BULGARIA Law and Practice Contributed by: Konstantin Vassilev and Kiril Kirkov, Vassilev & Partners Law Firm
but they raise expectations regarding transparency, reporting discipline, investor relations and internal governance systems.
distribution, capital changes, appointment and remov - al of the manager and claims against the manager or comptroller. The manager takes ordinary-course busi - ness decisions and represents the company exter - nally. Some matters are reserved to the general meeting by law or by the articles of association. For example, decisions on acquiring or disposing of real estate are reserved to the general meeting. Bulgarian case law distinguishes between internal approval and external validity, so the absence of internal approval does not automatically invalidate a transaction with a good- faith third party. In an AD, the general meeting decides on amend - ments to the statute, capital changes, transformation, dissolution, election and removal of board members, appointment of auditors, approval of annual financial statements, profit distribution, bond issuance and release from liability. The board of directors or man - agement board is responsible for strategy, operations, representation and implementation of shareholder resolutions. In partnerships, decision-making depends mainly on the partnership agreement. General partners manage and represent the business, while limited partners usually participate only in matters where the law or the agreement gives them approval rights. 2.3 Decision-Making Processes The general meeting of an OOD is convened by the manager at least once a year. Written notice must be received by each quota-holder at least seven days before the meeting, unless the articles of association provide otherwise. Resolutions may also be adopted without a meeting if all quota-holders give written con - sent. Voting rights usually correspond to capital participa - tion. Ordinary resolutions are generally adopted by a majority of more than one half of the capital. Important matters, such as amendments to the articles of asso - ciation or admission and expulsion of quota-holders, require higher majorities.
2. Corporate Management 2.1 Principal Bodies or Functions
For an OOD/EOOD, the principal governance bod - ies are the general meeting of quota-holders and the manager or managers. The manager does not have to be a quota-holder. In an EOOD, the sole owner exercises the powers of the general meeting and may manage the company personally or appoint a man - ager. The general meeting is the ownership-level decision- making body. The manager organises and directs the company’s business and represents it externally. Restrictions on the manager’s representative powers are generally not effective against third parties, except where the law expressly provides otherwise. For an AD/EAD, the principal bodies are the general meeting of shareholders and either a board of direc - tors under a one-tier system, or a management board and supervisory board under a two-tier system. In a one-tier system, the board of directors manages and represents the company. In a two-tier system, the management board manages and represents the company, while the supervisory board oversees it and does not participate directly in management. Other forms have more specialised structures. In part - nerships, management is normally carried out by the partners or general partners. Variable capital compa - nies have flexible governance shaped largely by their articles of association. Public companies and public- interest entities may also have governance-related functions such as an investor relations director, audit committee and compliance or internal control func - tions. 2.2 Types of Decisions In an OOD, the general meeting decides on key own - ership and structural matters, including amendments to the articles of association, admission and expulsion of quota-holders, approval of annual accounts, profit
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