What is an EOOD? Bulgaria's single-owner company

Companies and taxes · Last reviewed: 2026-08-23

Ownership and management are separate offices

An EOOD has two distinct roles, and most confusion comes from merging them. The first is sole owner of the capital: this is who the company belongs to. That person exercises the powers of the general meeting alone, decides on profit distribution and on any change to the capital. The second is the manager, who represents the company towards third parties, signs contracts, operates the bank account and answers for statutory filings. In small companies one person usually holds both roles, but nothing requires it — an owner living abroad can appoint a resident manager.

The practical consequence is simple. Ownership alone confers no signing authority, and management does not make the manager an owner. The scope of representative power is fixed in the constitutive act and published in the register; third parties are entitled to rely on what the register shows.

What limited liability actually limits

Limited liability means the owner does not answer with personal assets for the company's debts; exposure is, as a rule, confined to the contributed capital and the company's own property. That shield is not absolute. A manager can incur personal liability by neglecting statutory duties — failing to file, concealing public liabilities, or continuing to trade while the company cannot meet its obligations. Nor does the shield help where a bank has required a personal guarantee, because there the individual has undertaken the obligation directly.

EOOD, sole trader and freelancer compared

Capital and currency

Article 117 of the Commercial Act provides that the capital of a limited liability company may not be less than 1 euro and that a single share may not be less than 1 eurocent. An EOOD can therefore be incorporated with a symbolic capital. Following the euro changeover on 1 January 2026 the capital already recorded in the register was redenominated automatically, and the Registry Agency set a transitional window in which companies bring their constitutive documents into line with the converted amounts. A minimal capital is lawful but not always commercially wise: banks, landlords and larger counterparties often read it as a signal about how serious the business is.

How profit reaches the owner

1. 1

   The company determines its profit

   At year end income and expenses are closed and the accounting profit is established. Corporate income tax is charged at 10 per cent under Article 20 of the Corporate Income Tax Act.
2. 2

   Post-tax profit becomes distributable

   The sole owner decides whether to distribute a dividend or retain the profit in the company. The decision is recorded in writing and reflected in the accounts.
3. 3

   Dividend withholding applies

   Article 194 of the same act imposes a 5 per cent withholding on dividends and liquidation proceeds. The obligation to withhold and remit falls on the distributing company.
4. 4

   Manager's remuneration is a separate track

   Pay under a management contract is taxed and insured on its own basis. Blending the two tracks is the most common bookkeeping error in small companies.

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