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The VCC company allows easy transfer of shares, no requirements for a capital deposit, flexible corporate structure, suitable for small to midsize businesses

A variable capital company has some key differences from the traditional limited liability companies offering more flexibility in the corporate structure and incorporation process. On the first place there is a requirement VCC company must have a turnover of less than 4 000 000 BGN per year, it must not have assets exceeding 4 000 000 BGN in value and must have and less than 50 personnel. The idea behind the restriction of the capital is to give opportunity for a new venture while considering the possible financial risks for new investors. Another key feature is that there is no capital deposit in a bank account - so no need for foreign investors to apply before Bulgarian banks for capital deposit approval;

Shareholders names are not listed in the company commercial register - this is another key feature of the VCC company. Shareholders names are written in the book of shareholders where the company director records also shares transfers. However the shareholders' names are not entirely hidden as the AML requirement of the Bulgarian laws introduced an obligation of the company director to announce in a separate filing the names of the shareholders with significant control;

There can be different types of shares with different privileges and obligations /for example shares which can not to be transferred in certain period/ similar to the Joint Stock company;

The law provides flexibility in management of the VCC company allowing both a sole manager (a director) and a collective (board of directors). The company has the option to switch from one option to the other to suit the needs of the business;

The VCC company can have a remote /online/ meeting of shareholders which purpose obviously suits non-residents. Its good to mention that limited company /EOOD or OOD/ an easily manage the location of the general meeting by providing a power of attorney to a local agent;

The transfer of shares can be in a plain written form or a notarized form. Choosing the plain written form of shares transfer contracts allows simplicity and flexibility in accepting new shareholders. However the notarized form has the advantage of being safer and can be preferred in certain occasions. Its worth mentioning that a major obstacle for many investors using the EOOD/OOD type of company in Bulgaria was the cumbersome procedure of transfer of shares which the VCC company type can overcome;

The VCC company can have two type of shareholders - i.e. investors only and shareholders who participate in the activity with their personal contribution. So the VCC company can be seen as a lightweight Joint stock company allowing personal bond of shareholders like in OOD and valuing the personal effort as in the general partnership;

If you are interested in more details in regards to the legal specifics and possible advantages of VCC company you can contact us for more detailed information.