Shares ( stocks ) – shareholder company. Transfer of shares.

Shares (stocks) – shareholder company. Transfer of shares.

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Belyov Law Office provides to your attention a clarification on what is a joint-stock company; What are the shares; How to brag about stocks.

What is a joint-stock company?


The joint-stock company is a legal entity with the membership structure, the most significant specific feature in it is that it owns capital divided into shares and that the company is responsible to its creditors with its assets and not to that of the partners.


The Bulgarian court clarifies that the assets of the joint-stock company represent the business goods held at some point by the joint-stock company, while the company’s capital represents a fixed amount, which constitutes the sum of the nominal contributions of the individual shareholders, the company’s property is variable.


According to the caselaw of the Supreme Courts, the share is a security which certifies that the holder participates with the nominal value stated in the company’s capital, but also has a connection with the company’s assets and reflects how much of it is behind each share.


The same can be the subject of a transaction and its carrying/real/value is determined on the basis of the real value of the company’s property and represents the relationship of the share with the assets of the company, reflecting how much of it is behind each share.


To begin with, the market value of the share of the secondary securities market is estimated to be the book value.


The main feature of the joint-stock company, which largely specifies all other differences from other capital trading companies, is the characteristic that its capital is distributed into shares.


It is a corporate entity with universal legal capacity (excepts exist, e.g. Art. 1 of the Banking Act, Art. 9 of the Insurance Code).


Because of its corporate structure, the joint-stock company cannot exist without members, which the Commercial Law calls shareholders. Shareholders can be all entities of private law.


Any natural person (responsible or not, Bulgarian or foreigner) who is not declared insolvency may be a shareholder in AD.


What’s the stock?


The share is a security which certifies that the holder (shareholder) participates with the nominal value specified therein in the capital. The joint-stock company cannot issue shares of different nominal values.


Shares can be issued in denominations of 1, 5, 10, and multiples of 10 shares. Consequently, the company’s capital is divided into equal parts called shares. The shares have the same nominal value and their sum forms the capital of the company.


Types of shares:


Main division of shares into (depending on the way of their transfer/the way the owner is legitimised):


A) Inheritable – The only possible type of shares that under our current legislation can be issued by joint-stock companies


B) To (transferable )bearer – By a decision of the National Assembly of the Republic of Bulgaria in 2018 the texts in the legislation providing for the possibility of issuing shares per (transferable ) bearer were repealed.


The shareholder companies that issued (transferable) bearer shares or temporary certificates were obliged to amend their statutes by providing that their shares were named, were therefore obliged to replace the shares of a (transferable )bearer or temporary certificates substituted by roll-call shares, started keeping books for shareholders, requested for registration the changes and submitted the amended statutes in the commercial register.


The shares of the carrier shall be transferred by their actual surrender.


Shares may also be divided into other types


1) according to the way available (available shares are transferred with giro such as roll-calls or handovers to (transferable )bearer) and dematerialised (dematerial shares have effect from their registration with the Central Depository)




2) according to the volume of rights that the shares give to the holder as ordinary (including the following rights: Right to dividend, right to vote and liquidation right) privileged (incorporating a higher number of rights) etc., but these divisions and those specifics of the shares will not be subject to examination of this article.


The share (inheritable) shall contain:


1. the designation “share” for a single and the corresponding number of shares for denominations with more shares;


2. the type of shares;


3. denomination number and order numbers of the included shares;


4. the company and the headquarters of the joint-stock company;


5. the amount of capital;


6. the total number of shares, their unit nominal value and denomination works;


7. coupons and their maturity;


8. the signatures of two persons who may oblige the company and the date of the issue.


A valid signature on the share is considered the printed signature. The name of the first owner shall be entered on the front side of the roll-call.


The type and number of shares are among the circumstances subject to entry in the trade register (Art. 174, para. 3 in v. art. 165, item 3 The Commercial Law/, it cannot be assumed that the lack of explicit and separate indication of the change in the type of shares/outside the new statutes/guarantees to vice or false verification.


How can you transfer shares?


The transfer of the inheritable shares shall be carried out with gyro (Art. 185, para. 2 of the Bulgarian Commercial Act).


In order to make an entry in the book of the roll-call shareholders, the acquirer of the shareholders must request this from the executive body of the public limited company and establish the transfer to be established by presenting the jirosana share.


The joint-stock company only makes a formal verification of the regularity of the transfer – whether the(transferable ) bearer of the share is a legitimate person and whether there is a girro on the outside. It is not necessary that the holder of the share has paid it back in order to be able to transfer it – Art. 186 the Commercial Act.

The provision of Article 185, para. 2 of the Commercial Law also requires that the transfer of the registered shares through giro be entered in the book of the registered shareholders in order to have an effect on the company. The transferring deal, however, is itself a real deal.

This shows that there is no entry, the transfer transaction is relatively invalid – with regard to the company (Decision No 1860 of 19.11.2001 on the town of No 478/2001, Vg.o. of the SCC).

In conclusion, it can be said that the Act is a legitimate order security.

The membership that materialises emerges outside and independent of it, but at a later stage (in the printing of shares).

It legitimises its holder as a shareholder and the disposition of the membership is related to a disposition of the share.

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