BULGARIA Law and Practice Contributed by: Konstantin Vassilev and Kiril Kirkov, Vassilev & Partners Law Firm
ing, while the board of directors or management board manages the company. Shareholders and quota-holders decide on matters affecting structure, capital, governance and financial results. These include amendments to constitutional documents, capital changes, transformation, dissolu - tion, appointment and removal of board members or managers, approval of annual financial statements, profit distribution and release from liability. Additional reserved matters may be created in the articles of association, statute or shareholder agree - ments, especially in private companies, joint ventures and start-ups. These often include major investments, disposals, borrowings, related-party transactions, budgets or changes in business activity. 4.3 Shareholder Meetings An OOD must hold a general meeting of quota-holders at least once a year. The meeting is usually convened by the manager, and 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 consent. An AD must hold a general meeting of shareholders. The general meeting is usually convened by the board of directors or management board. The invitation must be announced in the Commercial Register at least 30 days before the meeting, unless stricter rules apply. Written materials related to the agenda must be avail - able to shareholders in advance. Ordinary resolutions are generally adopted by a majority of the shares represented. Certain important decisions, such as amendments to the statute, capi - tal changes, transformation and dissolution, require statutory quorum and qualified majorities. Public companies are subject to stricter meeting rules. Notices and materials must be disclosed through stat - utory channels, including the Commercial Register, the Financial Supervision Commission, the regulated market and the company’s website. Shareholders may ask questions, vote by proxy, propose agenda items
where thresholds are met and use remote participa - tion mechanisms where available. Partnerships do not have shareholder meetings in the same sense. Their decision-making is mainly gov - erned by the partnership agreement. A sole proprietor has no separate shareholder body. 4.4 Shareholder Claims Shareholders and quota-holders may bring claims against the company where membership rights are infringed. These may concern voting rights, dividend rights, information rights, participation in meetings, transfer rights, liquidation rights or other rights under law and the constitutional documents. A common claim is the challenge of general meeting resolutions. A shareholder or quota-holder may seek cancellation of a resolution that contradicts mandato - ry law or the articles of association or statute. Defec - tive resolutions are generally treated as voidable and must normally be challenged within short statutory time limits. The company may bring claims against managers, directors or board members for damage caused by breach of duties. In an AD, shareholders holding at least 10% of the capital may bring an action pursuing liability of board members for damage caused to the company. In public companies, shareholders holding at least 5% of the capital have broader rights to bring certain company claims where management bodies fail to act. Minority shareholders may also request convening of a general meeting, propose agenda items where thresholds are met and challenge unlawful resolutions. In public companies, a controlling person or another person using influence to cause conduct against the company’s interest may be jointly and severally liable for damage caused to the company. 4.5 Shareholders in Publicly Traded Companies Shareholders in publicly traded companies must notify the Financial Supervision Commission and the company when their voting rights reach, exceed or fall below 5% or a multiple of 5%. The obligation may
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