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Definition
Article 277
- (1)
- A holding company shall be a joint stock company, a partnership limited by shares or a limited liability company the purpose of which is to participate under any form in other companies or in their management, regardless of whether it carries on manufacturing or commercial activities of its own.
- (2)
- At least 25 percent of the capital stock of a holding company must be invested directly in subsidiary companies.
- (3)
- A subsidiary company is a company in which a holding company owns or controls, directly or indirectly, at least 25 per cent of the stocks or shares and is in a position to appoint, directly or indirectly, a majority of the directors.
Purposes
Article 278
- (1)
-
The purposes for which a holding company is set up may be:
- 1.
- acquisition, management, valuation and sale of interest in Bulgarian or foreign companies;
- 2.
- acquisition, management and sale of debentures;
- 3.
- acquisition, valuation and sale of patents, assigning licences for the use of patents of companies in which the holding company owns an interest;
- 4.
- financing of companies in which the holding company owns an interest.
- (2)
-
A holding company may not:
- 1.
- participate in a partnership which is not a legal person;
- 2.
- acquire licences which are not intended for use by the companies controlled by it;
- 3.
- acquire real property which is not required by its needs. The acquisition of stock in real estate companies is permitted.
Taxation of Holding Activities
Article 279
Credits Given by Holding Companies
Article 280
- (1)
- A holding company may extend loans only to companies in which it participates directly or which it controls.
- (2)
- The amount of the extended loans may not exceed ten times the capital stock of the holding company.
- (3)
- The amount of the deposits of subsidiary companies and enterprises in a holding company may not exceed three times the amount of the capital stock.
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