The sale of company shares is the process of transferring ownership of a share in the capital of a company from one owner to another. This practice is widespread in business circles and provides an opportunity to attract new investors, expand the business of the enterprise or effect an entry or exit from a company. This article will examine the main aspects of the sale of company shares.
The applicable regulations for the transfer of company shares are the Commercial Act (“CA”), the Act on the Commercial Register and the Register of Non-Profit Legal Entities, Ordinance No. 1 of 14 February 2007 on keeping, storing and access to the Commercial Register and the Register of Non-Profit Legal Entities, etc. It is important to note that the articles of association (for limited liability companies) and the articles of incorporation (for limited liability partnerships) may provide for additional requirements relevant to the transfer of shares.
Transfer of company shares
A partnership interest is a partner’s share of the assets of a limited liability company (LLC). Through it, the participation of a person (partner) in a company reflects his rights and obligations. Pursuant to Article 129 of the Commercial Law (the “LC”), the partnership interest may be transferred and inherited. The transfer of a company share from one partner to another is freely made, while the transfer to a third party is subject to additional requirements.
Any person is free to sell his company or shares to another person. The exception is if the company shares are attached by a bailiff. Until the attachment is lifted, the owner may not dispose of his shares.
The transfer of company shares and the sale of a firm (company) shall be initiated first by an application under Article 122 of the Commercial Companies Code by the interested person addressed to the owner/partners of the company. In the application, the interested party shall specify the number of shares he wishes to acquire. The owner of the company, on his part, takes a decision in writing agreeing to sell the company shares. The transfer of company shares shall be effected by a contract of sale and purchase, which shall be notarised as to the signatures and contents.
The new owner should sign a new Certificate of Incorporation if it is an LLC, and if it is an LLC, all owners should sign a new Memorandum of Association to reflect the changes.
The contract for the transfer of company shares shall be entered in the Commercial Register and the Register of Non-Profit Legal Entities of the Registry Agency (“Commercial Register”), from which time the transfer of the Company Shares shall have effect for third parties of the Company. Upon registration of the change in the Commercial Register, additional documents shall be submitted depending on whether there will be other changes in the company, e.g. a change in the name, address, management, object of business, etc. If there are such changes, they may be reflected in the Commercial Register at the same time as the change in ownership.
When requesting changes electronically, the fee to be paid to the Commercial Register is BGN 15.
Due to the specifics of each case, the requirements for transferring company shares may vary and it should be borne in mind that the information in this article is not exhaustive. In view of this, we recommend that you consult a lawyer who will consider your case from each legal perspective.
Lawyers fromConcordiaLaw Firm are available to answer inquiries by phone +359 878583010, e-mail, or through the contact form, as well as for comprehensive assistance in the transfer of company shares.
