Business Forms and Independent Professional Statuses in Bulgaria
Bulgaria offers a range of business structures and independent professional statuses, each with its own legal and operational framework. Understanding these options is crucial for entrepreneurs and professionals seeking to establish their presence in the country.
Business Forms
1. Sole Proprietorship
A sole proprietorship is a business owned and operated by a single individual. It is the simplest and most common business form in Bulgaria.
- Characteristics: No legal distinction between the business and the owner, unlimited liability for the owner.
- Benefits: Easy to establish, low administrative burden.
- Limitations: Owner bears all business risks and liabilities.
2. Partnership
A partnership is a business owned and operated by two or more individuals.
- Characteristics: Partners share profits and losses, unlimited liability for partners.
- Benefits: Shared responsibilities, potential for increased capital.
- Limitations: Potential for conflicts between partners, unlimited liability.
3. Limited Liability Company (OOD)
An OOD is a legal entity separate from its owners, providing limited liability to shareholders.
- Characteristics: Minimum of one shareholder and one director, shareholders' liability limited to their investment.
- Benefits: Limited liability, flexibility in ownership and management.
- Limitations: More complex to establish than a sole proprietorship or partnership, higher administrative burden.
4. Joint-Stock Company (AD)
An AD is a public company with shares traded on the stock exchange.
- Characteristics: Separate legal entity, shareholders' liability limited to their investment.
- Benefits: Access to public capital markets, enhanced credibility.
- Limitations: Stringent regulatory requirements, higher compliance costs.
Independent Professional Statuses
1. Freelancer
A freelancer is a self-employed individual who provides services to clients on a contractual basis.
- Criteria: Engaged in a profession or trade independently, without being employed by a specific employer.
- Rights: Flexibility in choosing clients and projects.
- Responsibilities: Managing own business operations, including marketing, invoicing, and tax compliance.
2. Independent Contractor
An independent contractor is similar to a freelancer but typically provides services to a single client or a small number of clients.
- Criteria: Engaged in a specific project or task for a limited period, without being an employee of the client.
- Rights: Flexibility in setting work hours and rates.
- Responsibilities: Managing own business operations, including invoicing and tax compliance.
Registration Process and Costs
Business Forms
- Sole Proprietorship: Register with the Commercial Register, no registration fee.
- Partnership: Register with the Commercial Register, registration fee of approximately €100.
- OOD: Register with the Commercial Register, registration fee of approximately €250.
- AD: Register with the Commercial Register, registration fee of approximately €500.
Independent Professional Statuses
- Freelancer: Register with the National Revenue Agency for tax purposes, no registration fee.
- Independent Contractor: Register with the National Revenue Agency for tax purposes, no registration fee.
Timeline
The registration process for business forms typically takes 1-2 weeks, while the registration for independent professional statuses is immediate.
Legal References
- Commercial Code: Governs the establishment and operation of business forms.
- Tax Code: Provides tax regulations and obligations for businesses and self-employed individuals.
- Law on Registration of Legal Entities and Natural Persons as Traders: Regulates the registration process for business forms.
Navigating the complexities of business formation and independent professional statuses in Bulgaria can be daunting. If you seek expert guidance, Heavnn is here to assist. Our team of professionals will simplify your journey, ensuring compliance and maximizing your business potential.
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