Under Article 175(1) of the Bulgarian Commerce Act, a share is a security certifying that its holder participates in the capital of a joint-stock company to the extent of its stated nominal value. A registered share in certificated form is itself an item of property: rights over the certificate can be exercised through possession of it. A certificated registered share is issued to a named person. Under Article 183(3), the first owner\u2019s name appears on the face of the certificate and subsequent owners\u2019 names on the reverse: ownership is identified by the name recorded on it. Registered shares may be transferred by endorsement; transfer by assignment has also been recognised in practice. If a certificate has been lost or stolen and has not been cancelled under Articles 456\u2013464 of the Code of Civil Procedure, the holder remains a shareholder in relation to the company, even though the lack of physical possession prevents the holder from exercising the rights embodied in the certificate.<\/p>\n
An endorsement is a unilateral, formal and abstract transaction. The endorsee succeeds the endorser to the membership rights embodied in the security, including a provisional share certificate. As a rule, the endorsement does not state the legal basis on which the endorser transfers those rights. That basis is found in the underlying transaction, which, on the reading of Article 465 of the Commerce Act discussed here, accompanies the endorsement. An endorsement of shares serves a secondary function: it gives effect to a particular underlying transfer, although as an abstract transaction it takes outward form in the endorsement written on the document itself. On the analysis presented here, the underlying obligation rests on a transaction with a legal basis; if that basis is absent or defective, the endorsement serving it is likewise void for want of a legal basis.<\/p>\n
This article is not a legal opinion or advice on any particular situation or person. For assistance in a similar case, consult a commercial lawyer about the shares and their transfer.<\/em>
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