The new horizon for start-ups in Bulgaria

On 01.08.2023, the long awaited changes and amendments to the Commercial Act regarding the company with variable capital (CVC) were published in the State Gazette. Thus, for the first time since 1991, a new type of commercial company is created in Bulgaria. It is established based on the Western European model, taking into account the years of experience accumulated in Europe and the needs of businesses entering the market.


The company with variable capital combines features of well-known limited liability companies and joint-stock companies. In this way, the legislator provides Bulgarian start-ups with the necessary freedom while also ensuring security, enabling them to quickly and easily (from a legal perspective) develop their businesses.


The founder of a CVC can be any natural or juridical person, as long as they have not been declared insolvent. Since this type of company is intended for startups, limitations on personnel and annual turnover and assets are provided to ensure that it truly remains a startup. In order for a company to be considered a CVC, it must meet the following cumulative conditions:

  • The average staff count should not exceed 50 people, and
  • The annual turnover should not exceed BGN 4,000,000, and/or the value of the assets should not exceed BGN 4,000,000 (i.e., if neither of these conditions is met, the company cannot continue to exist as a CVC).

Consequently, when these conditions are no longer met, the new legal rules provide for an obligation to convert. In other words, the CVC in question must be transformed into one of the other types of capital companies.


The main advantage of the new type of company is the so-called “variable capital”. The idea is that partners in a CVC can change the company's capital at any time without it being tied to a cumbersome procedure for decision-making and submission in the Commercial Register. Initially, there is no requirement for the company's capital to be stated in the Commercial Register. On the contrary, the new Article 260d explicitly states that it is not subject to registration. Changes to it are made by decision of the partners, similar to the other capital companies but this decision does not need to be announced anywhere.

Another aid for the partners in a CVC is that the minimum amount of said capital is 0,01 BGN. Thus, the already light requirement for the minimum capital of an LLC (1 BGN) is further eased.


Similar to the transfer of shares in a joint-stock company (as long as they are not encumbered), the transfer of company shares in a CVC is free. This means there is no obligation to first offer them to the other partners or to seek their consent for the transfer to third parties. However, this can be changed by agreement in the company's articles of association.

The transfer occurs in the usual manner – by a contract with notarized signatures. But even this procedure can be simplified. It is permissible to agree in the articles of association that notarization is not required for the transfer. In other words, it can be done in a simple written form.

However, the articles of association can provide for a general restriction on the disposal of shares. This prohibition must be for a specific period of time, i.e., it should not be permanent. However, there is no minimum or maximum duration for this period. Thus, freedom again lies entirely with the partners.


There are two bodies in a CVC – the general assembly of all partners and the management board/manager. Regarding the general assembly, the requirements do not differ significantly from those of other capital companies. However, there are specifics with the management board.

Although it is possible for the management to be carried out by a management board, the one-tier management system is maintained. In other words, the rules for CVCs should not be confused with those for joint-stock companies, as there is no supervisory board as a structure.

There is no restriction on the number of members on the management board. Each of them requires the well-known signature specimen.

Similar to the regime for the board of directors in joint-stock companies, the management board of a CVC can appoint one or more of its members to represent the company. In other words, as executive directors.

An important feature is the increased liability of the managers. The new Article 260ъ, paragraph 5, provides that for deliberate actions by the managing members of the management board and the partners, they will be jointly liable. This only applies in cases of harm caused to creditors through transactions declared null and void through a Pavlov claim or a rescission claim in insolvency proceedings.


In addition to the founders and partners, the new legislative framework also provides one main privilege for individuals working for/in a CVC. The new changes adopt a new contract for the acquisition of shares which is more widespread in foreign countries or also known as "vesting contracts". The contract is signed between the CVC and the employee (regardless of the type of contract), giving the employee the opportunity to acquire a portion of the company's capital. However, this portion is limited – only the company's own capital, which cannot exceed 50% of the total capital.

In general, this new type of company gives complete freedom to Bulgarian startups to structure themselves in a way that suits them best. The hope is that this will substantially stimulate the development of the business sector in the country.


This article is up to date as of 17.08.2023 and aims to provide a general overview of the new legal framework regarding the addressed issues. The content in this article does not constitute legal advice, and we do not advise anyone to make commercial decisions solely based on the information in the article without obtaining qualified legal assistance for their specific case. If you need assistance, we will be glad to assist you. Please contact us at the following email address: office(at) or by phone at +359 88 6530004.

Dr. Miroslava Hristova, LL.M. (Vienna)

Dr. Miroslava Hristova Law Firm

36 Dragan Tsankov Blvd., Interpred-WTC, block B, 2nd floor, Office No. 208

1040 Sofia, Bulgaria

T:+359 88 783 8055


Tsvetomira Zhivkova

Dr. Miroslava Hristova Law Firm

36 Dragan Tsankov Blvd., Interpred-WTC, block B, 2nd floor, Office No. 208

1040 Sofia, Bulgaria

T:+359 2 443 80 55


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