Leaving a limited liability company by giving written notice of withdrawal is one of the ways of termination of membership in Bulgaria. It is most often used when the partner cannot sell his shares to the other partners or to a third party.
The notice of withdrawal is a letter by which a partner notifies other partners of his/her intention to withdraw from a company. No formal requirements are prescribed for such notice. It does not matter why the partner wants to terminate his membership.
The partner must give at least 3 months’ prior written notice to cease his participation in the LLC.
The notice of withdrawal must be delivered to the company. It can be submitted to the company’s office or sent by mail, courier, email, etc. In order to avoid the risk of a dispute regarding the date of receipt, the notice is usually given by a notary.
The 3 months’ withdrawal period starts from the date of the receipt by the company. Upon its expiration, the participation of the partner is terminated automatically. Therefore, an approval by the General Assembly of the partners is unnecessary.
The membership in a limited liability company in Bulgaria is terminated from the date of expiration of the withdrawal period.
Please note that the Articles of Association may contain different withdrawal period and additional conditions to leave a LLC.
Upon expiration of the withdrawal period the departed partner has the right to receive the monetary equivalent of his shares. The shares shall be estimated on the basis of the interim balance sheet prepared at the end of the month in which the notice expired.
The law does not allow the calculation of the amount of the company shares to be based on the market price of the assets.
If the balance sheet at the time of leaving is negative, the departed partner will not receive anything against his shares.
As well, the law does not specify a term within which the company must pay the share of the departed partner. However, such term may be provided for in the Articles of Association. If the partners have not agreed on a term, the claim of the leaving partner becomes due upon expiration of the withdrawal period.
If the company does not pay the share or if the withdrawing member does not agree with the assessment of his share, he may file a claim against the company.
There is no obstacle for the departed partner and the company to conclude an agreement in which to agree on the amount, terms and manner of payment of the share.
Upon leaving a partner, the remaining partners may:
- buy the shares of the withdrawing member, or
- reduce the capital of the company with the shares of the departed partner, or
- take over the released shares and pay their value to the company’s account.
Upon expiration of the withdrawal period the company is obliged to expunge the departed partner from the Commercial register.
It is not necessary to provide evidence to the Commercial register that the share of the departed partner has been paid.
Leaving a limited liability company become effective vis-a-vis third parties as of the date of its entry in the Commercial Register.
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