.2004) (1) Partners or shareholders in a company undergoing transformation or a receiving company shall not be released from the obligation to make contributions which have not been paid in full.

(2) After the date of the conversion, contributions shall be due to the receiving or newly established company in the event of a merger or amalgamation and, in the event of a division or a demerger, as provided in the contract or plan of conversion.

 

 

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CONTESTING THE CONVERSION

Art. 263o. (New, SG 58/2003, in force from 01.01.2004) (1) (Amended, SG 58/2003, in force from 01.01.2004) (1) (Amended, SG 58/2003, in force from 01.01.2004) - SG 38/06, in force from 01.07.2007, amended as regards entry into force - SG 80/06 ) Any partner or shareholder in a company involved in the conversion, as well as any of the companies involved in the conversion, may bring an action before the court of the seat of the transferee company or the newly established company in the case of a merger and amalgamation, respectively before the court of the seat of the converting company in the case of a division and a demerger, in order to establish that any of the following offences has been committed in the conversion, irrespective of which of the companies involved in the conversion the offence is:

1. a contract, draft contract, plan of conversion is missing or invalid;

2. the requirements of Article 262f, Article 262g(2)(1), (2) and (8) and Article 262g(2)(1), (2) and (8) have not been complied with. 262i, 262k, 262l, para. 2 and 3, 262m - 262f and 262c, para. 1;

3. the decision on conversion is contrary to mandatory provisions of the law or the memorandum of association, respectively the articles of association of the company.

(2) A non-equivalent exchange ratio shall not be grounds for a claim under par. 1.

(3) A claim under par. (1) shall be brought at the latest by the date of the conversion against all the companies involved in the conversion except the newly established companies. Any partner or shareholder may intervene in the proceedings and maintain the action even if the claimant waives or withdraws it.

(4) (amend. and supplement. - 38 of 2006, in force as of 01.07.2007, amend. on entry into force - SG 80 of 2006) The bringing of an action under par. 1 shall suspend the registration of the conversion. The persons referred to in par. 1 shall notify the Registry Agency of the filing of the action. On the basis of the judgment which has entered into force and which upholds the claim, the registration of the conversion shall be refused.

(5) (amend. - SG 59/07, in force from 01.03.2008) The claim under par. 1 shall be dealt with in accordance with the rules of Chapter thirty-two "Proceedings in commercial disputes" of the Code of Civil Procedure.

(6) No action under Article 74 may be brought against the decision on conversion.

 

 

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NULLITY OF A NEWLY ESTABLISHED COMPANY

Art. 263p. (New, SG No. 58/2003, in force as of 01.01.2004) (1) (Amended, SG No. 66/2005) After the date of the conversion, a declaration of nullity of the company newly established upon conversion may be sought, subject to the application of Article 70. The action may be brought only by a partner or a shareholder.

(2) A partner or shareholder may also seek a declaration of nullity where the general meeting at which the decision on conversion was taken was not convened in accordance with the procedure laid down by law or by the memorandum or articles of association and he was not present.

(3) The claim under par. (1) may not be brought by a partner or shareholder who has been involved in proceedings to challenge the conversion and the action has been dismissed.

 

 

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CLAIM FOR MONETARY CLEARANCE

Art. 263r. (New, State Gazette No. 58/2003, in force as from 01.01.2004) (1) Any partner or shareholder may, within three months from the date of the conversion, bring before the district court an action for monetary equalisation if the exchange ratio adopted in the contract or plan of conversion is not equivalent.

(2) A claim under par. (1) shall be brought against the transferee or newly formed company in the event of a merger or amalgamation. In the case of a demerger or a demerger, the action shall be brought against the company or companies in which the partner or shareholder participates after the conversion.

 

 

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RIGHT TO LEAVE

Art. 263c. (new, SG 58/03, in force from 01.01.2004) (1) A partner in a limited liability company or a shareholder whose legal status changes after the conversion and who has voted against the decision for conversion may leave the company in which he has received shares or stocks. The termination of the participation shall be effected by notarised notification to the company within three months of the date of the conversion.

(2) The shareholder who has left the company shall be entitled to receive the equivalent of the share or shares held before the conversion in accordance with the exchange ratio provided for in the contract or plan of conversion. The resigning partner may claim monetary compensation within three months from the notification under par. 1.

(3) The shares of the dissolved partner shall be taken over by the remaining partners, offered to a third party or reduced in capital. The shares of the resigned shareholder shall be taken over by the company and shall be subject to the rules for the acquisition of treasury shares except for Article 187a, paragraph 4.

 

 

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SPECIAL RULES (AMEND. - SG 66/05)

Article 263t. (new - SG 58/03, in force from 01.01.2004, amend. - (1) (amend. - (1) (SG 38/06, in force as from 01.07.2007, amended as regards the entry into force - SG 80/06) Where all the companies involved in the conversion are partnerships, Articles 262i - 262n shall not apply. At the request of a partner with management rights in one of the companies involved, the registration officer at the Registry Agency shall appoint a verifier who shall carry out a verification for all the companies involved in the conversion. In this case, Articles 262l and 262m shall apply respectively.

(2) (suppl. - SG 101/10) Where all the converting and the receiving companies are sole proprietorships and the sole owner of the capital is the same person, the conversion shall be carried out on the basis of a resolution of the sole proprietor. Articles 262f and 262g, par. 1, para. 2, items 1, 3, 4, 8 and 9, para. 3 и 4. Articles 262h to 262r and 263o to 263c shall not apply.

(3) (suppl. - SG 101/10) In the case of a transformation by spin-off of a sole trading company, no exchange ratio shall be determined and verified. Articles 261b, 262i, 262l and 262mshall not apply. This shall also apply in the case of a merger of a sole trading company into the sole owner of its capital.

(4) (New, SG 101/10) Where, in the event of a merger, the receiving company holds more than 90 per cent of the shares or shares with voting rights of the capital of the company being converted, Articles 262i and 262l to 262n shall not apply. In that case, Article 263c shall apply irrespective of whether the legal position of the member or shareholder changes after the merger.

(5) (new, SG 101/10) In the event of a merger, if the receiving company holds more than 90 per cent of the shares or shares with voting rights of the capital of the company being converted, it shall not be necessary for the general meeting of the receiving company to adopt a resolution on the merger if, within the period referred to in Art. 262k(2), but not later than 5 days before the date of the general meeting, shareholders holding at least 5 per cent of the capital do not request, pursuant to Article 223a(2), that the meeting be held.

(6) (new, SG 101/10) In the event of a division by acquisition, where the capital of the company being converted is held only by the acquiring companies, it shall not be necessary for the general meeting of the company being converted to pass a resolution on the conversion.

(7) (New, SG 101/10) In the case of a division by incorporation, Articles 262i, 262l, 262m and 262n, par. 1(5) shall not apply if the shares or stocks in the newly established companies are distributed among the partners and shareholders respectively according to their rights in the transforming company.

Section III.

CONVERSION BY CHANGE OF LEGAL FORM

 

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CHANGE OF LEGAL FORM

Art. 264. (amend. - SG 58/03, in force from 01.01.2004) (1) A commercial company (company undergoing transformation) may be transformed by change of legal form by becoming a commercial company of another type (newly established company). The newly established company shall become the legal successor of the converting company, which shall be dissolved without liquidation.

(2) No new partners or shareholders may be admitted simultaneously with the change of legal form.

 

 

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PLAN OF CONVERSION

Art. 264a. (New, SG 58/03, in force from 01.01.2004) (1) Upon change of the legal form, the managing body or the partners with the right of management in a partnership shall draw up a plan of conversion in writing with notarial certification of signatures.

(2) The plan of conversion shall contain at least the following:

1. - 38 of 2006, in force as of 01.07.2007, amend. on entry into force - SG 80/06) the legal form, the company name, the unique identification code and the registered office of the newly established company;

2. the ratio of exchange of the shares or units determined at a specific date;

3. the amount of cash payments, if any, provided for under Article 261b(2), and the time limit for payment thereof;

4. a description of the shares, stocks or membership which each partner or shareholder acquires in the newly established company, as well as details of existing liens and encumbrances;

5. the conditions relating to the allotment and delivery of shares by the newly incorporated company;

6. the rights to which shareholders with special rights and holders of securities other than shares are entitled.

(3) A draft new memorandum or articles of association of the newly established company shall be attached to the plan of conversion.

 

 

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PROVISION OF INFORMATION

Art. 264b. (New, SG 58/03, in force as from 01.01.2004) (1) (Amended, SG 58/03, in force as from 01.01.2004) (1) (Amended, SG 58/03, in force as from 01.01.2004) - (1) (SG 38/06, in force as from 01.07.2007, amend. on entry into force - SG 80/06) The plan of conversion shall be submitted for announcement in the Commercial Register. If the company to be converted is a capital company, the plan submitted shall be announced not less than 30 days before the date of the general meeting for taking a decision on conversion.

(2) The following shall be made available to the members and shareholders:

1. the plan of conversion together with the draft new memorandum or articles of association of the newly established company;

2. (amend. - SG 66/05) the balance sheet as at the last day of the month preceding the date of the plan of conversion, unless the last annual financial statements relate to a financial year ended less than 6 months before that date;

3. the particulars of the examiner appointed and of the depositary authorised under Article 262h.

(3) The materials referred to in subsection (2) shall be delivered to the registered office and address of the capital company within 30 days before the date of the general meeting. On request, a copy of the materials or extracts therefrom shall be made available to any partner or shareholder free of charge.

(4) The period referred to in par. 3 may be waived if all the partners or shareholders have voted in favour of the conversion.

 

 

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VERIFICATION OF THE CONVERSION

Art. 264c. (New, SG No. 58/2003, in force from 01.01.2004) (1) Where the newly established company is a capital company, the plan of conversion shall be verified by a special verifier appointed by the management body or by the members with management rights.

(2) The examiner shall make a report of the examination to the members or shareholders. The report shall contain an assessment of whether the exchange ratio provided for in the plan is adequate and reasonable and shall state the particulars referred to in section 262m(2).

(3) The rules of Article 262l, para. 3 and 4 and art. 262m par. 3.

(4) (Amend. - 38 of 2006, in force as of 01.07.2007, amended on entry into force - SG 80 of 2006) Except in the cases referred to in par. In the cases referred to in paragraph 1, verification of the conversion shall also be carried out at the request of a partner or shareholder or at the decision of the management or supervisory body of the company. Where the verification is requested by a partner, a shareholder or a controlling body, the verifier shall be appointed by the registration officer of the Registry Agency.

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DECISION ON CONVERSION

Art. 264d (new - SG 58/03, in force from 01.01.2004) (1) The change of the legal form of the company shall be carried out by a resolution for conversion pursuant to Art. 262p.

(2) Where, on a change of legal form, a partner in a limited liability company or a shareholder becomes an unlimited partner, Article 262p shall apply.

(3) The resolution on conversion shall approve or amend the conversion plan. The resolution shall also adopt the memorandum of association and/or the articles of association of the newly established company and elect the organs, whereby the requirements as to the form of the memorandum of association or the articles of association shall be deemed to be fulfilled.

 

 

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CAPITAL OF THE NEWLY INCORPORATED COMPANY

Art. 264e. (New, SG 58/03, in force from 01.01.2004) (1) Where the newly established company is a capital company, the amount of its capital may not be greater than the net value of the assets of the company being converted. In that case, the verifier shall carry out a verification of compliance with that requirement.

(2) The rules of Article 262f(2) and (3) shall apply accordingly.

 

 

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ADDITIONAL RULES IN THE CASE OF A PUBLIC LIMITED COMPANY AND A LIMITED PARTNERSHIP WITH SHARES

Art. 264f. (New, SG No. 58/2003, in force as of 01.01.2004) (1) (amend., SG No. 88/2018, in force as of 23.10.2018) Article 262c shall apply to the holders of special rights which are not shares in the company being converted.

(2) For the transfer of shares in the newly established company, Article 262c shall apply accordingly.

 

 

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ENTRY

Art. 264g. (New, SG No. 58/2003, in force as from 01.01.2004) (1) (Amended, SG No. 58/2003, in force as from 01.01.2004). - (1) (SG 38/06, in force as from 01.07.2007, amend. on entry into force - SG 80/06) The change of the legal form shall be entered in the Commercial Register not earlier than 14 days after the application.

(2) The application for registration shall be submitted by the managing body or by a partner with management rights in the newly established company and shall be accompanied by:

1. the resolution for conversion;

2. the consents referred to in Article 264d, paragraph 2;

3. the adopted memorandum and/or articles of association of the newly established company and the necessary documents for the registration of the elected bodies;

4. the examiner's report, if an examination has been carried out;

5. the list of persons acquiring shares, stocks or membership in the newly established company and the type of membership;

6. the depositary's declaration that the temporary certificates or shares have been delivered to it, or the evidence that the circumstances referred to in Article 262h(5) have been declared to the Central Depository.

(3) (Rev. - 38 of 2006, in force as of 01.07.2007, amend. on entry into force - SG 80 of 2006)

 

 

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EFFECT OF THE ENTRY

Art. 264h. (new - SG 58/03, in force from 01.01.2004) (1) The change of the legal form shall have effect from the entry in the Commercial Register.

(2) With the entry of the change of the legal form the company being transformed shall be dissolved and the newly established company shall come into existence. The rights and obligations of the converting company shall pass entirely to the newly established company.

(3) The partners and shareholders of the converting company shall become partners or shareholders of the newly established company.

(4) (amend. - 38 of 2006, in force as of 01.07.2007, amend. on entry into force - SG 80 of 2006) Where the property of the company being transformed includes a right in rem in immovable property or in movable property, the transactions with which are subject to registration, the certificate for registration of the change of legal form shall be submitted for registration in the relevant register.

(5) Permits, licenses or concessions held by the company being converted shall pass to the newly established company to the extent that the law or the instrument of grant does not provide otherwise.

(6) At the date of registration, a closing and opening balance sheet shall be drawn up in accordance with Article 263h, par. 1 и 2.

 

 

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PROTECTION OF CREDITORS

Art. 264i. (New, SG 58/03, in force from 01.01.2004) (1) The unlimited partners in the company undergoing transformation shall continue to be liable to the creditors for the obligations arising before the change of legal form. Where a person becomes an unlimited partner in the newly constituted company, he shall not be liable for the debts incurred before the change of legal form.

(2) Partners or shareholders in a company undergoing conversion shall not be discharged from liability for contributions which have not been paid in full.

(3) Where the company being converted is a company limited by shares and the newly established company is a partnership or a company with a smaller capital, creditors with claims arising before the change of legal form may claim security up to the amount of the difference in capital.

 

 

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CHALLENGING THE CONVERSION

Art. 264k. (New, SG 58/03, in force from 01.01.2004) (1) Any partner or shareholder in a company undergoing transformation may bring an action before the district court of its registered office to establish that any of the following breaches has been committed in the change of legal form:

1. there is no plan of conversion or the plan is invalid;

2. the requirements of Article 264a, par. 1 and 2, items 1, 2 and 6, Art. 264b - 264e and Art. 262c, par. 1;

3. the decision on conversion is contrary to mandatory provisions of the law or the memorandum of association, respectively the articles of association of the company.

(2) A non-equivalent exchange ratio shall not be grounds for a claim under par. 1.

(3) A claim under par. (1) shall be brought against the converting company at the latest by the registration of the change of legal form. Any partner or shareholder may intervene in the proceedings and maintain the action even if the claimant waives or withdraws it.

(4) (amend. - 38 of 2006, in force as of 01.07.2007, amend. on entry into force - SG 80 of 2006) The bringing of an action under par. 1 shall suspend the registration of the conversion. On the basis of the judgment which has entered into force and which upholds the claim, the registration of the conversion shall be refused.

(5) (amend. - SG 59/07, in force from 01.03.2008) The claim under par. 1 shall be dealt with in accordance with the rules of Chapter thirty-two "Proceedings in commercial disputes" of the Code of Civil Procedure.

(6) No action under Article 74 may be brought against the decision on conversion.

 

 

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NULLITY OF THE NEWLY ESTABLISHED COMPANY

Art. 264l. (New - SG 58/03, in force from 01.01.2004, amend. - SG 66/05) After registration of the change of legal form a partner or shareholder may request a declaration of nullity. Article 263p shall apply accordingly.

 

 

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PROTECTION OF A PARTNER AND SHAREHOLDER

Art. 264m. (New, SG 58/03, in force as from 01.01.2004) (1) Any partner or shareholder may, within three months after the registration of the change of legal form, bring an action for pecuniary equalization before the district court against the company if the exchange ratio adopted in the conversion plan is not equivalent.

(2) A partner in a limited liability company or a shareholder whose legal status changes after the change of legal form and who has voted against the decision for conversion may leave the newly established company. Article 263c shall apply accordingly.

 

 

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CHANGE OF LEGAL FORM OF A SINGLE-MEMBER COMPANY

Art. 264n. (New, SG 58/03, in force from 01.01.2004) (1) Where a change of the legal form of a single-member company is effected, no plan of conversion shall be drawn up and there shall be no obligation to provide information. The appointed verifier shall only carry out a capital verification pursuant to Article 264e.

(2) The sole proprietor of the capital shall not have the rights referred to in Articles 264k, 264l and 264m.

 

Section IV.

CONVERSION BY TRANSFER OF PROPERTY TO THE SOLE PROPRIETOR (NEW - SG 58/03, IN FORCE FROM 01.01.2004)

 

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TRANSFER OF PROPERTY TO THE SOLE PROPRIETOR

Art. 265. (amend. - SG 58/03, in force from 01.01.2004) (1) The entire property of a sole proprietorship (a company under transformation) may pass to the sole proprietor if he is a natural person and is registered as a sole proprietor. The converting company shall be dissolved without liquidation.

(2) A conversion under par. (1) may not be carried out if shares or stocks in the converting company are pledged or seized.

(3) The resolution for conversion shall be taken by the sole owner in writing with notarial certification of signature.

 

 

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ENTRY

Art. 265a. (New, SG 58/2003, in force from 01.01.2004) (1) (Amended, SG 58/2003, in force from 01.01.2004) (1) (Amended, SG 58/2003, in force from 01.01.2004) - (1) (SG 38/06, in force from 01.07.2007, amend. on entry into force - SG 80/06) The transfer of property to the sole owner shall be entered in the commercial register in his file and in the file of the company being converted, which shall be deleted.

(2) (Rev. - SG 38/06, in force as of 01.07.2007, amend. on entry into force - SG 80/06)

(3) (Amended, repealed and supplemented by repealing Article 2(2)(a) of Regulation (EC) No ... - SG 38/06, in force as from 01.07.2007, amended as regards entry into force - SG 80/06)

(4) (amend. - (4) (4) (SG 38/06, in force as from 01.07.2007, amend. as regards entry into force - SG 80/06) From the moment of registration, creditors shall be deemed to be notified of their rights under Article 265c.

 

 

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ACTION

Art. 265b. (New, SG 58/03, in force as from 01.01.2004) (1) (Amended, SG 58/03, in force as from 01.01.2004). - (1) (SG 38/06, in force as of 01.07.2007, amend. on entry into force - SG 80/06) The transfer of property to the sole proprietor shall have effect from the moment of its entry in the commercial register in the file of the company being transformed.

(2) Upon registration, all rights and obligations of the company being converted shall pass to the sole proprietor.

(3) (amend. - 38 of 2006, in force as of 01.07.2007, amended on entry into force - SG 80 of 2006) Where the property of the company being converted includes a right in rem in immovable property or in movable property, the transactions with which are subject to registration, the certificate of registration of the transfer of property to the sole proprietor shall be submitted for registration in the relevant register.

(4) Permits, licenses or concessions held by the converting company shall pass to the sole proprietor to the extent not otherwise provided by law or the instrument of grant.

 

 

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CREDITOR PROTECTION

Art. 265c. (New, SG 58/03, in force from 01.01.2004) (1) (Amended, supplemented and supplemented as follows) - (1) (SG 38/06, in force as from 01.07.2007, amend. on entry into force - SG 80/06) The sole trader shall manage separately the property of the company being transformed which has passed to him for a period of 6 months from the moment of registration of the transformation.

(2) Within the period referred to in par. (1) any creditor of the company being converted and of the sole trader whose claim is not secured and arose before the registration may apply for enforcement or security in accordance with his rights. If the request is not granted, the creditor shall be entitled to preferential satisfaction of the rights belonging to his debtor.

(3) Until the expiry of the period of separate management, the sole proprietor may not request deletion from the commercial register.

 

Section V.

CONVERSION WITH PARTICIPATION OF COMPANIES FROM MEMBER STATES OF THE EUROPEAN UNION OR FROM ANOTHER STATE PARTY TO THE AGREEMENT ON THE EUROPEAN ECONOMIC AREA (NEW - SG 104/07)

 

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ANNEX I

(1) A conversion under this section shall be effected only by way of merger where at least one of the companies involved in the conversion has its registered office in another Member State of the European Union or in a State party to the Agreement on the European Economic Area and is of a type referred to in Art. 1 of the First Council Directive 68/151/EEC on the coordination of safeguards which, for the purposes of making such safeguards equivalent throughout the territory of the Community, are required by Member States of companies within the meaning of the second paragraph of Article 58 of the Treaty, and the companies involved in the conversion have their registered office in the Republic of Bulgaria and are capital companies, with the exception of open-ended investment companies.

(2) No conversion referred to in par. (1) where any of the companies involved in the conversion has its registered office outside the European Union or the law of the Member State applicable to any of the companies involved in the conversion does not permit such conversion.

(3) No conversion under par. (1) where the company being converted having its registered office in the Republic of Bulgaria owns land and the newly established company or the receiving company has its registered office outside the Republic of Bulgaria. This prohibition shall apply in accordance with the conditions resulting from the accession of the Republic of Bulgaria to the European Union.

(4) The rules of this section shall apply in relation to a company involved in the conversion having its registered office in the Republic of Bulgaria and, where the transferee or newly established company has its registered office in the Republic of Bulgaria, in relation to the application for registration, registration and effect of registration. Article 261b shall also apply.

 

 

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GENERAL CONVERSION PLAN

Art. 265e. (New, SG 104/07) (1) Before taking a decision on conversion, the acquiring and/or converting companies participating therein shall draw up a common conversion plan.

(2) The common plan of transformation shall be drawn up in writing and shall be signed by the persons representing the company in the case of companies with their registered office in the Republic of Bulgaria participating in the transformation.

(3) The common plan of conversion shall regulate the manner in which the conversion is to be carried out. It shall contain at least:

1. the legal form, the name and the registered office of each of the companies being converted, of the receiving company in the event of a merger and of the newly established company in the event of a merger;

2. the proportion of the exchange of shares or units determined as of a specific date;

3. the amount of cash payments, if any, provided for under Article 261b(2) and the time limit for payment thereof;

4. a description of the shares which each partner or shareholder acquires in the newly established company or the receiving company, including the envisaged increase in the capital of the receiving company, if any, required to effect the reorganisation, and the conditions concerning the allotment and delivery of the shares by the newly established company or the receiving company;

5. the point in time from which a shareholding in a newly incorporated company or a receiving company confers a right to a share of the profits and any particulars relating to that right;

6. the point in time from which the acts of the converting companies shall be deemed to have been carried out on behalf of the newly formed or receiving company for accounting purposes;

7. the rights which the newly incorporated company or the receiving company shall confer on shareholders with special rights and on holders of securities other than shares;

8. any advantage granted to the examiners referred to in Article 265h or to the members of the management and control bodies of the companies involved in the conversion;

9. the impact of the conversion on employment;

10. the procedure for determining the participation of employees in the management of the newly established company or the receiving company, if this is possible;

11. information on the valuation of the assets passing to the newly established or acquiring company.

(4) The following shall form an integral part of the general plan of conversion:

1. the draft memorandum or articles of association of the newly established company in the case of a merger, respectively the amendments to the memorandum or articles of association of the receiving company in the case of an amalgamation;

2. the annual financial statements and the management report and/or the balance sheet of the converting and of the acquiring company on the basis of which the conversion plan is drawn up.

 

 

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REPORT OF THE MANAGEMENT BODY

Art. 265f. (New, SG 104/07) The management body of each of the converting and acquiring companies shall draw up a written report on the conversion. The report shall contain a detailed legal and economic justification of the general plan of conversion, and in particular of the exchange ratio, as well as of the impact of the conversion on the situation of the members and shareholders, creditors, employees.

 

 

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SUBMISSION OF THE PLAN AND REPORT TO THE COMMERCIAL REGISTER

Article 265g. (New, SG 104/07) (1) The general plan of conversion and the report of the management body of each converting and/or acquiring company with its registered office in the Republic of Bulgaria shall be submitted to the Commercial Register. The announcement shall be made simultaneously in the affairs of each converting and/or acquiring company not less than one month before the date of the general meeting for the adoption of the decision on conversion.

(2) Together with the acts referred to in par. (1) a list shall be published in the commercial register containing the name, registered office, address and register in which each converting and/or receiving company is entered. The list shall also contain information for each company concerning the rules for the protection of its creditors and minority shareholders and the place where full information on this matter may be obtained.

(3) Within the period referred to in par. 1, the report of the management body shall be made available to the employees' representatives referred to in Article 7a of the Labour Code and, where there are none, to the employees. The opinions of the employees' representatives received shall be annexed to the report.

 

 

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VERIFICATION OF THE CONVERSION

Art. 265h. (New, SG 104/07) (1) The general conversion plan shall be verified by a special verifier for each converting or accepting company having its registered office in the Republic of Bulgaria, who shall be appointed by the management body of the company concerned.

(2) At the joint request of all the converting and acquiring companies, the registration officer of the Registry Agency may appoint a common verifier for all the converting and acquiring companies, including those having their registered office in another Member State.

(3) The examiner appointed under par. (1) and (2), Art. 262l, para. 3.

(4) The verifier appointed under par. (1) and (2) or appointed in accordance with the law of another Member State in which the converting or receiving company has its registered office shall have the rights referred to in Article 262l(4) and shall be liable under Article 262m(4). 3.

(5) No verification of the conversion shall be carried out if all the members or shareholders of the converting and the receiving companies have consented thereto in writing.

 

 

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VERIFIER'S REPORT

Art. 265i. (New, SG 104/07) (1) For the report of the verifier appointed under Art. 265h, par. 1 and 2, Art. 262m, par. 1 и 2.

(2) Where the newly established company in a merger has its registered office in the Republic of Bulgaria or where in a merger an increase in the capital of the receiving company which has its registered office in the Republic of Bulgaria is effected, the verifier shall also prepare a report on the verification of the capital. Article 262f, par. 1 и 2.

(3) The verifier's report as well as the report of the management body shall be submitted to the registered office and the address of the respective converting and/or receiving company having its registered office in the Republic of Bulgaria within one month before the date of the general meeting. On request, a copy of the materials or extracts therefrom shall be made available to any member or shareholder free of charge.

 

 

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RESOLUTION ON CONVERSION

Art. 265k. (New, SG 104/07) (1) The general meeting of each of the converting and the accepting company shall, after taking cognisance of the reports referred to in Articles 265e and 265i, separately adopt a resolution on conversion approving the common plan of conversion.

(2) The resolution on conversion of a converting or an accepting company having its registered office in the Republic of Bulgaria shall be adopted in accordance with Article 262p(2), (3) and (4).

(3) Where a partner in a limited liability company or a shareholder in a company with its registered office in the Republic of Bulgaria becomes an unlimited partner in the receiving or newly established company, Article 262p shall also apply.

 

 

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CERTIFICATION OF THE LEGALITY OF THE CONVERSION

Art. 265l. (New, SG 104/07) Where the transferee company or the newly established company has its registered office in another Member State, the management body of any company undergoing conversion having its registered office in the Republic of Bulgaria shall request the Commercial Register to issue a certificate of the lawfulness of the conversion in respect of that company. The request shall be accompanied by the resolution for conversion, the consents referred to in Art. 265k, par. 3, the examiner's report and evidence that the resolution has been adopted in compliance with all the requirements of the law, as well as a declaration that the company does not own any land pursuant to the prohibition under Art. 265d, para. 3.

 

 

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REGISTRATION OF THE CONVERSION

Art. 265m. (New, SG 104/07) (1) The governing body of the newly established or the receiving company with its registered office in the Republic of Bulgaria shall apply for the entry of the merger or amalgamation in the commercial register. The application for registration shall be accompanied by the common plan of conversion and the resolutions of all the companies involved in the conversion, as well as the certificates referred to in Article 10 of Directive 2005/56/EC of the European Parliament and of the Council on cross-border mergers of limited liability companies in respect of converting companies having their registered office in another Member State. Article 263(2) shall apply accordingly.

(2) The registration of a merger or amalgamation shall be made in the file of the receiving, respectively the newly established, company having its registered office in the Republic of Bulgaria, as well as in the files of the converting companies having their registered office in the Republic of Bulgaria, not earlier than 14 days after the application, if:

1. the converting companies with registered offices in other Member States have submitted certificates pursuant to Article 10 of Directive 2005/56/EC;

2. the companies involved in the conversion having their registered office in the Republic of Bulgaria have complied with the requirements of this Section and the requirements of the law concerning the adoption of the decision on conversion;

3. the converting and the acquiring companies have approved a common plan of conversion; and

4. the requirements of Bulgarian law relating to the receiving or newly established company have been complied with.

(3) Simultaneously with the merger, an amendment to the memorandum or articles of association, an amendment to the capital or a change of the persons managing and representing the acquiring company, if any, shall be registered.

 

 

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CANCELLATION OF THE CONVERTING COMPANIES

Art. 265n. (New - SG 104/07, suppl. - 22 of 2015, in force from 24.03.2015) Where the seat of the newly established or the receiving company is in another Member State, the converting companies with their seat in the Republic of Bulgaria shall be deleted from the Commercial Register on the basis of a notification from the register of the Member State in which the receiving or the newly established company is registered that the conversion has been registered. The notification shall also be received through the system of interconnection of registers.

 

 

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EFFECT OF THE CONVERSION

Art. 265o. (New, SG 104/07) (1) The conversion referred to in Article 265m shall have effect from the moment of registration in the commercial register, and the conversion where the accepting or newly established company has its registered office in another Member State shall have effect in accordance with the law of that State.

(2) On registration of the conversion, the newly established company shall come into existence and the converting companies shall be dissolved and the rights and obligations of the converting companies shall pass to the receiving or newly established company. The members and shareholders of the companies being converted shall become members or shareholders of the transferee company or of the newly established company.

(3) Where the property of a company under conversion with its registered office in the Republic of Bulgaria includes a right in rem over immovable property, movable property or any other right, the transactions with which are subject to registration in a special register, the certificate of registration in the commercial register, respectively the notification of registration under Article 265n of the register of a Member State, shall be submitted for registration in the relevant register.

(4) Permits, licences or concessions held by the converting company shall pass to the transferee or newly established company to the extent that the law or the instrument of grant does not provide otherwise.

 

 

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CHALLENGING THE RESOLUTION AND PROTECTING CREDITORS

Art. 265p. (New, SG 104/07) (1) No action under Article 74 may be brought against the decision on the conversion of a company having its registered office in the Republic of Bulgaria. No action may also be brought for the declaration under Article 263p of the nullity of the newly established company with registered office in the Republic of Bulgaria.

(2) A conversion under this section may not be declared void. A conversion may also be challenged by persons under section 263o where the requirements of this section have not been complied with. A non-equivalent exchange ratio is not a cause of action.

(3) Where the transferee or newly incorporated company has its registered office in another Member State, the action shall be brought not later than the issue of a certificate under section 265l. The filing of the action shall stay the issue of the certificate. On the basis of the judgment which has become final and which upholds the action, the certificate shall be refused.

(4) Where the transferee company or the newly established company has its registered office in the Republic of Bulgaria, the action shall be brought at the latest before the registration of the conversion. The bringing of the action shall stay the registration of the conversion. The registration of the conversion shall be refused on the basis of the final decision granting the claim.

 

 

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SPECIAL RULES

Art. 265p. (New, SG 104/07) Where the receiving company is the sole owner of the capital of all the companies being converted, the conversion shall be effected on the basis of a decision of the sole owner of the capital. Article 265e, par. 3(2)-(5), Articles 265h, 265i and 265o(2), second sentence shall not apply.

 

 

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EMPLOYEE PARTICIPATION

Art. 265c. (New, SG 104/07) (1) Where one of the transforming companies, the transferee company or the newly established company has its registered office in the Republic of Bulgaria, Articles 12 - 15, 16, par. 1, 2 and par. 3(4) and (5) (with one-third instead of 25 per cent of the total number of employees required), Articles 17, 18, 19, 29 and 30 of the Act on Information and Consultation of Employees in Multinational Enterprises, Groups of Enterprises and European Companies, and the receiving or newly established company shall be deemed to be a European company under this section.

(2) Where the seat of the receiving or newly established company is in the Republic of Bulgaria, the management bodies of the converting companies and of the receiving company may decide, without negotiations, to apply the standard rules referred to in Articles 16 and 17 of the Act on Information and Consultation of Employees in Multinational Enterprises, Groups of Enterprises and European Companies. Where the seat of the host or newly established company is in another Member State, they may decide to apply the standard rules adopted in its legislation in accordance with Council Directive 2001/86/EC supplementing the Statute for a European company with regard to the involvement of employees.

(3) Where the seat of the receiving or newly established company is in the Republic of Bulgaria and one of the converting companies has applied rules on employee participation within the meaning of § 1, item 20 of the additional provisions of the Act on information and consultation of employees in multinational undertakings, groups of undertakings and European companies, the receiving or newly established company shall be obliged to ensure the exercise of the rights arising from those rules. This rule shall also apply in the event of a subsequent conversion pursuant to this Chapter or to Council Regulation (EC) No 2157/2001 on the Statute for a European company (SE), but not more than three years after the date referred to in Article 265o(1). 1.

 

Chapter seventeen.

LIQUIDATION

 

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START OF LIQUIDATION

Art. 266. (1) After the dissolution of the commercial company, liquidation shall be carried out.

(2) (New, SG No. 83/1996, amend. - SG 38/06, in force as from 01.07.2007, amend. on entry into force - SG 80/06) The period within which the liquidation shall be completed shall be determined by the general meeting of the limited liability company and the joint stock company, and for other commercial companies - by unanimous decision of the unlimited partners. Such time limit shall also be set by the registration officer of the Registry Agency when he appoints liquidators. If necessary, the period laid down may be extended.

(3) (former para. 2 - SG 83/1996, amend. - SG 84/00, suppl. - SG 66/05, amend. - SG 38/06, in force as from 01.07.2007, amend. on entry into force - SG 80/06) The liquidators shall be entered in the Commercial Register, where notarised consents with specimen signatures shall be submitted.

(4) (Former par. 3, amend. - SG 83/1996, amend. - SG 38/06, in force as from 01.07.2007, amend. on entry into force - SG 80/06) The court of the registered office may, for important reasons, appoint or dismiss liquidators at the request of the partners, respectively the shareholders holding 1/20 of the capital.

(5) (New, SG No. 83/1996) The remuneration of the liquidators shall be determined by:

1. the general meeting of the limited liability company or joint stock company;

2. the unlimited partners in commercial companies - unanimously;

3. the court, where the liquidators are appointed by it;

4. (new - SG 38/06, in force as of 01.07.2007, amended on entry into force - SG 80/06) the registration officer of the Registry Agency, when the liquidators are appointed by him.

(6) (new, SG No. 83/1996) The liquidators shall bear the same responsibility for their liquidation activities as the managers and other executive bodies of the commercial companies.

 

 

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INVITATION TO CREDITORS

Art. 267. - 38 of 2006, in force as of 01.07.2007, amend. on entry into force - SG 80 of 2006) The liquidators shall, when announcing the dissolution of the company, invite its creditors to submit their claims. The invitation shall be made in writing to the known creditors and shall be published in the commercial register.

 

 

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LIQUIDATORS' DUTIES

Art. 268. (1) The liquidators shall complete the transactions in progress, collect the claims, convert the remaining property into money and satisfy the creditors. They may enter into new transactions only if the liquidation so requires.

(2) The liquidators may, by agreement with the members, respectively with the shareholders and creditors, transfer to them separate objects of the liquidation property, provided that the rights of the remaining members and creditors are not prejudiced thereby.

(3) (New, SG 61/1993, amend. - The liquidators shall be obliged to notify the National Revenue Agency of the commenced liquidation.

(4) (new - SG 34/11, in force from 03.05.2011) The liquidator shall be obliged to exercise his powers with the care of a good trader.

 

 

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REPRESENTATION

Art. 269. (1) The liquidators shall represent the company and shall have the rights and obligations of its executive body.

(2) The liquidators may represent the company only jointly. A will to the company may be accepted by one liquidator.

 

 

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OPENING BALANCE SHEET AND ACCOUNTS

Art. 270. (1) (Am. - SG 66/05, amend. - 105 of 2006, in force from 01.01.2007) The liquidators shall draw up a balance sheet at the time of the dissolution of the company and a report explaining the balance sheet. At the end of each year they shall make an annual closure and submit an annual financial statement and an annual report on their activities to the management body.

(2) The governing body shall decide on the adoption of the opening balance sheet, the annual closure and the discharge of the liquidators.

 

 

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AMALGAMATION OF A COMPANY IN LIQUIDATION

Art. 270a. (New, SG No. 83/1996, amended, SG No. 58/2003)

 

 

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DISTRIBUTION OF PROPERTY

Art. 271. The property remaining after the satisfaction of creditors shall be distributed among the partners, respectively among the shareholders.

 

 

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PROTECTION OF CREDITORS

Art. 272. (1) (amend. - SG 83/1996, amend. and supplement. - 38 of 2006, in force as of 01.07.2007, amend. on entry into force - SG 80 of 2006) The company's assets shall be distributed only if six months have elapsed from the day on which the invitation to creditors was announced in the commercial register.

(2) Where a creditor who has been notified does not assert his claim, the amount due shall be deposited in a bank in his name.

(3) If any debt is disputed, the property shall be distributed only after security has been given to the creditor.

(4) (New, SG No. 83/1996) The governing body of the company may, after creditors have been satisfied, write off the claims of the company which are uncollectible. The decision shall be adopted by a simple majority.

 

 

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SUSPENSION AND TERMINATION OF LIQUIDATION PROCEEDINGS UPON OPENING OF INSOLVENCY PROCEEDINGS

Art. 272a. (New, SG No. 84/2000) (1) (Supplemented, SG No. 38/2006) The liquidation proceedings of a company in liquidation shall be suspended from the date of the decision to open insolvency proceedings. The winding-up proceedings shall be terminated as from the date on which the decision under Article 630 enters into force. By the decision opening the insolvency proceedings, the court shall declare the debtor company insolvent under Article 630(2) and Article 632(2) respectively. 1.

(2) (amend. - 38 of 2006, in force as of 01.07.2007, amend. on entry into force - SG 80 of 2006) In the cases under par. In the cases referred to in paragraph 1, the bankruptcy court shall be obliged to send a copy of the decision to open bankruptcy proceedings for entry in the Commercial Register on the same day.

 

 

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THE LIQUIDATOR'S REPORT AND BALANCE SHEET ON WINDING UP

Art. 272b. (New, SG No. 84/2000) (1) In cases where insolvency proceedings have been opened for a company in liquidation, the liquidator shall draw up and submit to the insolvency court a balance sheet as at the date of the decision opening the insolvency proceedings and a report on his activities under Article 270 within 7 days of the suspension of the liquidation proceedings.

(2) The appointed insolvency administrator, the debtor or a creditor may make an objection to the balance sheet and the report referred to in par. (1) within 7 days of their submission to the court.

(3) Within 14 days, the court shall rule on the objection by order, which shall not be subject to appeal.

(4) If no objection is received within the period referred to in paragraph (2), the liquidator's account and balance sheet shall be deemed to have been accepted.

(5) While the winding-up proceedings are suspended, the liquidator may not carry out the acts provided for in Chapter seventeen.

 

 

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WINDING UP

Art. 273. (1) (Suppl. - 1. - SG 38/06, in force as of 01.07.2007, amend. on entry into force - SG 80/06) When all liabilities have been settled and the balance of the property has been distributed, the liquidators shall request the company's cancellation.

(2) (amend. - 38 of 2006, in force as of 01.07.2007, amended on entry into force - SG 80 of 2006) If it is later established that further liquidation actions are necessary, the registration officer at the Registry Agency shall, upon the request of the interested party, appoint the former or other liquidators.

 

 

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CONTINUATION OF A DISSOLVED COMPANY

Art. 274. (1) (Supp. - SG No. 58/2003) Where a company is dissolved by reason of the expiry of the term or by decision of the competent company authorities, they may decide to continue its activities if the distribution of the property has not been commenced. This provision shall also apply to the dissolution of a limited liability company under Article 155, paragraph 3, and of a joint stock company under Article 252, paragraph 3. 1, т. 6.

(2) The decision under par. 1 shall be taken:

1. for a joint stock company - by a majority of at least 3/4 of the represented capital;

2. in other commercial companies - by unanimity.

(3) The liquidators shall declare the decision on the continuation of the company for entry in the commercial register.

 

Chapter eighteen.

ASSOCIATIONS (AMEND. - SG 104/07)

Section I.

CONSORTIUM

 

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DEFINITION

Art. 275. A consortium is a contractual association of traders for the purpose of carrying out a particular activity.

 

 

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APPLICABLE PROVISIONS

Art. 276. The consortium shall be governed by the rules applicable to the civil partnership or to the company in the form of which the consortium is organised, respectively.

 

Section II.

HOLDING

 

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DEFINITION

Art. 277. (1) A holding company is a joint-stock company, limited partnership with shares or limited liability company which has the purpose of participating in any form in other companies or in their management, with or without carrying on its own production or commercial activity.

(2) At least 25 per cent of the holding company's capital must be contributed directly to subsidiaries.

(3) A subsidiary is one in which the holding company owns or controls, directly or indirectly, at least 25 per cent of the shares or interests or may appoint, directly or indirectly, more than half of the members of the board of directors.

 

 

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OBJECT OF BUSINESS

Art. 278. (1) The object of business of the holding company may be:

1. acquisition, management, valuation and sale of participations in Bulgarian and foreign companies;

2. acquisition, management and sale of bonds;

3. acquisition, valuation and sale of patents, assignment of licences for the use of patents to companies in which the holding company participates;

4. financing of companies in which the holding company participates.

(2) The holding company may not:

1. participate in a company which is not a legal person;

2. acquire licenses not intended for use in the companies it controls;

3. acquire immovable property not necessary for its service. The acquisition of shares in real estate companies is allowed.

 

 

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TAXATION OF HOLDING ACTIVITIES

Art. 279. (amend. - SG 59/1996)

 

 

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HOLDING COMPANY CREDITS

Art. 280. (1) A holding company may grant loans only to companies in which it has a direct interest or controls.

(2) The amount of amounts granted may not exceed 10 times the amount of the holding company's capital.

(3) The amount of deposits from subsidiaries and enterprises in the holding company may not be 3 times the amount of the capital.

 

Section III.

EUROPEAN ECONOMIC INTEREST GROUPING (NEW - SG 104/07)

 

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LEGAL STATUS

Art. 280a. (New, SG 104/07) (1) A European Economic Interest Grouping within the meaning of Council Regulation (EEC) No 2137/85 on the European Economic Interest Grouping (EEIG), hereinafter referred to as "Regulation (EEC) No 2137/85", having its registered office in the Republic of Bulgaria, shall be a legal person and shall come into existence on the day of its entry in the commercial register. Subdivisions in the Republic of Bulgaria of European Economic Interest Groupings with their registered office in another country shall also be entered in the commercial register.

(2) Article 70 shall apply accordingly to a European Economic Interest Grouping registered in the Republic of Bulgaria.

(3) The members of an association incorporated in the Republic of Bulgaria shall be liable for the obligations of the association under the rules for a general partnership, in so far as Regulation (EEC) No 2137/85 does not provide otherwise.

(4) No transfer of the registered office of the association to another State may take place where the association owns land in the Republic of Bulgaria. This prohibition shall apply in accordance with the conditions resulting from the accession of the Republic of Bulgaria to the European Union.

 

 

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TERMINATION

Art. 280b. (New, SG 104/07) (1) A European Economic Interest Grouping may be dissolved on the grounds provided for in Article 32 of Regulation (EEC) No 2137/85 by the district court of its seat. The association may also be dissolved by the court on the action of a public prosecutor where its activities violate public order in the Republic of Bulgaria.

2. A European Economic Interest Grouping may be subject to insolvency proceedings under Part Four, but Article 610 shall not apply to its members.

3.  

(3) Where a member of the association with its registered office in the Republic of Bulgaria is in liquidation or is declared bankrupt, its participation in the association shall be terminated by the liquidator or the receiver, as the case may be.

 

Chapter Nineteen.

EUROPEAN COMPANY (NEW - SG 104/07)

 

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ESTABLISHMENT

Art. 281. (amend. - SG 42/05, new - SG 104/07) (1) A European company within the meaning of Council Regulation (EC) No 2157/2001 on the Statute for a European Company (SE), hereinafter referred to as "Regulation (EC) No 2157/2001", with its registered office in the Republic of Bulgaria, shall be established by merger or transformation of a public limited liability company with its registered office in the Republic of Bulgaria into a European company and shall be entered in the Commercial Register.

(2) The registered office of a European company referred to in par. (1) shall be the locality where the management of its activities is situated.

(3) A European company with its registered office in another Member State may not be established by merger where the converting company with its registered office in the Republic of Bulgaria owns land. A European company with its registered office in the Republic of Bulgaria which owns land may not transfer its registered office to another Member State. This prohibition shall apply in accordance with the conditions resulting from the accession of the Republic of Bulgaria to the European Union.

 

 

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EDITOR

Art. 282. (amended, SG No. 42/2005, new, SG No. 104/2007) (1) Where a company with its registered office in the Republic of Bulgaria participates in the formation of a European company by way of merger, the registration officer at the Registry Agency shall appoint a verifier under Art. 22, par. 1 and Article 32(4) of Regulation (EC) No 2157/2001.

(2) Where a public limited liability company with its registered office in the Republic of Bulgaria is converted into a European company or a European company with its registered office in the Republic of Bulgaria is converted into a public limited liability company, the registration officer of the Registry Agency shall appoint a verifier pursuant to Article 37(6) and Article 66(5) of Regulation (EC) No 2157/2001.

(3) In the cases referred to in par. 1 and 2, Art. 262l, para. 3.

 

 

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TERMINATION

Art. 283. (amend. - SG 19/03, new - SG 104/07) A European company shall be dissolved by a decision of the court of its seat at the request of the public prosecutor if the company no longer meets the requirements of Article 7 of Regulation (EC) No 2157/2001. The company shall be dissolved only if the infringement is not remedied within an appropriate period to be fixed by order of the court.

 

Chapter Twenty.

ADMINISTRATIVE PROVISIONS

 

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INFRINGEMENTS AND FINES

Art. 284. (1) (amend. - 103 of 1993, amend. - SG 84/00, amend. - SG 38/06, in force as of 01.07.2007, amend. on entry into force - SG 80/06)

(2) (amend. - SG 38/06, in force as from 01.07.2007, amended as regards entry into force - SG 80/06)

(3) (Amended, repealed and supplemented as from 31.12.2006, Art. - SG 38/06, in force as from 01.07.2007, amended as regards entry into force - SG 80/06)

(4) (new - SG 84/00, suppl. - (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) (4) - SG No 38 of 2006, in force as from 01.07.2007, as amended by the entry into force - SG No 80 of 2006, as supplemented by SG No 80 of 2006, as amended by SG No 84 of 2000, in force as from 01.07.2007 - (SG 104/07) A person who is obliged under this Act but fails to indicate in his commercial correspondence and on his website, if any, the data referred to in Article 13 shall be punished by a fine of BGN 100 to BGN 500. The same penalty shall be imposed on a person who fails to indicate the particulars referred to in Article 25 of Regulation (EEC) No 2137/85.

(5) (new, SG 101/10) Persons who fail to fulfil their obligations under Article 179(2) shall be liable to a fine of BGN 100 to 500.

(6) (former para. 4 - SG 84/00, former para. 5, amend. - (5, SG 101/10) Violations shall be established by acts drawn up by officials appointed by the Executive Director of the Registry Agency, and the penalty decrees shall be issued by the Executive Director of the Agency or by officials authorised by him.

(7) (new - SG 101/10) The establishment of offences, the issuance, appeal and execution of the penalty decrees shall be carried out in accordance with the Administrative Offences and Penalties Act.

 

 

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Art. 285. (new - SG 103/1993) (1) For failure to comply with the obligation under Art. 3 shall be imposed on the trader a fine, respectively a pecuniary sanction, in the amount of BGN 50.

(2) The acts for the detected violations shall be drawn up by the mayors of the settlements, and the penalty decrees shall be issued by the mayors of the municipalities or by persons designated by them.

(3) Establishment of offences, issuance, appeal and execution of the penalty decrees shall be carried out in accordance with the Administrative Offences and Penalties Act.

 

Part Three.

COMMERCIAL TRANSACTIONS (NEW, SG NO. 83/1996)

Chapter Twenty-one.

GENERAL PROVISIONS

Section I.

GENERAL PROVISIONS

 

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DEFINITION OF COMMERCIAL TRANSACTION

Art. 286. (New, SG No. 83/1996) (1) A commercial transaction shall be a transaction entered into by a trader which is connected with the trade which he carries on.

(2) The transactions referred to in Art. (1), irrespective of the capacity of the persons carrying them out.

(3) In case of doubt, the transaction carried out by the trader shall be deemed to be related to his trade.

 

 

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APPLICABILITY OF THE PROVISIONS ON COMMERCIAL TRANSACTIONS

Art. 287. (New, SG No. 83/1996) The provisions on commercial transactions shall apply to both parties when the transaction is commercial for one of them and it does not follow otherwise from this Act.

 

 

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SOURCES

Art. 288. (New, SG No. 83/1996) The provisions of the civil law shall apply to commercial transactions not regulated by this Law, and in case of incompleteness in this Law, the commercial customs shall also apply. In case of differences in commercial customs, the customs of the place of performance shall apply.

 

 

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ABUSE OF RIGHT

Art. 289. (New, SG No. 83/1996) The exercise of a right on the basis of a commercial transaction shall be inadmissible if it is carried out with the sole intention of harming the other party.

 

Section II.

CONCLUSION OF A COMMERCIAL TRANSACTION

 

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PUBLIC INVITATION

Art. 290. (New, SG No. 83/1996) (1) Catalogues, price lists, tariffs and the like, as well as announcements through the mass media or otherwise addressed to an unspecified number of persons shall be deemed to be an invitation to make a proposal in accordance therewith.

(2) If the proposal referred to in sub-section (1) of this section (1) is not accepted without good reason, the person making the invitation shall be liable for the damages suffered by the offeror.

 

 

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PUBLIC PROPOSAL

Art. 291. (New, SG No. 83/1996) An offer to conclude a transaction may be made to an indefinite number of persons, including through the mass media. It shall also contain the total amount offered and the time limit for acceptance of the offer. In this case, the offeror is bound until the quantity is exhausted within the time limit.

 

 

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SILENCE TANTAMOUNT TO ACCEPTANCE

Art. 292. (New, SG No. 83/1996) (1) An offer made to a trader with whom the offeror has an established commercial relationship shall be deemed to be accepted if it is not immediately rejected.

(2) In the event of rejection of an offer under par. (1), the trader shall be obliged to keep the offer sent to him at the expense of the offeror, unless he has secured security for the costs or unless keeping it causes more than the usual inconvenience.

 

 

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FORM

Art. 293. (New, SG No. 83/1996) (1) For the validity of a commercial transaction, a written or other form shall be necessary only in the cases provided by law.

(2) A statement on the conclusion, on the execution or on the termination of a commercial transaction shall be null and void if it is not made in the form prescribed by law or by the parties.

(3) A party may not plead nullity if it can be inferred from his conduct that he did not dispute the validity of the statement.

(4) The written form shall be deemed to have been complied with if the statement is technically recorded in a manner which enables it to be reproduced.

(5) In the case of statements made by telegraph or telex, the written form shall be deemed to have been complied with if the books and records reflecting the operation of such apparatus exclude an inaccurate reproduction of the statement.

(6) Where a particular form is prescribed for the conclusion of a commercial transaction, it shall also apply to amendments to the transaction.

 

 

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LIHWI

Art. 294. (New, SG No. 83/1996) (1) Interest shall be payable between merchants unless otherwise agreed.

(2) Interest on interest shall be payable only if agreed.

 

 

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PERMISSION OR APPROVAL FROM A PUBLIC AUTHORITY

Art. 295. (1) Where the validity of a commercial transaction requires the authorisation or approval of a State authority, the transaction shall take effect upon the granting thereof.

(2) The party who has undertaken to seek the permission or approval shall immediately exercise the usual care and bear the costs involved and notify the other party of the result.

 

 

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CONFIRMATION BY A THIRD PARTY

Art. 296. (New, SG No. 83/1996) (1) If a transaction is entered into subject to confirmation by a third party, it shall take effect upon confirmation.

(2) The party obliged to take care of the confirmation shall immediately notify the other party of the result.

(3) If the other party is not notified of the result within three months after the conclusion of the transaction, it may withdraw from the transaction where no other period has been agreed.

 

 

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EXTREME NECESSITY

Art. 297. (New, SG No. 83/1996) A commercial transaction concluded between traders may not be avoided on the grounds of extreme necessity and manifestly unfavourable conditions.

 

 

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COMMERCIAL TRANSACTION ON GENERAL TERMS

Art. 298. (New, SG No. 83/1996) (1) A trader may establish in advance general terms and conditions for transactions concluded by him. They shall become binding on the other party when he:

1. states in writing that he accepts them;

2. is a trader and knew them or was bound to know them and did not immediately dispute them.

(2) Where the validity of the transaction is subject to a written form, the general terms and conditions established by the trader shall be binding on the other party only if they have been delivered to him at the time of conclusion.

(3) In the event of a discrepancy between what has been agreed by the parties and the general terms and conditions, what has been agreed shall prevail.

 

 

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DETERMINATION OF THIRD PARTY STIPULATIONS

Art. 299. (New, SG No. 83/1996) (1) Where the parties have provided for a third party to determine individual stipulations, they shall become binding on the parties only if the third party has determined them in accordance with the purpose of the contract, with the rest of its contents and with the commercial custom.

(2) If the third party fails to make the determination or makes it inconsistently with par. (1), either party may request the court to make the determination.

 

 

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COMPLETION OF THE CONTRACT BY THE COURT

Art. 300. (New, SG No. 83/1996) Where the parties agree, upon the occurrence of certain circumstances, to supplement the contract and upon their occurrence they cannot reach agreement, either of them may request the court to do so. In making its decision, the court shall have regard to the purpose of the contract, its other contents and commercial usage.

 

 

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ACTIONS WITHOUT REPRESENTATIVE AUTHORITY

Art. 301. (new, SG No. 83/1996) Where a person acts on behalf of a trader without representative authority, the trader shall be deemed to confirm the action if he does not object immediately after becoming aware of it.

 

Section III.

EXECUTION

 

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DUE CARE

Art. 302. (New, SG No. 83/1996) The debtor in a transaction which is commercial for him shall exercise the care of a good trader.

 

 

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PERIOD

Art. 303. (New, SG No. 83/1996) Where the contract does not specify the time limit for performance of the obligation, if the nature of the transaction or commercial custom does not otherwise require, performance may be demanded and performed at any time during business hours at the place of performance.

 

 

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TIME LIMIT FOR MONETARY OBLIGATIONS

Art. 303а. (New, SG No. 20/2013) (1) The parties to a commercial transaction may agree on a time limit for performance of a monetary obligation not exceeding 60 days. Exceptionally, a longer period may be agreed upon where the nature of the goods or services or another important reason so requires, provided that this does not constitute a manifest abuse of the creditor's interest and does not prejudice good morals.

(2) Where the debtor is a public contracting authority, the parties may agree on a time limit for performance of a monetary obligation not exceeding 30 days. Exceptionally, a longer period may be agreed, but not more than 60 days, where the nature of the goods or services or another important reason so requires, if this does not constitute a manifest abuse of the creditor's interest and does not prejudice good morals.

(3) If no time limit for payment has been agreed, the monetary obligation must be fulfilled within 14 days of receipt of an invoice or other request for payment. Where the day of receipt of the invoice or invitation to pay cannot be ascertained, or where the invoice or invitation to pay is received before receipt of the goods or services, the period shall begin to run on the day following the day of receipt of the goods or services, notwithstanding that the invoice or invitation to pay pre-dates that day.

(4) Where the contract or law provides for the inspection or acceptance of the goods or services, the period referred to in sub-paragraph (1) shall not apply to the goods or services. (3) shall begin to run on acceptance or on completion of the examination if the invoice or invitation to pay is received before that time. The period for examination or acceptance shall be 14 days from receipt of the goods or services. Exceptionally, a longer period for examination or acceptance may be agreed where the nature of the goods or services or another important reason so requires.

(5) The provisions of par. 1-4 shall not apply to:

1. promissory notes;

2. obligations in open insolvency proceedings;

3. damages, including insurance claims.

(6) The rules referred to in this Article shall also apply to transactions to which craftsmen and persons performing services with personal labour or exercising a liberal profession are parties.

 

 

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SOLIDARITY

Art. 304. (New, SG No. 83/1996) Persons who, when entering into a commercial transaction, assume a common obligation shall be deemed joint and several debtors, unless it follows otherwise from the transaction.

 

 

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CASHLESS PAYMENT

Art. 305. (New, SG No. 83/1996, amend. - Where payment is made by debiting and/or crediting an account, it shall be deemed to be completed by crediting the creditor's account or by paying in cash the amount of the creditor's obligation.

 

Section IV.

DEFAULT

 

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FORCE MAJEURE

Art. 306. (New, SG No. 83/1996) (1) The debtor in a commercial transaction shall not be liable for the default caused by force majeure. If the debtor has been in default, he may not plead force majeure.

(2) Force majeure is an unforeseen or unavoidable event of an extraordinary nature occurring after the conclusion of the contract.

(3) The debtor who cannot fulfil his obligation due to force majeure shall, within an appropriate period of time, notify the other party in writing of the nature of the force majeure and its possible consequences for the performance of the contract. In the event of failure to notify, compensation shall be payable for the resulting damage.

(4) As long as the force majeure lasts, the performance of the obligations and of the related counter obligations shall be suspended.

(5) If the force majeure lasts so long that the creditor no longer has an interest in performance, he shall be entitled to terminate the contract. The debtor also has this right.

 

 

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ECONOMIC IMPOSSIBILITY

Art. 307. (New, SG No. 83/1996) The court may, on the application of one of the parties, modify or terminate the contract in whole or in part where circumstances have arisen which the parties could not and were not bound to foresee and the preservation of the contract is contrary to justice and good faith.

 

 

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NOTICE

Art. 308. (New, SG No. 83/1996) (1) If a party has given or promised something when concluding a contract, in case he reneges, he may cancel the contract if its performance has not begun. The party who has repudiated is bound to pay the repudiation, and if he has given it when the contract was made, he forfeits it.

(2) When the contract is performed, the set-off shall be returned or set off. It shall also be returned on termination of the contract by mutual consent.

 

 

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NEUSTOIKA

Art. 309. (New, SG No. 83/1996) No penalty payable under a commercial transaction concluded between merchants may be reduced for excessiveness.

 

 

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FAILURE TO FULFIL A MONETARY OBLIGATION

Art. 309а. (New, SG No. 20/2013) (1) Where the creditor has fulfilled his obligations and the debtor is in default of payment, unless otherwise agreed, the creditor shall be entitled to compensation in the amount of the statutory interest from the day of default, as well as to compensation for the costs of collection in the amount of not less than BGN 80, without the need for a summons. The creditor may claim compensation for actual damages suffered and collection costs incurred in a higher amount in accordance with the general rules.

(2) Where an instalment payment has been agreed, the compensation referred to in par. (1) shall be due accordingly for the instalments which have been delayed.

(3) Limitation of liability under par. (1) and (2) may be agreed only if this does not constitute a manifest abuse of the creditor's interest and does not prejudice good morals. A limitation of liability shall be void where the debtor is a public contracting authority.

Section V.

COMMERCIAL COLLATERAL

 

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COMMERCIAL PLEDGE

Art. 310. (New, SG No. 83/1996) (1) A commercial pledge agreement securing rights arising from a commercial transaction shall be deemed to have been concluded:

1. in the case of a pledge of movable property and of a bearer security - by its delivery to the creditor or on his behalf to another person;

2. in the case of a pledge of a promissory note, by means of a giro for security and its delivery to the creditor.

(2) Creditors shall have the right to pledge by law in the cases provided for in this Act.

(3) By transfer of the secured claim, the pledge shall be deemed to have been transferred when its object is delivered, unless the transferor has agreed to hold it as another person within the meaning of par. (1) (1).

 

 

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SATISFACTION OF THE PLEDGEE

Art. 311. (New, SG No. 83/1996) (1) Where the pledge agreement has been concluded in writing of a reliable date and the parties have agreed that, if the debtor defaults, satisfaction of the pledge shall be effected without judicial intervention, the creditor shall have the right to sell the pledged item or security himself if it has a market or stock exchange price. The creditor shall immediately notify the pledgor of the sale and shall deliver to him the balance of the price received.

(2) The rights under par. (1) shall also have the creditors referred to in Article 310, paragraph 2.

 

 

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PLEDGE WITHOUT DELIVERY OF POSSESSION

Art. 312. (New, SG No. 83/1996) In cases and in accordance with the procedure established by law, the pledgor may retain possession of the pledged property.

 

 

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PLEDGE OF PERISHABLE PROPERTY

Art. 313. (New, SG No. 83/1996) If the pledged thing is subject to rapid deterioration, the creditor may sell it, if the thing has a market or stock exchange price, and deposit the amount in a bank as his security. The creditor must immediately notify the pledgor of the sale.

 

 

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SET-OFF OF THE FRUITS OF THE PLEDGED PROPERTY

Art. 314. (New, SG No. 83/1996) Where the thing pledged bears fruit, the pledge agreement may provide for the right of the creditor to collect the fruit on account of the obligation.

 

 

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COMMERCIAL LIEN

Art. 315. (New, SG No. 83/1996) (1) A merchant shall have a lien for his claim against another merchant from a transaction concluded between them on the movables and securities of the debtor lawfully obtained by him. This right exists as long as the trader has the movables and securities in his possession.

(2) The right of retention shall also exist where:

1. the ownership of the goods has passed to the creditor, but he must transfer it back;

2. the ownership of the goods has been transferred to a third party for the debtor to the creditor, but the creditor has to transfer it back to the debtor.

(3) The right of retention shall also have effect in respect of third parties in so far as they may be opposed to any objections which the creditor has to the debtor's claim to surrender the property.

(4) The right of retention shall lapse if the debtor has ordered otherwise until the delivery of the thing or the creditor has undertaken to deal with it in a certain manner.

(5) The right of retention may also be exercised in respect of unliquidated claims:

1. if the debtor is in insolvency proceedings;

2. if an unsuccessful enforcement action has been taken against the debtor.

(6) The right of retention shall be retained if the debtor has ordered otherwise until the delivery of the property or the creditor has undertaken to deal with it in a certain manner, once the circumstances referred to in paragraph (5) have become known to the creditor after the delivery of the property.

Section VI.

TRANSFER OF RIGHTS

 

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TRANSFER OF SECURITIES ON PROMISSORY NOTES

Art. 316. (New, SG No. 83/1996) (1) An order issued on promissory note, which is addressed to a trader for payment of money, delivery of securities or other fungible things, without therein making the execution contingent upon counter-execution, may be transferred by giro. The same shall apply to documents of obligations issued by a merchant on a promissory note for goods of the kind mentioned, without in them performance being conditional upon counter-performance.

(2) Bills of lading, bills of lading, warehouse bills, sea loan bills and transport insurance policies may also be transferred by giro when issued to order.

 

 

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OPERATION OF THE GIRO

Art. 317. (New, SG No. 83/1996) (1) A giro shall transfer all rights under the giro security.

(2) The debtor shall owe performance only against delivery of the security with an indication on it that the obligation for which it was issued has been paid.

(3) The form of the giro, the legitimation of the holder and the verification of the legitimation, and the obligation of the holder to surrender the security, shall be subject to the provisions of the bill of exchange respectively.

 

Chapter Twenty-two.

COMMERCIAL SALE

Section I.

GENERAL

 

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DEFINITION

Art. 318. (New, SG No. 83/1996) (1) A sale shall be a commercial sale which, according to the provisions of this Law, is a commercial transaction.

(2) A sale which has as its object a thing for personal consumption and the buyer is a natural person shall not be commercial.

 

 

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PERIOD FOR DELIVERY

Art. 319. (New, SG No. 83/1996) Where no time limit has been agreed for the delivery of the goods, the buyer may also demand delivery within a reasonable time.

 

 

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OBLIGATION TO NOTIFY

Art. 320. (New, SG No. 83/1996) Where it has been agreed that the goods shall be received at the seller's warehouse, the parties shall determine within what time limits and in what manner the seller shall notify the buyer that the goods are ready for delivery. If this is not specified, the notification shall be made at least three days before the day of delivery and, if the parties are in different localities, at least five days before that day.

 

 

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DOCUMENTS RELATING TO THE GOODS

Art. 321. (New, SG No. 83/1996) At the request of the buyer, the seller shall be obliged to issue an invoice and, if the parties agree, other documents.

 

 

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SERVICE

Art. 322. (New, SG No. 83/1996) The seller shall provide the necessary service according to commercial practice, unless otherwise agreed.

NOTICE

Art. 323. (New, SG No. 83/1996) If a sale is rescinded and within a reasonable time after the rescission the buyer has bought replacement goods or the seller has resold the goods, the party seeking compensation may receive the difference between the sale price and the price of the replacement transaction as well as compensation.

REVIEW OF THE GOODS

Art. 324. (New, SG No. 83/1996, amended, SG No. 20/2013) The buyer shall inspect the goods and, if they do not meet the requirements, shall immediately notify the seller. If the buyer fails to do so, the goods shall be deemed to be approved as conforming except for latent defects.

DUTY OF CARE

Art. 325. (New, SG No. 83/1996) (1) Where the buyer refuses to accept goods sent from another place, he shall keep them with the care of a good trader during the time normally necessary for the seller to give his instructions. If the seller is in default, the buyer may hand over the goods to a third party for safekeeping by notifying the seller.

(2) If the goods are subject to rapid deterioration or custody and involve considerable expense or inconvenience, the buyer may sell them at the seller's expense.

(3) Where no orders have been given under par. (1), the buyer shall be liable only for intent or gross negligence.

DETERMINATION OF PRICE

Art. 326. (New, SG No. 83/1996) (1) The price shall be determined by the parties at the conclusion of the contract.

(2) If the price is not fixed and it is not agreed how it is to be fixed, the parties shall be deemed to have agreed to the price normally payable at the time of the conclusion of the sale for the same kind of goods in similar circumstances.

(3) Where the price is calculated according to the weight of the goods, the weight of the packaging shall be deducted. This rule also applies where a preservative other than the goods is used to preserve them.

TIME OF PAYMENT

Art. 327. (New, SG No. 83/1996) (1) The buyer shall pay the price upon delivery of the goods or of the documents entitling him to receive them, unless otherwise agreed.

(2) If the seller has undertaken to send the goods, he shall be entitled to require that this be done only on payment of the price or on production of evidence of payment thereof.

(3) (New, SG No. 20/2013) The general rules of Chapter Twenty-one shall apply accordingly to the time limits for payment.

DELAY IN RECEIPT

Art. 328. (New, SG No. 83/1996) (1) If the buyer is in default of receipt of the goods, the seller may:

1. deliver it for safekeeping;

2. sell it at market prices or at public auction, after giving the buyer notice thereof and informing him of the time and place of the sale or auction;

3. in the case of perishable goods, to sell them without notice.

(2) The surrender for safekeeping and the sales under par. 1 shall be at the expense and risk of the purchaser.



Section II.
SPECIAL RULES FOR CERTAIN SALES

TRANSIT SALE

Art. 329. (New, SG No. 83/1996) (1) The parties may agree that the seller shall hand over the goods to a third person designated by the buyer.

(2) The seller shall notify the buyer of the dispatch of the goods to the third person, sending him also a copy of the documents accompanying the goods.

(3) The price may also be paid by the third party.


APPORTIONMENT OF THE COSTS OF DELIVERY OF THE GOODS

Art. 330. (New, SG No. 83/1996) (1) If goods are to be shipped to a place other than the place of delivery, the costs of shipment and carriage shall be borne by the buyer.

(2) The seller shall be presumed to have borne the costs of loading and carriage if the delivery is arranged ex works at a place other than the place of delivery.

(3) The costs of shipment and carriage, and the allocation of other costs in connection with the performance of the contract, may be determined by reference to general conditions drawn up by international and other institutions.

SALE WITH ADDITIONAL SPECIFICATION

Art. 331. (New, SG No. 83/1996) The parties may agree on a time limit within which the buyer may specify the object of the sale. If the buyer is in default, the seller may do so or cancel the contract.

SALE WITH PERIODIC PERFORMANCE

Art. 332. (New, SG No. 83/1996) In the case of a sale with periodical performance, if the parties have agreed that the seller may perform before the due date, the amount overpaid during the preceding period shall be deducted from the amount due.


A SALE WITH AN AGREEMENT TO BUY

Art. 333. (New, SG No 83/1996) A sale with a buy-back clause shall be in writing and shall specify the period within which the right of buy-back may be exercised. After the expiry of the period, the right of redemption shall lapse.

SALE WITH ADVANCE PAYMENT OF THE PRICE

Art. 334. (New, SG No 83/1996) The agreement for the prepayment of the price shall be in writing. If the seller fails to deliver the goods, he shall be liable to interest from receipt of the price. In that case the price paid shall be deemed to be a deposit.

HIRE PURCHASE

Art. 335. (New, SG No. 83/1996) (1) An instalment sale shall be valid if made in writing.

(2) Failure to pay instalments not exceeding one fifth of the price of the goods shall not be grounds for rescission of the contract.

(3) If the sale is rescinded because of default by the buyer, the seller may also claim damages.

SALE BY TRANSFER OF A SECURITY

Art. 336. (New, SG No. 83/1996) In the case of a sale of goods by transfer of a security, the seller shall be released from the obligation to deliver the goods by transferring the security to the buyer. The buyer shall be obliged to pay the price at the time and place where the documents are delivered, unless otherwise agreed.



Section III.
SALE BY PUBLIC AUCTION WITH OPEN BIDDING

PUBLIC

Art. 337. (New, SG No. 83/1996) The seller shall give publicity to the conditions of the auction by announcing them in at least one daily newspaper.

BINDING FORCE OF THE OFFER

Art. 338. (New, SG No. 83/1996) The bidder shall be bound by his bid according to the terms of the auction.

AWARD OF THE GOODS

Art. 339. (new, SG No 83/1996) The person who directs the bidding shall award the goods to the highest bidder. The sale shall be deemed to be concluded when the goods have been awarded.

PAYMENT

Art. 340. (New, SG No 83/1996) The buyer shall be obliged to pay the price immediately, unless otherwise provided in the conditions of the auction. The seller may withdraw from the contract if the buyer fails to fulfil this obligation.

DESTRUCTION OF THE SALE

Art. 341. (New, SG No. 83/1996) An auction sale concluded as a result of acts contrary to the law or to good morals may be declared void at the request of any interested party within ten days of the award. In the event of a claim for payment of the price, the purchaser may request the annulment of the sale by way of objection.

Chapter Twenty-three.
CONTRACT OF LEASE

ORDER

Art. 342. (New, SG No. 83/1996) (1) By the leasing contract the lessor undertakes to grant for use an item for a consideration.

(2) By the financial leasing contract the lessor undertakes to acquire an item from a third party on terms and conditions determined by the lessee and to provide it to the lessee for use in return for consideration.

(3) The lessee may acquire the item during the term of the contract or after its expiry.

RISK

Art. 343. (New, SG No. 83/1996) The risk of accidental loss of or damage to the thing under the finance lease shall be borne by the lessee.

OBLIGATIONS OF THE LESSOR

Art. 344. (New, SG No. 83/1996) (1) The lessor shall have the obligations of a lessor pursuant to Article 230 of the Obligations and Contracts Act.

(2) The lessor under the finance lease shall be obliged to transfer his rights against the third party together with the transfer of the ownership of the thing.


OBLIGATIONS OF THE LESSEE

Art. 345. (New, SG No. 83/1996) (1) The lessee shall have the obligations of a lessee pursuant to Article 232 and Article 233, paragraph 2 of the Law on Obligations and Contracts, as well as the obligation to return the item upon expiry of the contract.

(2) The lessee shall bear the costs of maintaining the item.

SUBLISING

Art. 346. (New, SG No. 83/1996) The lessee may grant the use of the thing to another with the consent of the lessor.

TRANSFER

Art. 347. (New, SG No. 83/1996) (1) The rules of this Chapter shall apply accordingly to the leasing of an undertaking.

(2) (amend. - SG 92/07) The rules of the lease contract shall apply accordingly to the lease contract, with the exception of Art. 229, par. 3, Art. 231, par. 1 and 2, Art. 233 para. 1, Art. 235, Art. 236 para. 237, 238 and 239 of the Obligations and Contracts Act.

Chapter twenty-four.
COMMISSION CONTRACT

DEFINITION

Art. 348. (New, SG No. 83/1996) (1) By a commission contract, the commission agent undertakes, for a consideration, to carry out one or more transactions on behalf and for the account of the principal.

(2) The provisions of the commission contract shall apply accordingly to the relationship between the principal and the commission agent, insofar as this Chapter does not provide otherwise.

ACTION

Art. 349. (New, SG No. 83/1996) (1) In a transaction concluded with a third party in the performance of an order, the rights and obligations arise for the commission agent also when he has communicated to the third party the name of the principal.

(2) Rights acquired by the commission agent or conferred on him by the trustee shall be deemed, as against the commission agent's creditors, to be rights of the trustee even without having yet been conferred on him.

(3) The commission agent shall perform the obligations and exercise the rights arising from the transaction with the third party.

(4) The trustee may exercise the rights and be compelled to perform the obligations towards the third party only after the commissioner has transferred them.

OBLIGATIONS OF THE COMMISSION AGENT

Art. 350. (New, SG No. 83/1996) (1) The commission agent shall execute the order with the care of a good trader.

(2) If the commission agent performs the order on terms more advantageous than those established by the principal, the advantage shall belong to the principal.

(3) On receipt of goods from another place, the commission agent must examine them immediately after receipt and, if he finds any defects or shortages, he must immediately notify the principal and secure the necessary evidence.

(4) If there is any change in the goods which would depreciate their value, and if there is no time to wait for an order from the trustee, or if the trustee is delayed, the commission agent may sell them at a price lower than that which the trustee has ascertained, so long as by so doing he protects the trustee from greater damage.

(5) The commission agent is obliged to insure the goods which he has received from the trustee or from the third party in the executory transaction if the trustee has so ordered.

DEVIATION FROM THE ORDER

Art. 351. (New, SG No. 83/1996) (1) If the commission agent deviates from the order, the trustee shall not be obliged to recognise the transaction as having been carried out on his account and may claim compensation. This rule shall not apply where the deviation was in the interest of the principal and the commission agent could not have requested new orders from him beforehand or did not receive a timely reply to his request.

(2) A commission agent who sells at a price lower than, or buys at a price higher than, the price fixed by the trustee must immediately notify the trustee. If the trustee does not immediately withdraw from the transaction, he is deemed to have approved it.

(3) Where the commission agent gives notice that he accepts the difference in price, the trustee is not entitled to withdraw from the transaction.

(4) The trustee shall not be entitled to withdraw from the transaction, even though the commission agent has not indicated his willingness to pay the difference in price, if the commission agent establishes that it was not possible to carry out the transaction at the price established by the trustee and that by carrying out the transaction he has protected the trustee from greater damage.

NOTIFICATION TO THE TRUSTEE

Art. 352. (New, SG No. 83/1996) (1) If the third party fails to fulfil his obligations, and if damage is caused by anyone to the property acquired or held by the commission agent on behalf of the trustee, the commission agent shall immediately notify the trustee and provide the necessary evidence.

(2) The trustee, upon receiving notice that the third person has breached his obligations under the executory transaction, shall be entitled to require the commission agent to assign his rights to that person forthwith.

TRANSACTION ON CREDIT

Art. 353. (New, SG No. 83/1996) The commission agent who is authorised to conclude a transaction on credit shall be liable to the principal for the performance of the obligations by the third party if he knew or ought to have known that the third party was unable to pay.

COMMISSION AGREEMENT DELCREDERE

Art. 354. (New, SG No. 83/1996) If the commission agent has guaranteed to the trustee the obligation of the third party, he shall be jointly and severally liable with the third party and shall be entitled to separate remuneration.

GIVING AN ACCOUNT

Art. 355. (New, SG No. 83/1996) The commission agent shall be obliged to give an account to the trustee and to transfer to him the results of the execution transaction.

OBLIGATIONS OF THE TRUSTEE

Art. 356. (New, SG No. 83/1996) (1) The principal shall be obliged to accept from the commission agent the results of the execution transaction, to inspect the goods acquired for him and to notify him immediately of any defects or shortcomings found and to assume the obligations which the commission agent has assumed towards the third party.

(2) The principal is obliged to pay the commission agent the costs incurred for the execution of the order and the agreed remuneration. Where no remuneration has been agreed, the usual remuneration shall be due.

LIEN OF THE COMMISSION AGENT

Art. 357. (New, SG No. 83/1996) The commission agent shall have a lien on the property which he has acquired on behalf of the principal or which the principal has delivered to him.

ENTRY INTO THE EXECUTORY TRANSACTION

Art. 358. (New, SG No. 83/1996) (1) Where the object of the order is the purchase or sale of goods or securities which have a market or exchange price, the commission agent may state that he personally sells to the principal or buys from him the goods or securities at that price. In this case the amount of the consideration shall be reduced by half.

(2) The commission agent shall be deemed to be a party to the sale if he has communicated to the trustee the execution of the order without naming the third party.

REFUSAL OF THE COMMISSION AGENT

Art. 359. (New, SG No. 83/1996) (1) Unless otherwise provided for in the contract, the commission agent shall not be entitled to refuse the execution of the accepted order, except in case of termination of the contract due to non-performance by the principal. Termination shall be in writing and the commission contract shall remain in force for two weeks from the day on which the commission agent received the commission agent's notice of refusal to execute the order.

(2) If the commission agent refuses to execute the order due to a breach of the commission contract by the principal, the commission agent shall be entitled to receive commission remuneration and compensation for expenses incurred.

(3) The commission agent who is aware of the commission agent's refusal to execute the commission shall, within one month from the day on which he was notified of the refusal, dispose of his property in the commission agent's possession.

(4) If the trustee fails to dispose of the property in the possession of the commission agent within that period, the commission agent shall be entitled to give such property for safekeeping at the expense of the trustee or, with a view to meeting his claims against the trustee, to sell such property at the most advantageous prices for the trustee.

WITHDRAWAL OF THE ORDER

Art. 360. (New, SG No. 83/1996) If the trustee withdraws the order in whole or in part before the commission agent has concluded the relevant transactions with third parties, he shall be obliged to pay the commission agent the remuneration and expenses in connection with the transactions concluded by him until the withdrawal. In this case, the trustee has the obligation under Art. 359 para. 3.

Chapter twenty-five.

FORWARDING CONTRACT

DEFINITION

Art. 361. (New, SG No. 83/1996) (1) By a forwarding contract the freight forwarder undertakes, for a consideration, to conclude in his own name, on behalf of the principal, a contract for the carriage of cargo.

(2) The provisions of the commission contract shall apply accordingly to matters not provided for in this Chapter.

FREIGHT FORWARDER-CARRIER

Art. 362. (New, SG No. 83/1996) The freight forwarder may carry out the carriage himself in whole or in part. In this case he shall also have the rights and obligations of the carrier.

MULTIPLE FORWARDING AGENTS

Art. 363. (New, SG No. 83/1996) The freight forwarder may entrust a subsequent freight forwarder with the performance of the acts referred to in Article 361 without being authorised to do so by the principal.

NOTIFICATION OBLIGATIONS

Art. 364. (New, SG No. 83/1996) (1) The principal shall notify the freight forwarder of the particulars of the cargo.

(2) If the packaging of the cargo is unsuitable for carriage, the freight forwarder shall warn the principal thereof.

COMPLIANCE WITH THE FREIGHT FORWARDER'S INSTRUCTIONS

Art. 365. (New, SG No. 83/1996) (1) The freight forwarder shall comply with the instructions of the principal as to the route, direction and manner of carriage, as well as as to the selection of carriers and subsequent forwarders.

(2) If the freight forwarder deviates from the instructions of the principal, he shall be liable for damages unless he proves that they would have occurred even if he had complied with the instructions.

LIMITATION PERIOD

Art. 366. (New, SG No. 83/1996) A claim for damages under a forwarding contract shall be time-barred for one year.

 

Chapter Twenty-six.

CONTRACT OF CARRIAGE

DEFINITION

Art. 367. (New, SG No. 83/1996) By the contract of carriage, the carrier undertakes to carry, for consideration, a person, luggage or cargo to a specified place.

OBLIGATIONS OF THE CARRIER

Art. 368. (New, SG No. 83/1996) (1) The carrier shall carry out the carriage within the prescribed period, shall keep the goods from the time of acceptance until delivery, shall notify the consignee of the arrival of the goods and shall deliver them to him at the place of destination.

(2) Where no bill of lading has been issued, the carrier shall comply with the shipper's orders to return the cargo or to deliver it to another person if he has not delivered the cargo or the bill of lading.

 

OBLIGATIONS OF THE CARRIER IN THE CARRIAGE OF PASSENGERS

Art. 369. (New, SG No. 83/1996) The carrier shall provide the passenger with adequate facilities and security according to the type of vehicle and the distance.

OBLIGATIONS OF THE SHIPPER

Art. 370. (New, SG No. 83/1996) (1) The shipper shall be obliged to hand over the goods to the carrier in a condition suitable to withstand carriage, depending on their type and the particular requirements of the different types of goods.

(2) The shipper shall hand over to the carrier together with the cargo the documents necessary for the cargo to reach the consignee.

(3) Where the packaging is manifestly inadequate, the carrier may accept the cargo if the shipper declares in writing that the damage which would result is at his expense.

LOADING RECORD

Art. 371. (New, SG No. 83/1996) (1) The shipper may require the carrier to issue to him a bill of lading for the cargo delivered, which may be on demand.

(2) Where a bill of lading has been issued, the cargo shall be delivered to the lawful bearer of the bill of lading.

TRANSPORT CHARGES

Art. 372. (New, SG No. 83/1996) (1) The shipper shall pay the consideration at the conclusion of the contract, unless otherwise agreed.

(2) If the consideration is not paid by the shipper, it shall be paid by the consignee on acceptance of the cargo.

LIABILITY FOR SHORTAGES AND DAMAGE

Art. 373. (New, SG No. 83/1996) (1) The carrier shall be liable for the loss, destruction or damage of the goods, unless the damage is due to force majeure, to the qualities of the goods or to manifestly unsuitable packaging, if the shipper has given his consent pursuant to Art. 3.

(2) Under the conditions of par. 1, the carrier shall be liable for the damage due to delay in performance of the carriage.

(3) An agreement to discharge liability under par. 1 и 2.

(4) If lost cargo for which the consignee is indemnified is found, the carrier shall, after taking the necessary measures to preserve it, notify the consignee thereof in writing. If the latter accepts the cargo, he shall be liable for reimbursement of the compensation received. In the event of refusal, the carrier may sell the goods at his own expense.

(5) After receipt of the goods, the carrier shall only be liable if he has been notified of the damage not later than one month after receipt.

LIABILITY OF SUBSEQUENT CARRIERS

Art. 374. (New, SG No. 83/1996) (1) If the carrier carries out the carriage wholly or partly with the participation of other carriers, he shall be liable for their acts until delivery of the goods.

(2) Each subsequent carrier shall be subrogated to the contract and shall exercise the rights of the preceding carriers which are specified in the contract of carriage. All carriers shall be jointly and severally liable.

 

RIGHT OF LIEN

Art. 375. (New, SG No 83/1996) The carrier shall have a lien on the cargo for his claims under the contract. This right shall be exercised by the last carrier and shall exist until the rights of all carriers have been extinguished.

OBLIGATION TO KEEP THE CARGO

Art. 376. (New, SG No. 83/1996) If the consignee cannot be found at the specified address or refuses to accept the goods, the carrier shall be obliged to keep them or to hand them over to another for safekeeping, giving the shipper prompt notice. In the case of goods subject to perishable conditions, the rules for the sale of the goods in default of the creditor shall apply.

CARRIAGE OF LUGGAGE

Art. 377. (New, SG No. 83/1996) For the carriage of luggage the relevant rules for the carriage of goods shall apply.

LIMITATION PERIOD

Art. 378. (New, SG No. 83/1996) A claim for damages under the contract of carriage shall be time-barred by a limitation period of one year which shall begin to run:

1. in the case of cargo, from the day on which it is delivered to the consignee, or, where it is not delivered, from the day on which it should have been delivered to him;

2. in the case of passengers, in the case of death or bodily injury, from the time when it occurred or came to his knowledge, but not later than three years.

SPECIAL RULES

Art. 379. (New, SG No. 83/1996) Separate laws shall regulate the special rules for different types of carriage.

 

Chapter twenty-seven.

INSURANCE CONTRACT (AMEND. - SG 103/05, IN FORCE FROM 01.01.2006)

Section I.

GENERAL

DEFINITION

Art. 380. (New, SG No 83/1996, amend. - SG 103/05, in force from 01.01.2006)

FORM

Art. 381. (New, SG No. 83/1996, amend. - SG 103/05, in force from 01.01.2006)

PRE-CONTRACTUAL INFORMATION

Art. 381a. (New, SG No. 381. - SG 103/05, in force from 01.01.2006)

PAYMENT OF THE FIRST PREMIUM

Art. 382. (New, SG No. 83/1996, amend. - SG 103/05, in force from 01.01.2006)

OBLIGATION TO DECLARE

Art. 383. (New, SG No. 83/1996, amend. - SG 103/05, in force from 01.01.2006)

KNOWINGLY MAKING AN INACCURATE STATEMENT OR OMITTING

Art. 384. (New, SG 83/1996, amend. - SG 103/05, in force from 01.01.2006)

UNINTENTIONAL MISSTATEMENT

Art. 385. (New, SG No. 83/1996, amend. - SG 103/05, in force from 01.01.2006)

DECLARATION OF NEWLY OCCURRING CIRCUMSTANCES

Art. 386. (New, SG No. 83/1996, amend. - SG 103/05, in force from 01.01.2006)

INSURANCE PREMIUM

Art. 387. (New, SG No. 83/1996, amend. - SG 103/05, in force from 01.01.2006)

PREVENTION OF DAMAGE

Art. 388. (New, SG No. 83/1996, amend. - SG 103/05, in force from 01.01.2006)

OBLIGATION TO COMMUNICATE

Art. 389. (New, SG No. 83/1996, amend. - SG 103/05, in force from 01.01.2006)

INSURANCE PAYMENT

Art. 390. (New, SG No. 83/1996, amend. - SG 103/05, in force from 01.01.2006)

INSURABLE INTEREST

Art. 391. (New, SG No. 83/1996, amend. - SG 103/05, in force from 01.01.2006)

PROPERTY

Art. 392. (New, SG No. 83/1996, amend. - SG 103/05, in force from 01.01.2006)

NON-INVESTABILITY

Art. 393. (New, SG No. 83/1996, amend. - SG 103/05, in force from 01.01.2006)

Section II.

PROPERTY INSURANCE

SUBJECT MATTER OF THE CONTRACT

Art. 394. (New, SG No. 83/1996, amend. - SG 103/05, in force from 01.01.2006)

CONCLUSION OF A CONTRACT WITHOUT AUTHORITY

Art. 395. (New, SG No. 83/1996, amend. - SG 103/05, in force from 01.01.2006)

SUM INSURED

Art. 396. (New, SG No. 83/1996, amend. - SG 103/05, in force from 01.01.2006)

OVERINSURANCE

Art. 397. (New, SG No. 83/1996, amend. - SG 103/05, in force from 01.01.2006)

UNDERINSURANCE

Art. 398. (New, SG No. 83/1996, amend. - SG 103/05, in force from 01.01.2006)

INSURANCE INDEMNITY

Art. 399. (New, SG No. 83/1996, amend. - SG 103/05, in force from 01.01.2006)

PARTIAL DESTRUCTION

Art. 400. (New, SG No. 83/1996, amend. - SG 103/05, in force from 01.01.2006)

TRANSFER OF THE INSURED PROPERTY

Art. 401. (New, SG No. 83/1996, amend. - SG 103/05, in force from 01.01.2006)

ASSUMPTION OF THE RIGHTS OF THE INSURED

Art. 402. (New, SG No. 83/1996, amend. - SG 103/05, in force from 01.01.2006)

INSURANCE AGAINST THE RISKS OF CARRIAGE

Art. 403. (New, SG No. 83/1996, amend. - SG 103/05, in force from 01.01.2006)

SUBSCRIPTION INSURANCE

Art. 404. (New, SG No. 83/1996, amend. - SG 103/05, in force from 01.01.2006)

 

Section III.

CIVIL LIABILITY INSURANCE

DEFINITION

Art. 405. (New, SG No. 83/1996, amend. - SG 103/05, in force from 01.01.2006)

NOTICE

Art. 406. (New, SG No. 83/1996, amend. - SG 103/05, in force from 01.01.2006)

DIRECT ACTION

Art. 407. (New, SG No. 83/1996, amend. - SG 103/05, in force from 01.01.2006)

PROVISION

Art. 408. (New, SG No. 83/1996, amend. - SG 103/05, in force from 01.01.2006)

RIGHT OF THE INSURED

Art. 409. (New, SG No. 83/1996, amend. - SG 103/05, in force from 01.01.2006)

 

Section IV.

LIFE AND ACCIDENT INSURANCE

SUBJECT MATTER OF THE CONTRACT

Art. 410. (New, SG No. 83/1996, amend. - SG 103/05, in force from 01.01.2006)

SUM INSURED

Art. 411. (New, SG No. 83/1996, amend. - SG 103/05, in force from 01.01.2006)

INSURANCE ON THE LIFE OF A THIRD PERSON

Art. 412. (New, SG No. 83/1996, amend. - SG 103/05, in force from 01.01.2006)

MUTUAL INSURANCE

Art. 413. (New, SG No. 83/1996, amend. - SG 103/05, in force from 01.01.2006)

LIFE AND ACCIDENT INSURANCE IN FAVOUR OF A THIRD PARTY

Art. 414. (new - SG 83/1996, amend. - SG 103/05, in force from 01.01.2006)

THE RIGHT OF THE THIRD PARTY BENEFICIARY

Art. 415. (New, SG No. 83/1996, amend. - SG 103/05, in force from 01.01.2006)

EXCLUDED RISKS

Art. 416. (New, SG No. 83/1996, amend. - SG 103/05, in force from 01.01.2006)

PAYMENT OF THE PREMIUM

Art. 417. (New, SG No. 83/1996, amend. - SG 103/05, in force from 01.01.2006)

RIGHT OF REDEMPTION

Art. 418. (new - SG 83/1996, amend. - SG 103/05, in force from 01.01.2006)

Chapter twenty-eight.

CURRENT ACCOUNT CONTRACT

CONTENTS

Art. 419. (New, SG No. 83/1996) (1) Two persons, at least one of whom is a trader, may agree by the current account contract that the claims and liabilities arising from their mutual relations shall be kept in one account which shall be closed periodically. The party in whose favour there is a balance at closure may claim it together with interest from the day of closure of the account and where interest is already included in it.

(2) Closure of the account shall take place at the end of the calendar year, unless otherwise agreed, and shall be confirmed in writing by the parties. If the will of either party is invalid, a claim may be brought within one year of its execution.

(3) Unless otherwise agreed, a current account contract may be terminated by giving one month's written notice and before the account is closed, and the party having the balance in his favour may demand payment thereof.

 

Chapter Twenty-Nine.

BANK TRANSACTIONS

Section I.

BANK DEPOSIT AGREEMENT

BANK DEPOSIT

Art. 420. (New, SG No. 83/1996) (1) By a bank deposit agreement, the bank undertakes to keep the surrendered and designated currency, securities or other movable property for a consideration.

(2) The depositor may at any time demand the return of a thing deposited, even if it has been agreed that the deposit shall last for a specified time. In that case the depositor shall be liable to pay remuneration only for the time during which the thing has been kept, but he shall be liable to pay to the bank the expenses incurred by it in respect of the agreed duration of the deposit.

CASH DEPOSIT

Art. 421. (New, SG No. 83/1996) (1) In the case of a cash deposit, the bank shall owe the depositor the amount of money in the same currency and amount as the agreed interest.