Upcoming changes in the capital of commercial companies in connection with the adoption of the euro in the Republic of Bulgaria

Beyond the necessary supply of euro coins and euro banknotes, the revaluation of bank accounts and the changes in prices, the capital of commercial companies will have to change - it will now be in euros. In this connection, an important change has also been adopted in the Companies Act, which will come into force with the adoption of the euro - shares in the capital of limited liability companies will now be able to be worth 1 euro cent, the nominal value of shares will also be able to be 1 euro cent, as will shares in a company with variable capital.  

In relation to existing companies, capital will need to be converted into euros. In the Commercial Register it will be done ex officio by the Registry AgencyOn the euro introduction date, the amount of the capital of a limited liability company, a joint stock company and a limited partnership with shares, as well as the registered nominal value of the shares in a joint stock company and in a limited partnership with shares, as entered in the Commercial Register, will automatically be replaced by the values in euro and euro cents.

The conversion of the nominal values of the shares and units shall be carried out in the general manner provided for by law - by dividing the nominal value in lev by the full numerical value of the official exchange rate, rounding the result to the second decimal place and then multiplying by the number of shares or units. 

In connection with this change, all capital trading companies will be obliged to submit to the Commercial Register their statutes and articles of association to reflect the change in capital from BGN to EUR. The law provides that a copy of the articles of association/company agreement, certified by the person or persons representing the company, with the amount of the capital and the nominal value of the shares/company shares converted in accordance with the rules of this law must be submitted to the Commercial Register for publication. It follows that the formalities for convening a general meeting for passing a resolution to amend the articles of association or memorandum of association need not be complied with. Also, if the company is supervised by the BNB, the FSC, etc., such changes will not require the approval of the supervisory authority.

Submission for publication of copies of the articles of association and the memorandum of association will be made at the same time as the first subsequent application for registration, cancellation or publication in the commercial register, i.e. for companies which are in business, this will have to be done at the latest when the next annual financial statement is filed. No state fee will be charged for the publication.

In the event that, in order to preserve the rights of the members of a limited liability company, an amendment of the converted capital is necessary in the event of a conversion of their shares in the capital, the amendment may only be up to 5 per cent of the subscribed capital and shall be effected in accordance with the procedure for amending the memorandum of association. In this case, the rules of the Commercial Act on capital increases and decreases shall not apply.

In order to be as helpful as possible to its customers in connection with the upcoming changes, the KGK team is already researching all aspects of commercial activity that will be affected by the adoption of the euro. In case you need any assistance with the issues discussed in this article or other upcoming changes, please do not hesitate to contact us.