Sofia, 18 January 2011 – The reduction of the administrative burden over the companies has crucial importance for increasing their competitive power.  The latest legislative developments in Bulgaria aim to introduce changes in that direction, as well as to harmonize the legislative acts with the EU legislation. The amendments in the Commercial Act effective from the end of the previous year include significant facilitations for companies in several cases, like mergers, spin-off and splitting.
 

Simplification of the procedure for company transformation in accordance with the EU legislation

In accordance with the requirements of the EU legislation the amendments to the Commercial Act will reduce the administrative burden over the companies in some cases of transformation for the purpose to increase their competitive power. The numerous obligations for submission of information have been reviewed and now the companies are given significant comfort.

When all partners or shareholders in the transforming and the acquiring company give their written consent, the following would not be necessary for completing the procedure of transformation:

• Submission of a balance sheet as of the last month preceding the date of the transformation agreement or plan;
• Report of the company’s managers regarding the transformation;
• Submission of information in case of any changes in the financial rights and obligations that incurred after the preparation of the transformation agreement or plan and before the date of the company’s general meeting.

In case of a merger where the acquiring company owns more that 90 per cent of the voting shares of the transforming company no report will have to be presented of the company representatives regarding the transformation, no examination of the transformation and no submission of information to the partners or shareholders. Under certain circumstances even no resolution of the transforming company would be required.

The new regulations in case of a splitting with incorporation of new companies when the shares of the newly established companies are allotted between the partners and the shareholders in accordance with their rights in the splitting company are similar to that.

When the capital of a splitting company is owned only by the acquiring companies there is no necessity a resolution for the transformation to be adopted by the general meeting of the splitting company.

It is further envisaged that all materials related to the transformation may be made available to the partners or shareholders on the company’s website or submitted to them via e-mail.

A seven-day term is set out for registration in the company’s shareholders’ register of any changes regarding shares ownership in joint stock companies

After the latest amendments in the Commercial Act the representatives of joint stock companies will have to enter into the company’s shareholder’s register any changes regarding the ownership of company’s shares or any pledges on them within seven days following the date of receiving the respective documents. Upon failure to do this fines amounting to BGN 100-500 (approximately EUR 50-250) may be imposed on the company’s representatives.

Furthermore, transferees and pledgees will also have an obligation for notifying the respective joint stock company for any acquisition or establishment of pledge on their shares within a seven-day term following the execution of the transfer/pledge endorsement. However this obligation does not create additional difficulties for the business as until now such notifications were made even within shorter terms in order the transferee or pledgee to duly exercise its rights in respect of the company.

 
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Founded in 1957, Wolf Theiss is one of the leading European law firms in Central and Eastern Europe with a focus on international business law. Its 12 offices, in Albania, Austria, Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Hungary, Romania, Serbia, Slovakia, Slovenia and Ukraine, employ 300 lawyers, working for local and international industrial, trade and service companies, as well as banks and insurance companies. Combining law and business, Wolf Theiss develops comprehensive and constructive solutions on the basis of legal, fiscal and business know-how.

Award winning...
We concentrate on winning cases, rather than awards. But one tends to lead naturally to the other. Over the years, we have won numerous awards, consistently ranking as one of the leading law firms in the CEE/SEE region:

"Law Firm of the Year: Central Europe" 2010
(The Lawyer European Awards)
"Law Firm of the Year: Eastern Europe and the Balkans" 2009
(The Lawyer European Awards)
"Eastern European Law Firm of the Year" 2006
(Chambers & Partners)
"Law Firm of the Year" 2008 and 2009
(South-eastern Europe Real Estate Awards)
"Austrian Law Firm of the Year" 2003, 2006, 2007, 2009 and 2010
(IFLR - International Financial Law Review; Chambers & Partners; PLC Which lawyer?; ILO - International Law Office)
"Austrian Tax Law Firm of the Year" 2006, 2007, 2009 and 2010
(International Tax Review)
"Czech Law Firm of the Year" 2007 and 2010
(IFLR - International Financial Law Review)
"Hungarian Law Firm of the Year" 2009
(IFLR - International Financial Law Review)
"Highly commended" for numerous complex and innovative transactions in 2008
(FT Innovative Lawyer Report)
"Worldwide – Entertainment and Media Law Team of the Year" 2009
(World Leaders International IP Awards)