The joint-stock company is a classic capital trade company in which there is almost a full detachment between the legal entity and the shareholders. For that reason the partners are called shareholders. The capital of the company is divided into equal parts, called shares. The shares are securities which materialize the capital and the participation in the joint-stock company.
The joint-stock company has the following distinguished characteristics:
– It is the most suitable legal form for attracting a huge amount of capital;
– Through it, the economic risk of the participants is being reduced and transferred to a certain extent to the creditors of the joint-stock company;
– The joint-stock company provides the possibility for the relatively easiest transfer of share participation on other parties;
– The joint-stock company is a legal entity with exclusive responsibility where the shareholders are not responsible for the joint-stock company’s liabilities;
Because of the above listed characteristics the joint-stock company is a widely spread and very popular form of legal entity in Bulgaria.
The joint-stock company is being established with a decision of the Constituent Assembly. The members of the Constituent Assembly make the decisions the joint-stock company to be established, the by-laws to be accepted and the management board to be selected and approved. The decisions related to the company’s establishment must be made in full agreement between the participants. A distinction should be made between the declared, the recorder and the actual deposited capital. The declared and the recorder capital amount should match and the actual deposited capital should not be less than 25% of the recorder capital.
The shareholders have rights and obligations which are property and non-property. The property rights are the right for receiving a dividend, the right for interest on the deposited contribution and the right for liquidation share.
– The dividend is a basic property right of the shareholders which is proportional to the nominal value of the owned shares.
– The right for interest on the deposited contribution is more of an exceptional case as it is in contradiction with the right for dividend. For receiving interest, this should be not only accepted by the General Assembly, but also this should be explicitly appointed in the by-laws.
(to be continued)