The Partnership limited by shares according to Bulgarian commercial law
The partnership limited by shares (Bulg.: Kомандитно дружество с акции, short: КДА) is regulated in the Articles 253 to 260 of the Commercial Code. The regulations regarding the joint stock company apply to the partnership limited by shares if there are no concrete provisions. Also the partnership limited by shares is a capital company – a hybrid between the joint stock company and the limited partnership. Two types of shareholders take part in partnerships limited by shares: general partners and limited partners whereby the latter ones bear liability only for the company’s obligations. According to Article 253 (1) of the Commercial Code, there must be a minimum number of three limited partners. The limited partners are entitled to subscribe for shares and to take advantage of all shareholder’s rights – though, they do not have right to vote in the general meeting.
The general partners are responsible for company formation. The formation takes place in two stages:
- The conclusion of a written and notarially certified Article of agreement between the general partners. At this stage, the articles of incorporation are elaborated and the general meeting is convened.
- At the second stage, shareholders are considered for the general partners to choose limited partners.
The partnership limited by shares is organised just as the joint stock company with the single-stage management system – there are the organs of the general meeting and the board of directors. The difference is the filling of the bodies: regarding the partnership limited by shares, the general meeting consists of general partners and limited partners who have subscribed shares. In this context, their responsibilities become defined. The general meeting is entitled to amend the Articles of Incorporation and to decide on the dissolution of the partnership only with the consent of the general partners and the shareholders. To transform the partnership the unanimous resolution of the general partners and a resolution of the general meeting amounting to at least ¾ of the shareholders is required.
The board of directors consists only of general partners. Its responsibility may not be limited by the general meeting. The board of directors bears the responsibility for the management and its members represent the partnership jointly towards third parties. According to Article 259 of the Commercial Code, the dissolution of the partnership requires the consent of the personally liable partners. The partnership may not be dissolved by the opening of insolvency procedures of one limited partner.