BULGARIA Law and Practice Contributed by: Konstantin Vassilev and Kiril Kirkov, Vassilev & Partners Law Firm
The declaration must also include takeover-related information, the composition and functioning of man - agement and supervisory bodies and their commit - tees, and diversity policy information or an explana - tion if no such policy is applied. Public companies must disclose a report on imple - mentation of the remuneration policy. Where sustain - ability reporting is required, some governance infor - mation may be included in the sustainability report if this is clearly stated. 5.3 Incorporation and Registration Bulgarian companies are incorporated and registered through the Commercial Register, maintained by the Registry Agency under the Ministry of Justice. Regis - tration is generally constitutive, so a commercial com - pany comes into existence upon entry in the register. The Commercial Register is public and accessible online. It is the main public source for verifying exist - ence, representation and basic corporate status. Filings include initial registration, changes to regis - tered particulars, deletion of particulars and publi - cation of acts required by law. They may cover the company name, seat and address, management and representation, capital, quota-holders where applica - ble, constitutional documents, branches, transforma - tions, liquidation, insolvency, pledges and beneficial ownership information. Applications must be supported by documents prov - ing the relevant circumstances or acts. Documents in a foreign language must be accompanied by a certi - fied Bulgarian translation. Failure to make required filings may have significant consequences. A company will not exist, if initial reg - istration is not completed. Changes requiring regis - tration, such as changes in management, represen - tation, capital or constitutional documents, may not be effective against third parties until entered in the register. Unregistered circumstances generally cannot be relied on against good-faith third parties. The Registry Agency does not review commercial merits. Registration officials check compliance with
statutory form and content requirements, enter cir - cumstances, announce acts, issue certificates and maintain public access. Defective applications may lead to instructions for correction or refusal, and refus - als may be challenged in court. 5.4 Global Anti-Money Laundering Bulgaria’s AML framework is based mainly on the Measures Against Money Laundering Act, its imple - menting rules and legislation on measures against terrorism financing and proliferation financing. It implements EU AML/CFT requirements and applies a risk-based approach. Not every company is an AML obliged entity for all pur - poses, but all Bulgarian legal entities may be affected by beneficial ownership identification and registration rules. Full AML obligations apply to obliged entities, including banks, investment firms, insurers, payment and e-money institutions, crypto-asset service pro - viders, auditors, accountants, tax consultants, certain legal service providers, real estate intermediaries and company service providers. Obliged entities must identify and verify customers and beneficial owners, assess risks, apply customer due diligence, conduct ongoing monitoring and report suspicious activity to the Financial Intelligence Direc - torate of the State Agency for National Security. They must adopt internal AML rules covering controls, training, responsibility allocation, internal reporting channels and suspicious transaction indicators. Where the obliged entity is a legal person, internal AML rules must be adopted by the persons who manage or represent it. Boards and managers should oversee risk assessment, internal rules, compliance responsibilities, staff training, escalation of suspicious activity and beneficial ownership information. Failure to declare beneficial ownership information may lead to sanctions. Managers, directors and per - sons responsible for internal AML control may be per - sonally fined if they commit, tolerate or participate in AML violations. The company may also face pecuniary penalties. Civil or criminal liability may arise in severe cases.
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