The Bulgarian legislator has amended the Commerce Act, creating an opportunity to establish a new legal organizational form – CVC (Company with variable capital), the purpose of which is primarily oriented towards developing innovative start-up companies. By mid next year, the Bulgarian Registration Agency must ensure the possibility for the submission of applications concerning the new type of company.
The adopted changes aim mainly at attracting foreign investments. The incorporation of CVC does not require the raising of initial capital, in comparison to the incorporation of a joint-stock company - BGN 50,000.
A new "Chapter fifteenth "a" is introduced in the Commerce Act providing the possibility of registering a CVC. A company with variable capital can only be an enterprise that has an average number of employees less than 50 people and an annual turnover that does not exceed BGN 4,000,000 and/or the assets value does not exceed 4,000,000 BGN. The company can also be established by one person – PCVC. The capital of the company is variable and is not subject to entry in the Trade Register. The amount of capital at the end of the financial year and its change in relation to the previous financial year is determined by a decision of the regular annual general meeting convened to consider and adopt the annual financial report. The company's capital is divided into shares. Shares of the same class have the same nominal value, which cannot be less than one BGN stotinka. Shares may vary in amount for the individual classes of shares. Partners make contributions against the acquired shares.
The rights that the company share provides are proportional to the nominal value of the shares unless otherwise agreed in the Articles of Association. The rights to the company share arise upon payment of the contribution to the capital. If agreed in the Articles of Association, the company can issue shares with special rights (privileges). Company shares with equal rights form a separate class. Limitation of the rights on the units of one class of shres is not allowed. Preferred company shares may allow more than one vote in the general meeting of shareholders, a guaranteed or additional dividend or a liquidation share, the right to buy back the company shares, as well as other rights provided for by law or in the Articles of Association.
The Articles of Association may provide that the preferred company shares are non-voting. When the dividend on the non-voting preferred shares of the company is not paid up in one year and the arrear payment is not made in the following year together with the dividend thereon, the preferred share acquires the right to vote until the arrears are paid. In this case, the preferred shares are calculated when determining the necessary quorum and majority.
The Articles of Association may provide that a certain type of shareholders or shareholders designated by name have privileges when exercising the right to vote and/or the right to veto when adopting decisions by the general meeting.