BULGARIA Law and Practice Contributed by: Marin Sarafov, Petya Norova, Iva Georgieva and Eduard Milchev, G&P Law
Shareholders can be penalised and/or outright removed if they damage the company in any way or work against its interests, all subject to a GM resolu - tion. JSCs Managers Management responsibilities and liabilities in JSCs are stricter. Members of the BoD (or management board) are expected to present a guarantee in the form of a mon - etary sum in the amount of three times their gross annual salary. Being a collective body, the liability itself is distributed equally between BoD members by default, regardless of internal distribution of roles as CEO, COO, CFO, etc, unless appealed before the GM. Board members have strict rules imposed over con - fidentiality, non-competition, and carrying out their duties in a professional manner. Shareholders JSC shareholders are obliged to pay the respective share subscription price and participate in the com - pany’s affairs by voting at the GM and following its resolutions, much like the shareholders of an LLC. VCCs Managers Management of a VCC is a fairly new concept in terms of Bulgarian corporate liability standards. While the above rules for LLCs and JSCs are applied respectively, the VCC introduces the concept of “piercing the corporate veil” in Bulgarian legal prac - tice. This means that the appointed manager may be personally responsible before third parties for miscon - duct in the company affairs. The law provides that the appointed manager (or BoD member) will be assessed on how they: • perform their duties with the care of a prudent businessperson, balancing the risks of the busi - ness with the expected return for the company; and
• avoid any conflict of interest between their own interests and those of the company. At the same time, managers and/or shareholders exercising control, who have acted intentionally, will be jointly and severally liable to creditors for damages suffered as a result of the transactions and actions of Shareholders’ liability is to pay the respective share subscription price and participate in the company’s affairs by voting at the GM and following its resolu - tions, much like for the other company forms, unless there are additional stipulations in the AoA. If, as a result of their intentional actions, shareholders cause damage to the company, they may be liable to the company’s creditors. the company. Shareholders Employment relationships in Bulgaria are primarily governed by specific pieces of legislation passed by the Bulgarian parliament, reflecting Bulgaria’s civil law tradition. The Bulgarian Labour Code establishes mandatory minimum standards regarding the forma - tion, performance and termination of employment relationships. The legal framework is supplemented by the Social Security Code, the Health and Safety at Work Act, the Labour Migration and Labour Mobility Act in relation to third-country nationals and certain cross-border employment situations, the Protection Against Discrimination Act, and various secondary legislation, mainly ordinances, regulating specific aspects of employment conditions. As an EU member state, Bulgaria has implemented the principal EU directives governing employment law matters. Consequently, Bulgarian employment legis - lation reflects common European standards in areas such as working time, fixed-term and part-time work, transparent and predictable working conditions, gen - der equality, etc. Bulgarian employment law is predominantly statutory and is characterised by a high degree of mandatory 4. Employment Law 4.1 Nature of Applicable Regulations
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