General partnership – Legal Status & Tax Frame

The General partnership type of company is under the regulations of the Bulgarian Commercial Code – from Article 76 to 98. The legal definition provided by the Article is the following: General partnership is company associated by two or more people for trading purposes effecting the commercial transactions made under joint trade name.

All of the partners in the partnership are liable with their assets and are joint debtors. Every partners’ liability is persona, subsidiary and unlimited regarding the obligations of their general partnership. The whole General partnership belongs to the partners in it and no one else. The personal participation of every partner in this type of partnership can be characterized by the personal participation in the business operations.

Because the General partnership has personal character, the trade name of the company has to contain at least the name of one partner but more can be added too. The partnership articles have to be signed by every single partner and to be notarial certificated. Also the registration application form has to be signed by all of the company members and persons that can represent the partners and the whole partnership – they have to deposit also a signature specimen.

The Bulgarian commercial law distinguishes two types of legal relationships in the General partnership which are internal – between the partnership and the members in the company, and external – between the partnership and third parties. The internal relations are regulated by the Articles of Partnership and the external by the Commercial Code.

The internal relationship can be about material and nonmaterial stuff. The material are the rights on things like shares in profit, liquidation quotas, compensations and so on. The nonmaterial can concern the rights of management in the partnership, the disposal and acquirement of immovable property, appointments, legal transactions, voting rights, examination of the partners and so on.

There are also obligations for the material and nonmaterial things as the obligations to pay interest or provide contribution, which are material, and the obligations of loyalty and personal character which are immaterial.

As we mentioned above, the external relationship in the General partnership is legal and it is between the partners and other third parties. It is under the legislation of the Commercial Code.