Branch of a Bulgarian and foreign merchant in Bulgaria
Each merchant may open a branch outside the place where its seat is located. The decision to open or close a branch is taken by the general meeting of the partners, the general meeting of the shareholders, the sole owner of the capital, the sole trader or the relevant other body.
In its essence the branch has certain independence. The branch is a separate part of the enterprise and the property of a registered merchant. The branch is a territorially and organizationally distinct set of rights, obligations and factual relations. The branch is entered in the Commercial Register with its own seat, scope of activity, manager and procurator. The headquarters and the address of management of the branch may be relocated in the same way as the headquarters and the address of management of the merchant. The scope of activity of the branch may be different from the scope of activity of the merchant. The trade name of the branch incorporates the trade name of the merchant and the extension “branch”. The branch keeps trading books as an independent merchant, without preparing a separate balance sheet. The branches of legal persons which are not merchants within the meaning of the law and the branches of foreign persons prepare also a balance sheet. Actions based on disputes arising from a direct relationship with a branch may be brought against the merchant at the seat of the branch as well.
Despite these peculiarities the branch is not a separate legal entity. Transactions which are concluded by the person that manages the branch create rights and obligations for the merchant. When the merchant is in liquidation, declared in bankruptcy or is deleted all legal consequences thereof arise for the branch which is a part of the enterprise of the merchant. This means that the branch will also be in liquidation, in bankruptcy or will be deleted as well as the merchant. The branch may be transferred with the whole or as a part of the enterprise of the merchant. As a part of the merchant’s enterprise the branch may be apported.
A foreign person registered with the right to engage in commercial activity in accordance with its national law may also decide to open a branch in Bulgaria. When a foreign person opens a branch in Bulgaria in the Commercial Register must also be recorded data about:
- the legal form and the trade name or the name of the foreign person, as well as the branch name, if it differs from that of the foreign person;
- the register and the number, under which the foreign person is recorded, if provided for by the applicable law;
- the law of the state, applicable to the foreign person, if different from the law of an EU Member State;
- the persons, which represent the foreign person according to the register, where it was recorded, where such a register exists, the manner of representation, as well as the liquidators and receivers and their powers.