Register a Variable Capital Company (DPK) in Bulgaria — Startup Guide (2026)

What you will learn in this article

• What a DPK is and how it differs from an EOOD (Single-Member LLC) and a Joint-Stock Company (AD)
• The six steps to registration and what documents you need
• How much registration costs in 2026 (in EUR)
• How to structure your partnership agreement with share classes, vesting, and convertible loans
• What happens when your company outgrows the DPK size limits

What is a Variable Capital Company (DPK)?

The Variable Capital Company is regulated under Chapter XV “a” of the Bulgarian Commercial Act (Art. 260a–260ya). This legal form was introduced through amendments published in the State Gazette No. 66 of 01.08.2023. The filing of registration documents became technically possible on 15 December 2024, when the Registry Agency launched the electronic Application Form A19.

The DPK combines the flexibility of capital companies (similar to a joint-stock company) with the simplicity of managing an LLC. The legislature designed it as an instrument for early-stage companies that raise investment in multiple rounds and want to grant equity to key employees.

Under Art. 260a of the Commercial Act, a DPK may only be established by an enterprise that meets both of the following conditions:

• average number of employees below 50
• annual turnover and/or asset value up to BGN 4,000,000 (approximately 2,045,000 EUR)

If either condition ceases to be met, the company must convert into an OOD (LLC) or a Joint-Stock Company (AD). More on that below.

Why the DPK is the ideal structure for startups

No minimum capital and no escrow bank account

With a traditional EOOD/OOD, founders must open a collection (escrow) bank account and deposit the share capital before registration. Bank fees and the time needed to open such an account add both cost and delay.

With a DPK, these barriers are removed. Under Art. 260d of the Commercial Act, capital is contributed in cash against a receipt. There is no minimum capital requirement. The minimum value of a single share is 1 stotinka (less than 0.01 EUR). You can incorporate a company with virtually zero capital, without visiting a bank.

Share capital is not recorded in the Commercial Register

This feature has enormous practical significance for startups. In an OOD, every change in capital (increase during an investment round, decrease, admission of a new partner) requires a new filing with the Commercial Register along with state fees, notarial certifications, and waiting time.

In a DPK, the capital is variable by definition. Its amount is established by resolution of the annual general meeting (Art. 260d, para. 2 of the Commercial Act). When you raise a Seed or Series A round, you do not need to file a new application with the Commercial Register for a capital change. This saves both fees and weeks of processing time.

Multiple share classes for investors and founders

A DPK can issue shares of different classes, similar to preferred shares and common shares in US corporations. Under the Commercial Act, privileges attached to share classes may include:

• the right to more than one vote at the general meeting
• a guaranteed or additional dividend
• a priority liquidation preference
• a buyback right
• a veto right on certain decisions

In practice, founders can hold Class A shares with extra voting rights, while investors hold Class B shares with a liquidation preference. This structure closely mirrors the standard setup in Delaware or Estonia, which makes communication with international VC funds straightforward.

Employee stock options

Under Art. 260i1 of the Commercial Act, the general meeting may grant employees (under employment or service contracts) the right to acquire shares in the company. The limit is 15% of all shares.

A written agreement is entered into between the company and the employee for granting this right. Transfer of acquired shares may be restricted for up to 5 years (lock-up period). The right to acquire shares is non-transferable but may be inherited.

This is a direct equivalent of an employee stock option plan (ESOP), built into the law. For the first time in Bulgarian law, startups can legally and predictably incentivize their team with equity participation.

Convertible loans (SAFE equivalent)

The Commercial Act explicitly regulates convertible loans for DPKs. This is the Bulgarian equivalent of a SAFE (Simple Agreement for Future Equity) or a convertible note.

The investor provides a loan to the company with the agreement that upon a triggering event (typically the next funding round), the loan converts into shares. Since the capital is not recorded in the Commercial Register, conversion takes place without a cumbersome administrative procedure.

Practical tip: If you plan to raise early-stage funding through a convertible loan, the DPK is the only Bulgarian legal form where this instrument is explicitly regulated by law.

DPK vs EOOD vs AD — comparison table

Before deciding whether the DPK is the right choice, review this detailed comparison with the two other popular business forms:

If you are building a technology company, planning to attract investors, and want to offer equity to your team, the DPK is the clear choice. If you are running a shop, restaurant, or consultancy with no plans for outside investors, an EOOD remains the simpler option. Read more about registering a company in Bulgaria in our detailed guide.

Step by step: How to register a DPK

To make the process more concrete, we will follow Maria, a software engineer who is leaving her corporate job to launch a SaaS startup with two co-founders.

Step 1: Draft the partnership agreement

Maria and her two co-founders must prepare a partnership agreement (if there is a single founder, the document is called a founding act). Under Art. 260v of the Commercial Act, the partnership agreement must contain at least:

• the company name and registered address
• the scope of business activities
• the names and details of the shareholders
• the size of the shares and the conditions for contributions
• the rules for management and representation

Maria decides to include three share classes: Class A (founders, with extra voting rights), Class B (future investors, with a liquidation preference), and Class C (employees, with a 4-year lock-up). Drafting such an agreement takes 3 to 5 business days with legal assistance.

Step 2: Hold the founding meeting

The three co-founders hold a founding meeting at which they:

• adopt the partnership agreement
• elect a manager (Maria)
• determine the size of initial contributions

A protocol (minutes) is prepared and signed by all founders. If the company will have a management board rather than a single manager, the members of the board are also elected at this meeting.

Step 3: Contribute the capital

Maria and her co-founders decide to start with capital of 100 EUR (approximately 33 EUR each). The contribution is made in cash against a receipt. There is no need to open a bank account at this stage. The receipt for the contributed capital is one of the registration documents.

Unlike with an EOOD, no bank documents proving the capital deposit are required (Art. 260g of the Commercial Act).

Step 4: Prepare the remaining documents

Maria prepares the full set of 11 documents (described in detail in the next section). The manager must have the declaration under Art. 260ts, para. 4 of the Commercial Act notarized, along with the consent to serve as manager and the signature specimen.

The notarial certifications require one visit to a notary and cost approximately 20 to 50 EUR.

Step 5: File with the Commercial Register

Maria chooses to file the documents electronically through the portal of the Registry Agency. She uses a qualified electronic signature (QES) for this purpose. The state fee for electronic filing is 28 EUR (BGN 55), a 50% discount compared to paper filing.

Documents can also be filed by a lawyer with an explicit written power of attorney. In this case, notarization of the power of attorney is not required.

Step 6: Entry in the Commercial Register

Registration is typically completed on the next business day after filing. Once registered, the DPK receives a UIC (Unified Identification Code) and may begin its operations.

Maria receives registration on Wednesday, one day after filing. The entire process from decision to incorporation took her 5 business days (including document preparation and notarizations).

Required documents for registration

Filing Application Form A19 with the Commercial Register requires the following 11 documents:

1. Application Form A19 — completed on paper or electronically through the Registry Agency portal. Electronic filing qualifies for a 50% fee reduction.
2. Minutes of the founding meeting — containing the resolutions for adopting the partnership agreement, electing a manager, and determining contributions. Signed by all founders.
3. Partnership agreement (founding act for a single-member DPK) — the primary document of the company. Submitted in two copies: an original and a copy with redacted personal data (for the public part of the register).
4. Minutes of the management board — required only if the DPK is managed by a management board. Contains the resolution for electing an executive director.
5. Declarations under Art. 260a, para. 2 of the Commercial Act — submitted by each founding shareholder. These declare that the company meets the DPK size requirements.
6. Notarized declaration under Art. 260ts, para. 4 of the Commercial Act — submitted by the manager or each member of the management board. Requires a visit to a notary.
7. Notarized consent and signature specimen — the manager (or executive director if there is a management board) gives consent to serve and provides a specimen of their signature.
8. Declaration under Art. 13, para. 4 of the Commercial Register Act — a standard declaration confirming the accuracy of the stated facts.
9. Declaration under Art. 13, para. 5 of the Commercial Register Act — required only if documents are filed by a representative (other than a lawyer).
10. Payment receipt for the state fee — proof of payment of the registration fee.
11. Power of attorney — required only if documents are not filed personally by the manager. A lawyer’s power of attorney does not require notarization. A power of attorney issued to another person must be notarized, and in that case the Application Form A19 itself must also be notarized.

When a founder is a legal entity, a resolution of the competent body of that legal entity authorizing participation in the formation must also be submitted. If the legal entity is foreign, a certificate of good standing is also required.

Registration costs for a DPK (2026)

All amounts are in EUR, as Bulgaria joined the eurozone on 01.01.2026.

Electronic filing saves 28 EUR on the state fee and is faster. If you do not have a qualified electronic signature, you can obtain one from providers such as B-Trust, Evrotrust, or InfoNotary for about 25 EUR.

Legal fees vary significantly. The lower end (250 to 350 EUR) typically covers a standard partnership agreement without complex clauses. The higher end (500 to 800 EUR) covers drafting an agreement with multiple share classes, a vesting schedule, convertible loan clauses, and drag-along/tag-along rights.

Hidden costs with an EOOD that do not exist with a DPK: In an OOD/EOOD, every capital increase or admission of a new partner requires a new filing with the Commercial Register (fee ~28 EUR electronic + legal/notarial costs). With a DPK, these ongoing costs are eliminated because neither the capital nor the shareholders are recorded in the register.

The partnership agreement — key clauses

The partnership agreement is the foundation of the DPK. The law gives shareholders significant freedom to regulate their mutual relations, so drafting it properly is critically important. Here are the clauses that deserve special attention for a startup company:

Share classes and privileges. Define which share classes will exist from the outset. A typical structure includes ordinary shares (Class A) for founders and preferred shares (Class B) for investors. Investor class privileges usually include a liquidation preference and a veto right on certain key decisions.

Vesting (earning shares over time). Although the law does not use the term “vesting,” Art. 260i1 of the Commercial Act regulates the right to acquire shares for employees with a lock-up of up to 5 years. For founders, a similar clause can be included in the partnership agreement, such as a 4-year vesting schedule with a 1-year cliff. This protects the remaining shareholders if a founder leaves early.

Drag-along (forced sale right). Allows majority shareholders (or shareholders holding a specified percentage) to compel the others to sell their shares in a whole-company sale. This clause is standard in VC investments and necessary to ensure a clean exit.

Tag-along (co-sale right). Protects minority shareholders. If a majority shareholder sells their shares, minority holders have the right to sell theirs on the same terms. This balances the drag-along clause.

Right of first refusal. Before a shareholder can sell shares to a third party, they must offer them to the remaining shareholders on the same terms. This prevents unwanted third parties from entering the company.

Lock-up restriction. The law allows share transfers to be restricted for a specified period. For startups, the typical founder lock-up is 2 to 4 years.

Convertible loans. Set out the conversion procedure: what triggers conversion, the discount relative to the next round valuation, and the valuation cap. Since capital is not recorded in the Commercial Register, conversion is significantly simpler than the equivalent process in an OOD.

Decisions requiring a supermajority. Define which decisions require 75% or unanimity: amendment of the partnership agreement, issuance of new shares, conversion, and liquidation.

Advice from our practice: Do not copy a partnership agreement from the internet. Standard templates do not include the clauses for share classes, vesting, and investor rights that make the DPK valuable for startups. The investment in a professionally drafted agreement pays for itself many times over at the first funding round.

What happens when a DPK outgrows its limits?

Under Art. 260a of the Commercial Act, a DPK may exist only as long as the enterprise meets both cumulative conditions:

• average number of employees below 50
• annual turnover and/or asset value up to BGN 4,000,000 (~2,045,000 EUR)

When the company exceeds either threshold, it must convert into an OOD or a Joint-Stock Company (AD). The law provides a reasonable timeframe for this conversion, so there is no need for panic if a limit is temporarily exceeded.

In practice, most startups that reach these thresholds already need a more complex corporate structure, such as an AD with a board of directors in preparation for a future IPO or M&A transaction.

Converting from a DPK to an AD is not as dramatic as it sounds. Share classes are “translated” into classes of stock, and investor privileges are carried over into the articles of association of the new company. The key is for the DPK partnership agreement to contain a conversion clause that regulates this process in advance.

Frequently asked questions