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Non-performance of monetary obligation in Bulgaria I part

Money are due on the acquisition of certain property (goods) or against the right to the enjoyment. With the amount of money most frequently are payed the development of a chattel or provided service. Salary (remuneration) also gets money. In currency debt “convertand outstanding non-cash liabilities when seeking their realization through court. Damages from tort are evaluated and compensated with money too.

Then what are the consequences due to non-performance in accordance with Bulgarian laws?

Non-performance most often causes damages to the creditor for compensation of which the legislator should predict appropriate arrangements. The determination of compensation for the creditor of a monetary obligation is possible in two main versions:

1. By the law;

2. By agreement not forbidden by the law;

Compensation by the law

Here we can distinguish two cases:

general rules of law

special rules of law

Compensation in accordance with general rules

The principle of the Law of Obligations and Contracts is that to the creditor is due full compensation of the damage suffered, which are in direct consequence of the failure. In the legal doctrine it is undisputed that objective impossibility of performance of a monetary obligation is unthinkable. The genus of money could never perishes and this is explicitly enshrined in Art. 81, para. 2 of Bulgarian Law on Obligations and Contracts.

Since the implementation of the monetary obligation is always possible creditor may claim money owed (performance) together with compensation for the delay.

The latest gives rise to affirm the understanding that monetary obligation could only be delayed execution, respectively would be due only a compensation for delay. According to the general rules when claiming compensation, the creditor must prove the damage has suffered, and their size. In most cases this is associated with serious difficulties. Losses incurred, except that the creditor should to prove them, should to be identified and their causal connection with the default. Even more difficult on practice is to prove benefits lost.

To avoid such evidentiary difficulties and taking in mind the special nature of money in commodity-money relations legislator created special rules regulating relations regarding non-performance of monetary obligation.

Special rules on compensation – legal default interest

Bulgarian Law on Obligations and Contracts provides for non-performance of monetary obligations debtor owes compensation in amount of the statutory rate from the date of the delay. For actual damages in a higher amount the creditor may claim damages under the general rules.

In Bulgaria statutory rate of interest is determined by the CabinetCurrently, legal default interest is determined by Decree № 72 of 1994 amounted to 10 percentage points above the base rate of the Bulgarian National Bank, and for liabilities in convertible currency to 10 points over three-month LIBOR for the respective currency. Such is the regulation of so called Legal default interest. It is “legal” because the law defines the conditions under which it is due, as well as its size.

Interest rates on defaults

The first prerequisite is to be due amount of money. Ain’t no matter on what grounds the debt was incurred contract, tort, judgment and so on.

The second prerequisite is that a monetary obligation is not yet fulfilled, i. e. the debtor is in default. In art. 84 OCA defined the starting point of the delay:

1) at a fixed date for performance – with it’s expiration;

2) in the absence of agreement to date – following a call from the creditor;

3) in debt arising from tort, the debtor is deemed in default at the time of the injury, whether the creditor invited him to pay compensation or not.

In the next post we will review Compensation by agreement not forbidden by the law.

RP in Bulgaria based on commercial activity

Lots of NON EU entrepreneurs are facing with a problem when they need to stay in Bulgaria for more than 90 days (in every 180 days).  This is due to both Bulgarian and EU immigration legislation procedures.

In general there are two main types of regimes depending of presence or lack of an agreement for visa free regime between their state and EU.

In the first case (when there are an agreement for visa free entrance), citizens may travel to Bulgaria without the need of entry visa and can stay up to 90 days (in every 180 days) but not a day more. Some of the countries in this list are:

United States of America, Australia, Albania, Andorra, Argentina, Bosnia and Herzegovina, Brazil, Venezuela, Guatemala, Israel, Canada, Hong Kong, South Korea, Costa Rica, Macedonia, Malta, Malaysia, Mexico, Moldova, New Zealand, Singapore, Serbia, Japan and so on.

In the second one visitors from countries that doesn’t have an agreement for visa free regime should hold in any case entry visa.

And so, simply running a company in Bulgaria doesn’t allow you to reside in the country. There are three main ways to obtain Residency Permit (RP) in connection with commercial or supporting activity in Bulgaria (except Investment Immigration program):

– to employ 10 Bulgarian citizens in your company;

– to act as a self employed person (freelancer);

– to act as a representative person of foreign entity registered with Bulgarian Chambers and Commerce and Industry;

In this post I will provide you with information for the third option, namely – to obtain residency permit in Bulgaria acting as a representative of a foreign entity.

This possibility is regulated by Law on Foreigners and Investment Encouragement Law.

In order to complete applicants should go through 3 procedures:

1. Registration of Trade Representative Office of foreign entity at Bulgarian Chambers & Commerce.

According to the Investment Encouragement Law, the representative offices in Bulgaria is not a legal entity and can perform only non profit activities such as: identifying the market opportunities and making surveys regarding the business in the Bulgarian market, making travel arrangements for the potential clients to the head office or for the company’s representative in Bulgaria, make promotional campaigns in order to make the goals of the company known in the Bulgarian market, trying to find investment opportunities.

A representative office cannot raise invoices for services or goods and also cannot be invoiced for procured services or goods. All transactions are considered done for the foreign entity.
The representative offices cannot close deals in the name of the Trade Representative Office, but for foreign company and also cannot sign any contracts.
A representative office may hire personnel and enter into agreements but cannot perform any activity that can be considered commercial otherwise it must be registered as a legal entity and enroll for the specific taxes.



What documents are required for the setup of a Trade Representative Office in Bulgaria?

The representative office must be registered at the Bulgarian Chamber of Commerce and Industry based on specific documents such as:
– the application for registration,
– the decision of opening of a representative office and the decision of appointing the person in charge for the representative office’s activities,
– the certificate of registration of the foreign company, showing existence, ownership, representation and a person that represent it, current status (Certificate of Good Standing) of the foreign entity ( and issued no later than 6 months on it’s presence at BCCI).
– the power of attorney in original for the person appointed to carry the activities of the representative office,
– proof that the Chamber of Commerce Industry’s fees were paid and the registration card for the information system of the Bulgarian Chamber of Commerce and Industry.

Nota Bene:  Only legal entity may apply for TRO (Trade Representative Office) and not sole proprietor as a business form. A legal entity is a legal construction through which the law allows a group of natural persons to act as if they were a single person for certain purposes. The most common purposes are lawsuits, property ownership, and contracts.
Nota Bene:  All official documents that are issued outside Bulgaria should be accompanied with Apostille, (if the country of origin is a member of Apostille Convention – The Hague Convention Abolishing the Requirement for Legalisation for Foreign Public Documents) translated in Bulgaria and translation certified at Bulgarian Ministry of Foreign Affairs – consular relations.

The whole procedure of registration doesn’t take longer than a week if all the documents are accurate and delivered on time.

Once TRO is being registered applicant may proceed with the next step.

2. To apply for issuing of Visa D

The presence of visa D is an absolute prerequisite for obtaining a residence permit in Bulgaria. Visa D could be issued only in Bulgarian diplomatic missions by permanent address of the applicant.

Application for Visa D should be submitted not early that 90 days from the planned traveling. Application is being reviewed in 45 days, following submission.

Once a Visa D is granted the applicant may arrive in Bulgaria and apply for long-term residency permit.

Visa D provides you with availability to entry multiply times in Bulgaria till it’s expiration.

3. Application for Long-term residency permit.

Applications for Long-term residency permit should be submitted in front local migration office by registered address of applicant.

Applications are reviewed within 15 days.

Certificate of long-term residency permit Bulgaria

Certificate of long-term residency permit Bulgaria

As a result you will receive a certificate of granted Long-Term residency permit. It’s a subject of renewal annually.


Please do not hesitate to get in contact with us for all other questions arising in your mind.

Telecom has used unfair commercial practices

Mobiltel” JSC has applied an unfair commercial practice, providing false information to consumers, the proposed lease handsets coded to work only with SIM cards of telecom, will be unlocked for free and freely use with cards of other operators after expiration of fixed-term contracts.

This is the final decision of the Supreme Administrative Court (SAC), which confirms the administrative act of the Commission for Consumer Protection (CCP) issued Unfair Commercial Practices reported by CCP.

SAC confirmed a decision of the CPC for UCP of Mtel

SAC confirmed a decision of the CPC for UCP of Mtel

Devices that Mtel sells of leasing in most cases are coded and can work only with the SIM card of the same mobile operator.

It becomes clear that employees of telecom has convicted consumers that after the completion of the contract by which was provided encrypted mobile phone by the company for free would be given a code to unlock it.

A check performed by the Commission for Protection of Consumers, however, found that for the providing of the code is necessary to pay the price indicated in the price list of the operator. Results from the check also shows that information for decoding fee which varies according to the price of the phone (from 50 to 150 lev) is placed only on Mtel website. According to the Commission for Protection of Consumers, it means that users without internet access are unable to make informed choices.

Commission for protection of consumers

Commission for protection of consumers

With the latest amendments to the Law on consumer protection was provided when a final decision of the Supreme Administrative Court confirmed an unfair commercial practice, users to have the right to terminate the contract with the trader concluded as a result of using this practice and to claim compensation in front the courts.

The law also provides the final decisions of the Supreme Administrative Court to be binding on the civil court, the right of consumers to seek redress lapse upon the expiration of five years from the date of entry into force of the decision of the Supreme Administrative Court, says also the message of the Commission for Protection of Consumers.



Failed election for Chairman of Supreme Court of Cassation of Bulgaria

After 8 hours of electing procedure for Chairman of the Supreme Court of Cassation (SCC) and in less than two minutes vote, the Supreme Judicial Council failed to make a successful choice early today.

Nominations for Chairman of the SCC of Bulgaria

Nominations for Chairman of the SCC of Bulgaria

Supporting Judge Tanya Raykovska voted 15 members, six were “against”, and three abstained. For Judge Pavlina Panova voted nine members, eight were against and seven abstained. By provisions of the law to have a valid choice are need at least 17 ​​votes for a candidate. SJC will now have to announce a new procedure. So the choice for the Chairman of the SCC will be held after the parliamentary vote, which is October 5.

After the vote, Judge Panova said in front medias that was not surprised by the result. “As Man, involved in such a race, in such event, you must have the courage to anticipate and any development of the procedure,” said Judge Panova.

Asked if she thinks this choice depends on the political situation, she said that a lot of it is willing to respond that it depends noted that the SJC itself has tried to schedule the election for President of the SCC before the parliamentary vote to demonstrate independence from the political situation.

She refused to give her opinion will she re-join the race, and mostly because one possible future candidature again will depend on the availability of nomination of at least five members of the SJC.

Judge Tanya Raykovska left the building of the Supreme Judicial Council of the side entrance and journalists could not even talk to her.

supreme court of cassation Bulgaria

supreme court of cassation Bulgaria

About an hour SJC members took to discuss the merits of the two candidates. Noticed that in favor of one or the other candidate spoke only importers of the respective nominations. The other members of the board remained silent, or urged to be made ​​optional with the result.

Professor. Lazar Gruev put an end to the debate by saying, “I want to believe that the SJC, in its decision will be commensurate with the expectations of the democratic spirit manifested by election of the President of the SCC. Good news is that every Bulgarian citizen who had the patience to follow the procedure, colleagues and people will be able to compare their choice with that which we will do. I would like to believe that we will make the right choice for SCC, good for the judiciary and the best judges of the SCC.

Original article in Bulgarian by Ralitza Petrova at Legalworld.bg

Protecting your Intellectual Property in Bulgaria

I was planning from a long time to provide you with some initial information regarding Intellectual Property  protection in Bulgaria. Well, finally the time to do this has come.

Intellectual Property protection Bulgaria

Intellectual Property protection Bulgaria

Lets first answer to a question – What actually is Intellectual Property? (for these that don’t know).

An objects of intellectual property rights are intangible assets with economic value, expressed in a manner and an objective form, set out in a legal rule, which primarily are the result of creative activity.

In national, international and supranational provisions are principally non exhaustive listed various objects. General classification of the objects of intellectual property can be expressed as follows:

Objects of copyright and related rights;

Industrial property such as covered by patent law, object of the right of the names and objects of industrial design;

All other objects relating to intellectual activity.

Requirements for legal protection of copyrighted works include the work to be a result of creative activity and meet the possible expressions and forms of creative activity.

Industrial property are also intellectual outcomes that can be inventions and utility models (objects of patent law), marks and geographical indications, as well as companies (subject to the rights of signage), industrial design (subject to the right of the design ) and rights arising from unfair competition.

So what could be protected?

You have an idea for a product, logo, business, book, music, industrial design. Could the idea be a subject of protection?

Intellectual property is unique object which you have physically created – single idea could not be intellectual property, and cannot be a subject of IP protection.

 Than ok, so when I own intellectual property?

1. You have created something unique, that match all requirements established into the law for an industrial design, trade mark, a patent or copyright.

2. You have bought rights over intellectual property from its initial / previous owner.

3. You have well established brand, trade name / product that could be a trade mark.

What constitutes a violation of intellectual property rights?

Unlawful use by third parties of legally protected object-matter intellectual property, ie without the consent of and in spite of the holder of subjective rights constitutes a violation of rights to intellectual property.

The diversity and differences in the legal regime of intellectual property determining and the differences in the legal framework in relation to violations of the rights to them. Bulgarian law does not provide a general definition of infringement of an intellectual property.

1. Rights infringements subject to copyright.

2. Violations of the rights objects of industrial property.

3. Violations of all other rights of objects in relation to intellectual activity (the know-how and show-how).

Protecting copyright

The indication of the types of objects is not exhaustive, but to facilitate the application of the law lists various works of literature, art and science, such as literary works, including works of journalism and computer programs; music; stage works; films and other audiovisual works; works of art; works of architecture; photographic works; projects, maps, charts, plans, etc.; layout of printed matter; translations and adaptations of existing works; periodicals, encyclopedias, collections, anthologies, bibliographies, databases; arrangements of music and folklore.

According to the Law on Copyright and Related Rights

Art. 94 (1) Whoever violates the copyright, related right or any other right under this Act shall be liable to compensate the holder or the person who has been granted the exclusive right to use.

(2) Compensation shall be due for all damages which are the direct and immediate consequence of the breach.

(3) When setting the amount of compensation the court shall take into account all the circumstances of the breach, lost profits and non-pecuniary damage and revenue earned by the offender from the infringement.

(4) The court shall determine fair compensation that should a deterrent and a warning to the offender and other members of society.

Art. 94a. (1) Where an action is well founded, but there is not enough data on its size, the plaintiff may claim as compensation:

1. from five hundred to one hundred thousand Bulgarian Lev, as the amount is determined at the discretion of the court under Art. 94, para. 3 and 4, or

2. equivalent to the subject of the breach at retail prices of legitimate reproductions.

(2) On determining the compensation under par. 1 be taken into account and income resulting from the infringement.

 Other possible actions:

Art. 95 (1) Where a work of art objects by Art. 72 or databases by Chapter Eleven “A” is used in violation of the provisions of this Act, the right or the person who has been granted the exclusive right to use, can be legally enforceable:

1.  To be established the fact of infringement;

2.  The cessation of the unauthorized use or ban on activities that will constitute misuse;

3.  Seizure and destruction of illegal reproductions of artwork, objects of art. 72 or databases in Chapter Eleven, “a”, as well as negatives, matrices, cliches and other devices designed to reproduce copies;

4.  Seizure by use of dubbing, decoding and playback devices used exclusively for infringing;

5. To be forwarded to him the objects under item 3.

6.  Disclosure expense of the infringer of the operative part of the decision of the court in two daily newspapers and in a time zone from the court of television organization with national coverage.

(2) Seizure within the meaning of para. 1, p. 3 and 4 can be required, both in terms of objects located at a particular location and in terms of the objects situated in shops in general.

Legal persons and sole traders bear civil liability for violations of rights under this Act committed by the guilty persons who are, respectively, their employees or persons employed by them. In this case, guilt is assumed until proven otherwise.

Next post will be related to Violations of the rights objects of industrial property and its protection.

Compensation for delay due to contractor’ fault?

In view of the unification of jurisprudence in the presence of conflicting court decisions on the issue, the President of the Supreme Bar Council of Bulgaria Ralitza Negencova sends a statement on the matter with a request to be given an interpretative decision on the matter by the Supreme Court by interpretative case № 7/30 09. 2013.

 Members of the Supreme Bar Council

Members of the Supreme Bar Council

Does it owe a penalty for delay under Article 92, paragraph 1 of Obligations and Contracts Act, when the contract is terminated due to contractor’ fault?

The question referred was opened due to following controversial cases:

1. First solution was given by Decision 206 of 05.05.20010 on by Commercial case 18/2009 of the SCC, in which is assumed that when the parties have agreed default of late performance of the debtor’s obligation, then the contract is terminated by the complete failure, the debtor is liable to pay the agreed penalty by the claim on the ground art. 92 of the Obligations and Contract Act.

Considerations set out in the reasoning of the decision are that even on the basis of Article 88, paragraph 1, of the OCA sentence 1 termination of the contract leads to cancellation of obligations taken by the parties does not mean that the creditor is deprived of the right to claim compensation for non performance or damages by argument of art. 88, para 1, sentence 2 of the OCA.

2. Second solution was given by Decision №17 on 19.03.2010 by Commercial case 414/2009 of Supreme Court of Causation. This decision accepts that responsibility for damages caused by the cancellation of a contract in the form of penalty determined at the conclusion of the contract may be claimed only if such a default has been agreed to compensate the negative interest violations for the upstanding party, as such a possibility of compensation generally permitted in Article 88, paragraph 1, of the OCA sentence 2According to the court, in case of termination of the contract cannot enforcement being sought, nor have nonperformance and therefore if default has been agreed for the poor (slow) performance, it will not be due.

Тhe President of the Supreme Bar Council considered second solution for the proper one, explicitly making it clear that the issue in the two cited above hypothesis decision is not the case of termination of the contract with the continuous or periodic performance where the termination is effective only in the future, according to the provision of Article 88, paragraph 1, of the OCA sentence 2.

The arguments for this conclusion are as follows:

1. Breach of a contractual obligation exists in any case where the debtor does not perform exactly as agreed, i.e. both full default as well as accomplishing inaccurate, as the case may be inaccurate failure could be both quantitative and qualitative, and also in respect of time – the case of Article 79, paragraph 1 of OCA.

2. Breaching of contract is giving rise to the liability of the debtor, which correspond to certain rights of creditor. Thus, under Article 79, paragraph 1 and paragraph 2 of the Obligations and Contracts Act in case of default, the creditor is entitled to claim from the debtor (1) or performance with compensation for the delay or (2) compensation instead of performance, but in this second hypothesis, the debtor can offer initially due along with compensation for the delay if the contractor still has an interest in the implementation.

3. The forfeit is a clause into a contract that is associated with possible failure to meet obligations and compensation for damages of non-compliance. In this sense, the forfeit is secondary in nature, it is always associated with another primary obligation under the contract. According to the legal definition of forfeit in Article 92 of the Obligations and Contracts Act this contract term goals, on the one hand, to ensure the proper performance of the obligation and, on the other hand, serve as compensation for the damages of a possible default without the need such a damage to be proved either as type or size.

4. If based on nonperformance the creditor is suffering greater damage, he may claim compensation for the excess over the agreed default Article 92, paragraph 1, of the OCA sentence 2. But if a forfeit is excessive compared to the actual damage or if the obligation is fulfilled partly or incorrect, the debtor may apply to the court with a request to reduce its size Article 92, paragraph 2 of the OCA.

5. When the contract is bilateral and is canceled due to the fault of the debtor (Article 87 of OCA) according to Article 88, paragraph 1 of the OCA termination is retroactive, i.e. retroactively  drop out parties’ commitments and mutually they owe returning of given by the contract (Article 55, Paragraph 1, Proposal. 3 of OCA). Once the commitments are dropped and not performance is owed, it should logically nonperformance and dropout obligation to not constitute grounds for liability of the debtor. But the law takes account of the fact that it is the debtor’s wrongful conduct led to termination of the contract, thus expressly provides that in the case of termination, the creditor is entitled to compensation for damages from the breach of contract.

6. In view of the above, in bilateral agreements, various events of default are possible depending on the nature of the obligations and also depending on the different situations of failure inadequate performance or complete nonperformance. Accordingly, of any such cases of default, defaulting party would be responsible for damage caused by the breach, the parties may agree in advance what compensation would be due as agreed on a case for default for a delay penalty and the penalty for complete nonperformanceAnd if the law expressly provides for the right to compensation for damage caused by failure in termination of the contract, the parties could therefore still at the conclusion of the contract to understand the compensation of such damages as agreed penalty for failure, leading to termination of the contract.  This way for the correct party there will no be need to prove damage suffered by the termination of the contract and receive the agreed compensation.

7. In conclusion, applying the principle of contractual freedom (Article 9 OCA) parties to a bilateral contract may agree both as compensation for inaccurate (delayed) performance and default for failure, leading to termination of the contract. Accordingly, in an action for the award of default, the court in interpreting the contract and seeking the actual will of the parties (article. 20th OCA) should primarily clarify whether the alleged penalty was agreed for the case of poor performance or in the event of default giving rise to the termination of the contract. In the latter case, a penalty clause will be implemented despite the abolition of the contract retroactively, because the possibility of damages by such breach is expressly provided by law.  

Acquiring rights in another EU country to work at home not abuse

The Court of Justice held that the single market ability of citizens of the Union to choose the Member State in which they wish to receive the title and the Member State in which they intend to practice their profession is inherent in the exercise of the right guaranteed by the European Union fundamental freedoms.

Freedom of movement for EU lawyers

Freedom of movement for EU lawyers

In Joined Cases C-58/13 and 59/13 (Torresi / Consiglio dell’Ordine degli Avvocati di Macerata) of 17 July 2014 states that the fact that a national of a Member State holding a university degree acquired in his country and later has gone to another Member State in order to obtain a lawyer license and subsequently returned to their country to practice legal profession under the professional title obtained in another Member State is the specification of one of the objectives of Directive 98 / 5 / and do not constitute an abuse of the right of establishment.

EU Court recalls that in order to facilitate the continuous practice of the legal profession in a Member State other than the State in which the professional qualification was obtained, EU law introduces a mechanism for mutual recognition of titles of migrant lawyers wishing to practice under the title of his of origin.

Thus the EU legislature intends to eliminate inequalities in national conditions for entry, underlying inequalities and obstacles to free movement. Consequently, Directive 98/5 / EC aims at full harmonization of the conditions applicable to the right of establishment.

And that of course applies not only for people practicing the profession of lawyer, but also for other professions.

Free movement of working people is a key, basal principle of the Treaty enshrined in Article 45 of the Treaty on the Functioning of the European Union and developed by EU secondary legislation and the Case law of the Court of Justice.


In Europe entities are compensated for non-pecuniary damage – and in Bulgaria?

The European Court of Human Rights is one of the international jurisdictions with established practice recognizing the right of non-pecuniary damages to entities that deserves to be described.

Based on Art. 34 of the Convention on Human Rights, which expressly provides for the right of appeal of NGOs, in 1979 the Court recognized the legitimacy and companies.

Since violations of the Convention are awarded benefits primarily in respect of non-pecuniary damages logically Strasbourg began to recognize them and to legal persons.

Over the years, in various judgments, the Court recognized that there are non-pecuniary damage suffered by non-governmental organizations, political parties and companies.

Compensation may be simply expressed in a violation of the Convention, but there may take monetary expression.

During all these years the judicial practice in Bulgaria adheres to the opposite understanding that legal persons are not entitled to moral damages.

However and finally, in 2013 Interpretative Decision ? 4 SCC recognizes that legal persons are entitled to moral damages, at least when the legislature expressly provides.

Longstanding practice of the SCC is criticized in an article by Maria Lazarova, published in the blog Capital newspaper, in which the author recommends that it be abandoned as outdated and obsolete trends at national, European and global level.

In this articles are used materials from Lakorda.

Non-pecuniary damage for companies

Non-pecuniary damage for companies

Business Formations in Bulgaria I part

Possible business formations is a matter regulated under Bulgarian Commercial Act.  There are situated the rules with regards of incorporation, management, relation between shareholders and managers, insolvency, bankruptcy, liability and so on.

Issues not addressed in the Commercial Act are redirected to the general civil legislation of the Republic of Bulgaria.

Starting a business in Bulgaria is very easy and stress free, but which form may fit your needs. Well, that is what we will try in this post – to help you better understand the differences of possible business formations allowed by Bulgarian commercial legislation.

Normally these are business formations very similar to those known to other countries over the world. So let’s start with some general information.

19th century Bulgarian Merchants

19th century Bulgarian Merchants

 The law defines the term Merchant as follows:

For the purposes of this Act a merchant shall mean any natural or legal person engaged by occupation in any of the following transactions:

1. purchasing goods or other chattels for the purpose of reselling them in their original, processed or finished form;
2.  sale of one’s own manufactured goods;
3. purchasing securities for the purpose of reselling them;
4. commercial agency and brokerage;
5. commission, forwarding and transportation transactions;
6. insurance transactions;
7. banking and foreign-exchange transactions;
8. bills of exchange, promissory notes and cheques;
9. warehousing transactions;
10. license transactions;
11. supervision of goods;
12. transactions in intellectual property;
13. hotel operation, tourist, advertising, information, entertainment, impresario and other services;
14. purchase, construction or furnishing of real property for the purpose of sale;
15. leasing.

Merchants are as well:

1. Companies;
2. The cooperatives, except housing cooperatives.
3.  Any person which has established a business, which in accordance with its purposes and volume requires that its activities be conducted on a commercial basis even if not listed under para 1, shall also be deemed a merchant.

Well, Who Are Not Merchants:

The following shall not be deemed merchants:
1. Natural persons engaged in farming;
2. Artisans, persons providing services through their own labor or members of the professions, except where their activity may be defined as a business within the meaning of Article 1, para 3;
3. Persons providing hotel services by letting rooms in their own home.

Every Merchant is obligated to keep accounts in accordance with Accountancy Act.

Well, finally we are ready to go with possible company formations.


Any natural person possessing capacity whose domicile is in the country may register as a sole proprietor, except the following:

1. who is bankrupt and his rights have not been restored;
2.  who has intentionally gone bankrupt and has left unsatisfied creditors;
3.  any person who has been convicted for fraudulent bankruptcy;
4.  any person who has occupied the position of a manager, or an ex member of a managing or controlling body of a company that was suspended due to insolvency, in the last two years prior to the date of the decision to declare insolvency, in case there were unsatisfied creditors;

5.  who had been manager, member of managerial or supervisory body of any company, in regard to which non-performance of obligations to constitute and hold stocks under the Crude Oil and Petroleum Products Stocks Act at levels, prescribed for it, had been ascertained by an effective penal decree.

A sole proprietor shall be registered on the basis of an application into Commercial Registrar.

SOLE PROPRIETOR liability is unlimited. He is responsible with all his assets, even personal – real estate, land, etc.


There are two main group of companies based on their ownership:

1.  PUBLIC ENTERPRISE MERCHANT – state owned or municipality



A company is an association of two or more persons for effecting commercial transactions with joint means. In cases provided by a law a company may be incorporated by one person. Companies are always legal persons – entity.

There are few types of companies provided be law:

1.  General partnership;
2.  Limited partnership;
3.  Limited liability company;
4.  Joint-stock company;
5.  Partnership limited by shares.


A general partnership shall be a company formed by two or more persons for the purpose of effecting commercial transactions by occupation under a joint trade name. The partners shall be liable jointly and severally and their liability shall be unlimited.

A partnership’s articles shall be drawn up in writing with notarized signatures of the partners.

Each partner shall be entitled to take part in the management of the partnership’s business, except when management has been assigned with the articles of partnership to one or several of the partners or to a third party.

When taking an activity against the partnership the claimant may also name as defendants one or more of the partners. Forcible execution shall be directed first against the partnership, and, in case of impossibility for satisfaction, against the partners.

 Second Part should be available soon and will cover:

Limited partnership;
Limited liability company;
Joint-stock company;
Partnership limited by shares.


Number of aspects relating to appeals in civil cases reviewed

Into the Interpretative Decision N: 1 of 12.09.2013 of the SCC has been given answer to number of questions related to the powers of supervisory court instances in appeals of rulings and decisions ahead.

Supreme Court Judges clarify the scope of the second instance and indicate that the appeals court is not limited in its application of that when the next official interest of any party to the case.

In this sense, the SCC held that the verification of the correctness of the judgment at first instance may be given mandatory substantive rule even if its violation was not introduced as a ground for appeal.

Examining the activities of the appellate court, the SCC stated that it is not a repeat of first instance, only a continuation and therefore the appellate court did not follow its own motion made by the first instance court procedural irregularities in reporting the case.

Supreme Court Judges indicated that the appellate court is required to gather evidence that is collected automatically by the court if it is implemented complaint allowed in the first instance procedural violation or if the evidence is necessary for official application of mandatory substantive rules.

Supreme Court Judges pay attention to the question of how are current principal positions displayed in Interpretative Decision N: 1 of 2000. Has expressed the opinion that under the new Civil Procedure Code objections to repayment and acquisitive prescription can be introduced for the first time on appeal only if the litigant due to violation of the court rules, could not have told them first instance.

Current interpretations are on when can be claimed for the first time on appeal and set-off defense of lien.

In connection with the constitution of the litigants in the interpretative decision stated that if the first instance was not constituted as a  necessary party whose participation in production is required, the appellate court should invalidate as inadmissible first instance decision and remit the case to the trial court for new hearing with the participation of the necessary party.

The cassation instance should invalidate the appellate decision if it finds that the application is incorrect because a contradiction between the factual part, which sets out the allegations pointing interest in bringing proceedings to seek protection against a specific person, and whatsoever the relief sought against another person.

With regard to acts of first instance, subject to appellate review, the SCC determined that cannot be appealed first instance court‘s refusal to accept a joint processing step in the action.

On the other hand, may appeal, rejecting a request to increase the claim is not brought as a partial, and the definition / order of the first instance court, which was returned due to a cross-application outstanding guidelines to eliminate its irregularities .

As regards the scrutiny by the cassation instance, are not subject to such acts  CFI judgment that is discharged and the case was terminated if the claim is below 5000 lev in civil cases, respectively, less than 10 000 Levs in commercial matters.

Subject to cassation appeal the acts of the appellate court, which upheld the lower court‘s ruling, which was denied mainly constituted of an intervener, but not those with which it has upheld the lower court definition of refusing to constitute a third party facilitator.

By continuing to lists acts of the appellate court on which the cassation instance may control, the SCC stated that these are the definition of the appellate court confirming order of the first instance to terminate the proceedings because of lack of jurisdiction of the dispute, but not those confirming order of the Court, which was rejected based on objection of lack of jurisdiction.

Shall not be subject to appeal and the definition on the grounds of art. 122 of the Civil Procedure Code given in a dispute over jurisdiction between the courts.