BULGARIA Law and Practice Contributed by: Konstantin Vassilev and Kiril Kirkov, Vassilev & Partners Law Firm
also apply to indirect holdings, concerted action and financial instruments giving access to voting rights. A mandatory tender offer may be required when a person acquires more than one third of the votes in a public company. Further obligations may arise when the 50% or two-thirds thresholds are crossed. A per - son holding more than one third but not more than two thirds of the votes is restricted from acquiring more than 3% of voting shares in one year unless the acqui - sition is made through a tender offer. Where a person acquires at least 95% of voting rights as a result of a tender offer, squeeze-out and sell-out mechanisms may become available. Stewardship means the responsible exercise of share - holder rights by institutional investors and asset man - agers, including monitoring investee companies, vot - ing, engaging with management, managing conflicts and disclosing engagement practices. Bulgarian law does not impose a general stewardship obligation on all shareholders, but certain professional market par - ticipants are subject to EU-derived transparency and engagement rules. 5. Corporate Reporting and Disclosures 5.1 Financial Reporting Requirements Bulgarian companies must keep accounting records, prepare annual financial statements and, where applicable, an annual management report under the Accountancy Act. The content depends on the size and status of the enterprise, including whether it is micro, small, medium-sized, large or a public-interest entity. Companies controlling other entities may need to prepare consolidated financial statements and a consolidated management report. Certain enterpris - es, including public-interest entities and companies meeting statutory audit thresholds, must have their financial statements audited by a registered auditor. As a rule, traders must publish annual financial state - ments, consolidated financial statements and annual
reports in the Commercial Register by 30 September of the following year. Annual activity reports are also submitted to the National Statistical Institute and the National Revenue Agency within the applicable report - ing deadlines. Certain exemptions apply, including for sole proprietors not subject to mandatory independ - ent audit and some enterprises with no activity. Issuers whose securities are admitted to trading are subject to stricter reporting. Annual financial reports must be disclosed within 90 days after the financial year-end, and annual consolidated reports within 120 days where consolidated reporting is required. Six- month financial reports must be disclosed within 30 days, or within 60 days for consolidated six-month reports. Issuers also disclose quarterly notifications of financial condition. Sustainability reporting is part of the broader reporting framework. Large undertakings and small and medi - um-sized public-interest entities within scope must include a separate sustainability section in their man - agement report, subject to sustainability assurance. 5.2 Corporate Governance Arrangement Disclosure Private companies are not subject to the same detailed corporate governance disclosure regime as public companies. Their main public disclosures are made through the Commercial Register and include constitutional documents, registered representatives, capital changes, transformations and annual financial statements. Joint-stock companies have additional disclosure obligations in their annual business report, including information on board remuneration, board members’ holdings and rights to acquire company instruments, participation in other companies and certain contracts with board members or related persons. Public companies must include a corporate govern - ance declaration in the annual activity report. It must state which governance code the issuer applies, explain deviations, describe additional governance practices, and outline internal control and risk man - agement systems related to financial reporting.
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