Directors of a Bulgarian company
Directors of a Bulgarian companyUpdated on Monday 18th April 2016
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The director of a Bulgarian company has various duties and responsibilities depending on the type of company he or she is part of. According to Bulgarian law, a person cannot be a company director if he/she:
- has been a board member of a company which has been dissolved on term of insolvency two years before the date of his/her appointment and the claims of the creditors were not fully satisfied;
- does not meet other requirements necessary to occupy the position, as described in the articles of association of the company.
For a joint stock company, a board member can be an individual or legal entity, if so stipulated in the articles of association of the company. If the board member is a legal entity, it must nominate a legal representative that will be in charge of its duties on the board.
For a limited liability company the manager must be an individual, rather than a legal entity. A limited liability company may have more than one manager.
Duties of the directors
The duty of loyalty refers to the conflict of interests between the director and the company. There are a variety of situations in which the interests of the director are or may be in conflict with the interests of the company. It is expected of the director to act loyal towards the company: not to compete with the company, not to abuse the powers vested in him/her.
The duty of care refers to the amount of time, care and diligence invested in managing the company.
The director must possess the necessary skills and experience to make the proper business decisions and consider the outcome of those decisions. The director must act in the best interest of the company.
In joint stock companies and limited liability companies, the board members have equal rights and obligations and they must perform their duties professionally, with care and in the best interest of the company and the shareholders.
Liability of Bulgarian directors
The directors are liable both jointly and independently to the company for damages caused as a result of their actions. A director may be released from liability if it is established that his/her actions did not lead to the damage suffered by the company.
Foreign directors in Bulgaria
A foreign manager or director that wishes to work in Bulgaria does not need to obtain a work permit and can apply for a long-term residence permit in Bulgaria.
Our law firm in Bulgaria can provide more information about the status, liability and duties of a director in Bulgaria. Contact our Bulgarian lawyers for detailed information.