Updated last 26.03.2021
What is the role of the general manager in the limited liability company (OOD)?
The Commercial Act (CA) requires that each limited liability company (OOD) has a general manager. The general manager is appointed by the general assembly of the company, and the company may have multiple general managers. The relations between the company and the general manager are regulated in a written contract for the assignment of the management (art. 141, para. 7 of the CA) – as it is commonly known „management and control contract (MCC)”.
|Important to know|
The MCC is not an employment agreement, but is considered equivalent to an employment agreement solely for the purposes of tax and social security law – i.e. taxes and social security contributions, such as would be payable, if the general manager is working under an employment agreement, are actually paid. This means that the general manager only has the rights and obligations, regulated in the contract – he does not benefit from the protection, ensured by the employment legislation, is not entitled to an annual leave, if no such leave is agreed in the MCC, and is not entitled to any additional remuneration and compensations, regulated in the Labour Code.
Who can be a general manager?
According to the CA, the general manager may both be a shareholder, and a person, who is not a member of the company. The general manager organizes and manages the company’s business and represents it in its the relations with third parties – he may convoke the general assembly of the company, to signs contracts on behalf of the company, etc. (art. 141 of the CA). When performing his functions, the general manager must observe the legal requirements and fulfil the decisions of the general assembly of the company.
Since the general manager is company’s representative, his name is registered with the Commercial Register, along with a document, evidencing his consent to manage the company and specimen of his signature.
Can а company’s general manager be replaced?
The general manager may be replaced at any time, and in this case the name of the dismissed general manager is de-registered from the Commercial Register (art. 141, para. 4 of the CA) and the name of the new general manager is registered. The replacement of the general manager may take place both at the request of the general manager, and at the initiative of company’s shareholders.
What is the procedure for the replacement of the general manager?
Convocation of a general assembly
The general assembly is convoked by company’s general manager at least once per year, and the general manager is obliged to convoke an extraordinary general assembly also at the written request of the shareholders holding shares of more than 1/10 of company’s capital. If the general manager fails to convoke a general assembly within two weeks of the submission of the request, the shareholders, requesting the convocation, may do that themselves. The general assembly is convoked by a written invitation, which must be received by all shareholders at least 7 days prior to the date of the meeting, unless otherwise provided in the articles of association. The invitation must indicate where and when the meeting of the general assembly will take place, as well as the relevant agenda – what matters will be discussed and decided on by the shareholders.
Making decisions of the shareholders
The decisions of the general assembly for dismissing the existing and the appointment of a new general manager are made by the majority of the holders of more than ½ of company’s capital. It is necessary to prepare minutes of the meeting with notarized signatures and contents, where both notarizations are to take place at the same time, unless the option for a plain written form is provided for in the articles of association. If these two decisions (for dismissing the existing general manager and for the appointment of a new general manager) are made at different meetings of the general assembly, the notarization requirements are only mandatory for the decision, by which a new general manager is appointed).
Registration of the changes in the Commercial Register
The decisions of the general assembly must be registered with the Commercial Register, so that the persons, who have relations with the company, are made aware of the change. The registration is based on an application, prepared according to Template А4, submitted to the Registry Agency of the newly appointed general manager of the company. The application may be submitted online, and this requires the use of a qualified electronic signature. Changes are usually registered with the Commercial Register between one and two weeks after the submission of the application.
|Important to know|
|If the application is submitted online, the payable registration fee is twice as low.|
The application, whether submitted online or on-site in the office of the Registry Agency, must be accompanied by the following documents:
- The decision of the general assembly for the change in the circumstances;
- A notarized document, confirming the consent of the newly appointed general manager to occupy that position, along with the specimen of his signature;
- A declaration by the new general manager, confirming the authenticity of the declared circumstances (as per art. 13, para. 4 of the Commercial Registry Act – see the template at the following address, in section ”Declarations”;
- A document, evidencing the payment of the state fee for the registration, unless it is paid electronically. The amount of the fee is defined in the Tariff of State fees, collected by the Registry Agency. Currently, if the application is submitted online, the fee amounts to BGN 15, while if it is submitted in the offices of the Registry Agency – BGN 30;
- A declaration by the new general manager confirming the lack of the circumstances under art. 141, para 8 of the CA – see a template at the following address, in section ”Declarations”.
|Important to know|
If the company has more than one general manager and the general assembly releases one of them, it is not necessary to appoint a new general manager. In this case the application to the Commercial Register for erasing the dismissed general manager is filed by the remaining general manager.
If the name of the dismissed general manager is registered with the articles of association, when submitting the application to the Registry Agency the newly appointed general manager must endorse and enclose 2 copies of the articles of association with the respective amendments therein (art. 119, para. 4 of the CA), as in one of the copies, all personal data, except from those, required by the Commercial Register and Register of the Non-Profit Legal Entities Act or another regulatory act.
In case of declaring false circumstances, the newly appointed general manager is liable, in accordance with the rules на the Criminal Code.
|For more information|
For more information on the replacement of the general manager and the related regulatory framework please refer to the website of the:
 The general assembly is composed of all the shareholders.
 The weight of the vote of each shareholder is proportionate to the share in company’s capital, unless otherwise expressly specified. Therefore, the decision may be made by two shareholders, if they own more than ¾ of company’s capital, although the shareholders, who may be more in numbers, are against the making of the decision.