{"id":17394,"date":"2024-04-01T10:34:51","date_gmt":"2024-04-01T10:34:51","guid":{"rendered":"https:\/\/kgk.bg\/?p=17394"},"modified":"2026-02-05T13:16:01","modified_gmt":"2026-02-05T13:16:01","slug":"druzhestvo-s-promenliv-kapital","status":"publish","type":"post","link":"https:\/\/kgk.bg\/en\/blog\/druzhestvo-s-promenliv-kapital\/","title":{"rendered":"A variable capital company"},"content":{"rendered":"
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A Variable Capital Company (VCC) is a new type of commercial company introduced into Bulgarian law by amendments to to the Commercial Act<\/a>effective from June 30, 2024.<\/p>

It was created to facilitate startups and investors by allowing flexible capital management without the initial and subsequent registration of every capital change in the Commercial Register<\/a>.<\/p>

For a company to be incorporated or transformed intoa variable capital company<\/a>it must meet two conditions simultaneously: its annual turnover and\/or asset value must be below the euro equivalent of BGN 4,000,000 , and its average number of employees must be under 50. If any of these conditions change, the company must be transformed into a Joint-Stock Company (JSC) or a Limited Liability Company (LLC).<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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What is a variable capital company?\n<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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A variable capital company<\/strong> is a new type of commercial company in Bulgarian law, introduced by an amendment to the Commercial Act aimed at facilitating the operations and financing of small and medium-sized enterprises, and it is particularly suitable for startup companies. Its main distinguishing feature is that the company's capital is variable<\/strong> and and is not subject to registration in the Commercial Register<\/strong>, both upon initial incorporation and upon any subsequent change.<\/p>

Unlike a Limited Liability Company (LLC) and a Joint-Stock Company (JSC), there is no obligation to register the company's capital. It is variable and is determined at the end of each financial year by a decision of the regular annual general meeting of the company, after reviewing the annual financial statement.<\/p>

The variable capital company combines elements of an LLC and a JSC while providing significantly greater flexibility in raising capital, distributing shares among partners, and especially in the participation of investors and employees in the company's capital structure.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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How is a variable capital company (VCC) incorporated?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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The incorporation of a variable capital company (VCC) resembles the traditional procedure of a classic LLC, but the process is significantly streamlined.<\/p>

The main facilitation is that the creation of a VCC does not require opening a bank account to deposit the share capital \u2013 this eliminates one of the slowest steps in the registration of commercial companies, especially when the company's representative or one of the founding partners is a foreign person.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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Documents for incorporating a VCC\n<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
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The procedure involves the preparation and submission of a set of documents to the Commercial Register, the main ones being:<\/p>