BULGARIA Law and Practice Contributed by: Nikolay Zisov, Svetlina Kortenska, Deyan Terziev and Teodora Peycheva, BOYANOV & Co
Some entities are required to prepare their financial statements on the basis of Interna- tional Accounting Standards. Such entities include credit and financial institutions, invest- ment firms, management companies and col- lective investment schemes, persons manag- ing alternative investment funds and collective investment undertakings, undertakings whose transferable securities are admitted to trading on a regulated market in a member state of the European Union. When referring to International Accounting Standards, the local Accountancy Act refers to International Accounting Standards (IAS), Inter- national Financial Reporting Standards (IFRS) and related interpretations (SIC-IFRIC interpreta- tions), as amended and interpreted by the Inter- national Accounting Standards Board. 10.4 Disclosure of Transaction Documents In the cases where a bid is required to be made public, the tender offer should be registered with the Commission and could only be published if the Commission does not issue a temporary prohibition within 20 working days after filing. If the Commission does not issue the relevant act within this term, it is considered that the FCS has rendered a tacit acceptance of the tender offer. This requirement does not apply to a tender offer for the acquisition and/or exchange of shares with voting rights of a company which has its registered office in another member state and whose shares are admitted to trading on a regu- lated market in Bulgaria, which has been subject to approval by the competent authority of that member state. Furthermore, regarding the general obligation to issuers to disclose regulated information, it is
required that information relating to the mate- rial transactions of the public company for the relevant reporting period should be properly dis- closed in the notes to the financial statements.
11. Duties of Directors 11.1 Principal Directors’ Duties
According to the Commerce Act, board mem- bers, including the principal directors, should perform their duties with the care of a good merchant in the interest of the company and all shareholders. This obligation refers to all duties of board members, including when entering into any kind of business combination. Their duties are owed to company shareholders, but there are also general obligations to act in a transpar- ent and in a non-deceptive manner to all third parties. On the other hand, it should be also noted that according to the Bulgarian law, the care of a good merchant is considered to be higher due diligence care, requiring the possession of rel- evant commercial experience, professional knowledge and skills. As regards the protection of the company’s inter- est, the board members are not entitled, on their own behalf or on behalf of others, to carry out commercial transactions, to participate in com- mercial companies as unlimited partners, or to act as procurators, managers or members of the boards of other companies or co-operatives where a competing activity of the company is carried out. This restriction does not apply if permitted under the company’s by-laws or by express consent. In relation to any business combinations, board members should not disclose, including after
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