Withdrawal of a member from a Bulgarian limited liability company | Lawyer Mihail Tomov | Varna

Article 125(2) of the Bulgarian Commerce Act allows a member to give notice of withdrawal. Notice must be in writing. The notice period is three months unless the articles of association provide for a longer period. Membership ends on the date the notice period expires.

In Judgment No. 46 of 22.04.2010 in commercial case No. 500/2009, the Supreme Court of Cassation settled divergent case law by holding that expiry of the notice period under Article 125(2) automatically terminates membership in a limited liability company. Withdrawal under that provision does not require a resolution of the general meeting releasing the member, a financial settlement under Article 125(3), or a decision on what is to happen to the departing member’s shares. The Court reasoned that Article 125(2) gives each member the right, by written notice, to bring about a unilateral change in the company’s membership. Notice expresses the member’s freely formed intention. The only statutory requirements are that it be in writing and that it be given at least 3 months before the termination date. This is also the consistent position of the Supreme Court of Cassation in Judgment No. 7 of 14.03.2018 in commercial case No. 926/2017 of its First Commercial Division, Judgment No. 515 of 20.03.2002 and Judgment No. 991 of 29.01.2006 in commercial case No. 566/2006.

A member’s withdrawal and the settlement of financial relations between members call for the assistance of a lawyer experienced in commercial law. This article is not a legal opinion or advice on a particular situation, person or company, whether a limited liability company (OOD) or a joint-stock company (AD). For legal assistance in a similar case, consult a commercial lawyer.

Lawyer Mihail Tomov | Varna