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BEARER SHARES BANNED

According to the latest amendments to the Bulgarian Commerce Act, promulgated in State Gazette No. 88/23.10.2018, in force as of 23 October 2018, issuing of bearer shares will not be possible anymore. Bearer shares or temporary certificates issued prior to the amendments are substituted by registered shares. The law provides 9 months period for the bearer shares of existing companies to be substituted by registered shares.

The companies are obliged to amend their articles of association, to keep shareholder register and to publish them with the Commercial Registry and the Registry of the Non-Profit Legal Entities.

Within two months upon expiry of the above term the Registry Agency is authorized to send a list of companies which have not met the requirements to the Prosecutor’s Office and the Prosecutor will be entitled to request termination of the companies by the court. This list will be updated every 6 months.

In case a shareholder fails to submit/substitute their bearer shares or temporary certificates within the specified term, the company shall invalidate them. In such cases the respective shareholder is entitled to receive the amount equivalent to his/her contribution for the shares within 6 months as of knowing about the invalidation but not later than 5 years from the date of the invalidation.

This amendment is implemented to facilitate identification of the shareholders since the bearer shares were transferred by way of delivery and the change in the ownership was not publicly announced in the Commercial registry and the Registry of the Non-Profit Legal Entities.

The amendments transpose in the national legislation the provisions of Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing.