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Appointing a commercial representative / proxy / procurator or commercial manager in Bulgaria is a key step for any commercial company, including sole proprietors (ET), EOOD (limited liability companies), JSC (joint-stock companies), and other legal business entities. This role is essential for the management and representation of the entity in different situations. The commercial representative / proxy / procurator has the right to perform actions on behalf of the company, with almost all the rights of the CEO (company manager or general director), which allows the business to function smoothly even when the CEO is absent or busy with other tasks.
A common practice is the appointment of a commercial representative / proxy / procurator when expanding the company's activities, such as opening a new branch. In such cases, the commercial representative / proxy / procurator (or commercial manager) acts as a materially responsible person managing the new site and representing the interests of the company in that location. This is a convenient and effective solution that avoids the need to register a new company.
In addition, the appointment of a commercial representative / proxy / procurator turns out to be useful in situations where the manager of the EOOD or the sole trader is on long leave, for example, during pregnancy and raising a child up to 2 years of age. Thus, the company's management does not suffer from the absence of the manager and continues to function effectively, while providing the manager with the opportunity to receive compensation from the NOI.
According to Art. 21 of the Commercial Law, the appointment of a commercial representative / proxy / procurator involves the fulfillment of certain legal requirements and procedures. It is important to understand that the commercial representative / proxy / procurator has significant powers and responsibilities, and his appointment should be approached with attention and understanding of the consequences of this decision. In this material, we will consider everything about the appointment of a procurator/commercial manager, the entry of the so called "procuration" in the commercial register and the necessary documents.
A commercial representative / proxy / procurator , sometimes referred to as a commercial manager, as per the Bulgarian legislation - "The Commerce Act" is a natural person authorized by a trader to manage and represent his commercial enterprise. It plays an important role in the management structures of the company, since it has the authority to carry out various activities related to the commercial activity of the company.
The establishment of the commercial representative / proxy / procurator requires the conclusion of two main transactions. The first is the contract on internal relations between the trader and the proxy, which regulates issues such as remuneration, working hours and other internal aspects of their working relationship. The second transaction is the so-called “procuration” - a notarized power of attorney that defines the rights of the representative. It is important to note that this power of attorney determines the rights of the representative, but not his duties.
The so called "procuration" must be entered in the commercial register, where the signature of the proxy is also registered. This entry has both declarative and certifying significance, ensuring clarity and transparency in the relations of the proxy with third parties and allowing easy verification of his credentials.
In case you need help in preparing documents or concluding a contract with a proxy, you can contact us at Elan Consulting for professional advice and support. Our experts are at your disposal to help you with all aspects of the process.
The powers of the representative (commercial manager) in Bulgaria are regulated in detail in Bulgarian legislation and are essential for the proper functioning of commercial enterprises. The proxy acts on behalf of the company / merchant (regardless of the chosen legal form - LLC / LTD / JSC ) who authorized him, and in this regard it is important to sign as a representative of the company, adding to the company name his name and an indication that he acts as a proxy.
According to the Commercial Law, the powers of the proxy include:
Despite these extensive powers, there are also some limitations. For example,the commercial representative may not alienate or encumber the real estate of the trader, unless he is specifically authorized to do so. In addition, the proxy cannot re-authorize another person with his rights by law, but solely to perform specific actions. These restrictions are put in place to ensure that key decisions and transactions that may have a significant impact on the firm are taken with due consideration and approval by the trader.
What does it mean “the proxy cannot re-authorize another person with his rights under the law?- There is a principle in law that states that no one can transfer to another more rights than he himself has. In this sense, this prohibition affects situations in which a proxy authorizes another person to become a proxy himself. Such an action can only be performed by the manager or CEO of the company!
The authorization of the commercial representative / proxy / procurator in Bulgaria and the conclusion of a commercial management contract are two separate, but mutually complementary aspects in the establishment of the representative in a commercial company.
The Prosecutionis the official authorization that gives the proxy the authority to act on behalf of the trader. It is mandatory to be notarized with the signature and is subject to entry in the commercial register. The trader can authorize several natural persons at the same time as his own proxies, and they can act alone or jointly. This flexibility allows the firm to adapt the level of representation according to its needs, especially when concluding contracts of greater value, drawing loans and the like.
The commercial management contract(or the contract for the representative) is essential because it defines the working relationship between the proxy and the merchant. It can be formulated as employment or civil contract to order. It is important to note that this contract is mandatory, since the so called "procuration" itself does not create obligations for the procurator , but only rights. The contract for the procuration should regulate in detail all the rights, obligations, restrictions, prohibitions on performing certain actions, the responsibility of the procurator , as well as the conditions for termination of the contract.
The contract for the procurator is always remunerated, which means that the procurist has the right to remuneration for his services. Even if the so called "procuration" is not entered in the commercial register, case law recognizes that the trader owes the proxy the agreed remuneration. Additional bonuses may also be provided depending on the results achieved.
The contract for a procuration can be both indefinite and for a fixed term. Through it, the proxy is entrusted with the operational management of the company or sole trader, his representative power is usually more limited than that of the manager.
A number of documents are required for the appointment of a proxy / procurator (commercial manager) and the entry of the representative in the commercial register. in Bulgaria. These documents are mandatory for the successful and lawful settlement of the rights and obligations of the proxy. The main documents include:
Depending on the specific case, additional documents such as a certificate of current status, invitations to convene a general meeting and others that are specific to the specific circumstances surrounding the appointment of the representative may be required. It is important to always consult with a legal professional to ensure that all necessary documents are correctly prepared and filed.
The state fee for registering a proxy in the Commercial Register is in the amount of40 leva, when documents are filed over the counter at the Registry Agency.
If the documents are submitted electronically, then the fee is halved to 20 (twenty) leva.
Termination and deletion of a contract for a procuration, as well as the withdrawal of a power of attorney by a representative, is a process that must be carried out in accordance with legal requirements. The procedure is essential for the correct settlement of the legal status of the proxy and for the protection of the interests of all parties.
At the termination of the prosecution, it is important that all procedures are carried out correctly, including the notification of the parties concerned and the entries in the commercial register. This ensures the legality of the procedure and protects both the interests of the trader and the proxy.
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The commercial proxy / representative has the right to carry out all actions related to the exercise of the company's commercial occupation. He can represent the trader in various situations and authorize other persons to perform individual actions. It is important to note that there are also some restrictions - the prosecutor cannot alienate or encumber real estate to the trader without special authorization.
The contract with a commercial proxy / representative can be terminated in several ways - by mutual agreement, with the expiration of the contract (if one is agreed), unilaterally by the prosecutor on notice, upon the death or imprisonment of the prosecutor, upon transformation or liquidation of the company, as well as in other cases, agreed in the contract.
For the appointment of a commercial proxy / representative , the following are required: application B1, a notarized sample of the proxy signature, a declaration under Art. 21, para. 3 of the Commercial Law from the prosecutor, a prosecutor's office with a notarized signature, a decision of the competent body of the company on the appointment of a prosecutor, declarations under Art.. 13, paras. 4 and 5 of the ZTRRULNC, power of attorney (upon submission by proxy) and payment order for a paid state fee.
