Changes in the issuance proceedings of the “EU Blue Card” for access of highly qualified foreign nationals to Bulgaria
WHAT IS THE PURPOSE OF THE SO-CALLED “EU BLUE CARD”?
The “EU Blue Card” enables highly qualified third- country nationals, employed by a Bulgarian employer, to exercise highly qualified employment under an employment relationship in Bulgaria.
A set of new, easier rules for issuing an “EU Blue Card” for access to the labor market of third-country nationals are in force since the 25th of January 2023.
The new set of rules introduces a more flexible regime for accepting highly qualified third-country nationals in Bulgaria, providing opportunities for remote work, for long-term and short-term business trips, including in the territory of the EU.
CHANGES IN THE LABOR MIGRATION AND LABOR MOBILITY ACT
• With Issue № 8 from the 25th of January 2023 of the State Gazette, The Labor Migration and Labor Mobility Act was amended and supplemented, which resulted in indirect changes to the Foreigners in the Republic of Bulgaria Act.
• The introduced changes facilitate the terms and conditions for attracting highly qualified specialists in all sectors of our economy through the issuance of the so-called “EU Blue Card”.
WHAT DO THE CHANGES ENVISAGE ?
• The scope of people, considered to be engaged in a highly qualified employment, is being expanded. In addition to the current requirement for the presence of a university education, the possibility of recognizing a minimum of 5 years of experience and education, which is comparable to an acquired university education, is being introduced. The needed documents can now be submitted electronically.
• An opportunity for remote work from Bulgaria and abroad is presented for the first time.
• Holders of the “EU Blue Card”, issued by the Republic of Bulgaria, have the opportunity to enter and reside in another member state for a period of up to 90 days within a period of 180 days for the purpose of carrying out particular professional occupation.
• The mandatory period of employment in Bulgaria for the person who received an “EU Blue Card” is being reduced from 24 to 12 months. The specified limitation does not apply to the cases of secondment of workers and employees, holders of the “EU Blue Card”.
• The validity of the “Blue Card” is extended from 4 to 5 years, and a minimum period of no less than 24 months is also being established.
• The minimum term of the employment contract is reduced from 12 to 6 months.
“Murgova and Partners” Attorneys at Law has extensive experience with proceedings regarding the issuance of the “EU Blue Card”, as well as any needed additional assistance to employers and third-countries nationals. The law firm also has experts in the field of labor and migration law with successful practice in the procedures for issuing a permit for access to the labor market for foreign nationals.
You can contact us at www.murgova.com. or on tel. 0894 300 484
Dear colleagues, partners and students,
We are glad to invite you to attend the first workshop organized by Murgova and Partners team in partnership with the Bulgarian Industrial Association (BIA), the Court of Arbitration at BIA, and The Center for American Studies in Poznan, Poland.
The event will cover rarely discussed subjects in our daily practice of law, namely, Legal Thinking and Litigation Strategies.
Why are legal thinking strategies so important?
Everything we do in the legal profession is with the perspective of resolving or otherwise dealing with conflicts. Having the correct legal thinking strategies in a conflict from the get-go is indispensable to understanding how to apportion our time and resources in a conflict, in order to address only what is pertinent to actually winning the “war” at the end.
The workshop will cover practical legal thinking short-cuts that will equip you with fresh and tested approaches to issues arising in legal disputes.
When: October 13th 2022, 14:00 EEST (UTC+3)
Where: Conference hall at BIA, located Sofia, 76 Chataldzha Str.
The workshop will be presented in English.
The Moderator of the event will be Mrs. Petya Murgova – managing partner and leading team member in Dispute resolution and Mediation at Murgova and partners.
We are glad to announce as well that our guest lecturer will be attorney Mr. Valery Loumber, Academic Director at the Center for American Studies (“CFAS”) in Poznan, Poland. Mr. Loumber has over 20 years of legal experience in the United States, including experience in private practice, as staff attorney for several federal judges, as a lecturer and professor of law, and also as a judge. Currently, he is a partner at the litigation law firm of Gavrilov & Brooks in Sacramento, California.
The workshop will be with duration of 3 hours and is free for students.
For other attendees the participation fee is in the amount of 36 EUR.
Should you wish to participate please contact us at firstname.lastname@example.org for more payment details.
We are looking forward to meeting you there!
and Murgova & Partners Team
In our practice in the field of intellectual property and protection of copyright and related rights, we more and more often encounter various cases in which photographic works are used on the Internet by third parties other than the authors or the copyright holders. We witness how some users perceive someone else’s works available in the virtual space which are a subject to free use, and in such cases the consideration of certain specific features is omitted, which in general leads to copyright infringement.
With the current article we present you the main guidelines that you should follow when using photographic works on the Internet, so as not to infringe copyright.
In English, the general term “copyright” has been adopted, which contains the rights of the authors of various works of intellectual property much more comprehensively. Bulgarian law considers either the general concept of “copyright and related rights” or the different types of such rights.
What do you need to know about intellectual property rights to photographic works in the light of their use on the Internet?
The Bulgarian Act on Copyright and Related Rights (ACRR) considers several hypotheses regarding the use of photographic works, without, however, considering the specific hypothesis of their use on the Internet, which should be equated to a public display within the meaning of our law. According to the Act on Copyright and Related Rights, the right to publicly display photographs belongs to the author or to a person to whom the author has transferred this right. Therefore, as a rule, the free use of photographs (including on the Internet) without the consent of the author is prohibited. This rule applies even to portrait photographs, as the law allows the author and the person photographed to agree on the terms of the use of the photograph. It is important in these hypotheses to note that the photographer should in the first place obtain the consent of the person being photographed to photograph him.
An exception to the rule above according to the Act on Copyright and Related Rights is allowed when using works (including photographic ones) that are constantly exhibited on streets, squares and other public places, if this is done for information or other non-commercial purposes. Such use does not require the consent of the copyright holder and no remuneration is due.
The following exception under our law for the use of a photographic work without the consent of the author is permissible in the reproduction of the work, regardless of the medium, by an individual for its personal use, provided that it is not made for commercial purposes. In this case, however, a payment of fair compensation to the author is due.
Regardless of which of the hypotheses of use it falls under, however, the fundamental right of every author, including photographers, should not be forgotten, namely that their authorship should be indicated or the so-called “photo credit” should be given. ”. Even the general terms and conditions of websites that offer access to and use of completely “free” photographs contain texts according to which the reference to the author and/or the source of the photograph is always good, and in our opinion the best practice.
This recommendation is based not only on our experience in solving many similar cases when using photographs on the Internet, but also on the basis of our work with highly developed ways to monitor the use of photographs on the Internet. Advances in technology have made it possible to create automatic platforms that detect the use of photos on the Internet and notify photographers of any such use. The assessment of whether the use is lawful or not is usually made by the author himself or by the attorney engaged by him.
In addition, it should be kept in mind that referring only to the source from which the photograph is used may also not be sufficient. According to the Act on Copyright and Related Rights, without the consent of the copyright holder and without payment of remuneration, it is admissible to reproduce works related to a current event, so that these works are used by the media to a limited extent, justified by the purposes of the information indicating the name of the author, unless this is not possible. Make sure that it is really impossible to find the name of the author of the photograph, as these would usually be rare hypotheses. It is a common practice, especially for young photographers, to publish their works on the Internet and to provide the opportunity to use them without remuneration, but with obligatory reference to the author himself. This guarantees copyright when using the “free” photo. Omission of the author’s reference in the use of such works equates to copyright infringement with all the consequences of the law.
For such violations ACRR provides a property sanction in the amount of BGN 2,000 to BGN 30,000, and the possibility remains open for the author to claim compensation for property and non-property damages in court. Here we should also take into account the hypothesis that, if you have used photography by foreign authors, the Bulgarian law will not be applicable and possibly the court case for establishing copyright infringement is very likely to be subject to a foreign court, thus the defence possibilities would be further complicated, and in addition you might be charged with high court costs and attorney’s fees. In such cases, we usually advise our clients to use out-of-court means to reach an agreement with the other party. Negotiation and mediation are extremely appropriate and successful solutions in such cases.
To avoid such consequences and risks when using third parties’ photographic works on the Internet, we advise you to follow the recommendations in this article, as well as to consult with attorneys-at-law with vast experience in the field of intellectual property, just like us in “Murgova and partners” Attorneys at Law. If you have any questions or need advice, we will be happy to help you. Contact us through www.murgova.com
*Image by mohamed Hassan from Pixabay
In our previous article on the subject, we have presented you some of the most important requirements that the legislation sets for online trading. In its continuation with the current article we would like to provide you with information considering several additional, but fundamental questions for every trader. Thereinafter we will focus on how product advertising should be organized so that, without violating statutory prohibitions, the trader can distinguish his own from those of his competitors and thus direct the consumer demand to them, as well as how should promotional/discount campaigns be organized.
Requirements for comparative advertising to be observed:
The legislation is based on the perception that the comparison between the qualities of different products is predominantly useful for the consumer and therefore comparative advertising is allowed in compliance with the requirements aimed at preventing malicious harm to the interests of competing companies. On the other hand, the comparison between the products of competitors always carries the risk of harming the interests of the competitor, since the purpose of advertising is precisely to highlight the advantages of the advertised product and thus direct consumer demand to it.
Therefore, and in order to avoid the restrictions of the prohibited comparative advertising, more often than not established methods are used in which the ads themselves set a basic appearance of similar products in order not to target those of a particular competitor, but despite that the effect of emphasizing the positive characteristics of the advertised product is achieved.
What should the advertising message of the trader who has decided to take advantage of the opportunities for comparative advertising look like?
- The comparison should be objective, between products and services that satisfy the same needs. Otherwise, there is no way to make a real and adequate comparison, and advertising will not be objective;
- Advertising messages that make false claims, use vague or misleading messages, withhold or exaggerate information, and that harm the competitors’ name or trademarks in bad faith should be avoided.
Requirements for organizing promotional/discount campaigns:
When organizing discounts, the trader should comply with the following requirements:
- It is recommended for larger campaigns to prepare clear rules for the discount, provided for customers;
- The discount announcement should contain information about the goods and services which are on a discount and the duration of the reduced price;
- The announcement should be made in one of the ways provided in the Consumer Protection Act, so that the comparison between old and new price is visible;
- The old price, which will be stated in the discount announcement, is considered to be the one applied by the trader at least one month before the discount (this condition was introduced to avoid price speculation and the so-called “fictitious reductions”). ;
- The reduction period should be between 1 working day and 1 month;
- The conduct of a discount campaign does not entitle the trader solely because of the proposed lower price to “take away” certain rights of consumers (eg the right of withdrawal, complaint, etc.).
It is important to keep in mind that non-compliance with the requirements for lawful conduct of discount campaigns could lead to the imposition of administrative sanctions on the trader, but more significant would be the “sanctions” imposed by consumers themselves, who as a result of established unfair practice, would redirect their demand to other similar products of competing companies.
On the other hand, it is important to keep in mind that a large part of the e-commerce legislation aims not only to protect the interests of consumers, but also to protect the competitive environment. Therefore, when taking a number of actions in an online environment, the trader should continue to comply with the rules of competition law, which he adheres to in his usual course of business.
This article has outlined some of the most important aspects that every trader should keep in mind when conducting online trading. The variety of factual relationships leads to the emergence of many other cases that require a complex and timely solution from the trader. Therefore, we at Murgova and Partners Attorneys at Law are next to our clients every day, providing them with constant assistance in finding the most appropriate solutions. If you need additional information and assistance, you can visit our website: https://murgova.com/
During the past period of social distancing and restrictions we have witnessed an unprecedented boost in the development of e-commerce. The inability of many retailers to continue direct sales of goods and services to their customers has led to the relocation of a number of businesses online. An interesting phenomenon is that in the online environment have moved even services, the added value of which is to provide an individual experience of the client (eg classes in creative activities, etc.).
In order to adequately organize its activities in a dynamic environment and to protect themselves from unwanted sanctions, every trader should ensure compliance with certain requirements set from a legal point of view. In this article we will summarize some of the most important of them, the observance of which we define as particularly important in order to legally exercise the commercial activity of companies in the online environment.
Obligation to provide information to customer-users
The relationship of the online trader with consumers (individuals who buy goods or services for their non-professional needs) has a significant and inevitably accompanying them in their entire development light motive. This is the requirement for the trader to provide the consumer with as much information as possible, which will enable him to make an adequate decision for product selection. In its turn, the latter is partly difficult due to the fact that in online trading consumers cannot see and directly compare several similar products (something they can do without a problem when physically buying goods). Therefore, the legislation introduces several additional requirements for the trader, the implementation of which aims to guarantee the consumer’s right to information in its various aspects and in its full scope.
These requirements are set out in several national and European regulations, given the qualities of the parties in the relationship in e-commerce leading among which is the Consumer Protection Act (“CPA”). According to the requirements of the latter, before the consumer is bound by a contract, the trader should have provided him with information on:
- your trade name, address of management, phone number, e-mail;
- the main characteristics of the goods or services (through a textual description of their main parameters such as size, material from which the goods are made, etc., as well as through a photo that objectively presents the product);
- the final price of the goods or services including all taxes and fees;
- payment terms, including accepted means of payment (information regarding the payment should be provided in a clear and obvious way close to the button through which the user places his order);
- terms of delivery (including whether there are any restrictions on the delivery itself, as well as the date of delivery);
- information on whether a right of withdrawal is provided and under what conditions it can be exercised;
- conditions of a legal guarantee for correspondence of the products, and if any-of an additional commercial guarantee, as well as additional information under what conditions, in what terms and where the granted rights are exercised.
In addition to the above, the Electronic Commerce Act (“ECA”) strengthens the requirements for providing unimpeded access to certain information, which further includes:
- designation of an authority which controls the activity of the trader;
- VAT registration information.
Last but not least, the legislation in the field of personal data protection requires the trader (who also has the capacity of Administrator within the meaning of the General Regulation on Data Protection) to provide certain information to users whose data are processed when accepting orders in online stores. Part of it overlaps with the one already described, and in addition the trader-administrator should inform the client – subject of personal data about:
- an appointed data protection officer (if any) and contact details;
- purposes of data processing and legal basis for processing operations (the most common case in online trading will be for the purposes of contract execution – the customer’s order);
- data recipients;
- data retention period;
- information about the rights of the clients in relation to the provided personal data;
- information on the right to appeal and to which authority the same can be exercised;
- information on whether the provision of data is mandatory or voluntary and what would be the consequences of not providing it.
It is important that the full required information is provided by the trader to the consumer and that this circumstance can be proven by the trader.
How to document the presentation of all the described information?
A very large part of the information described above is usually contained in several basic acts of the trader related to his commercial activity, including that carried out in an online environment. Here we will consider the most important of them, as well as some of their significant specifics:
- General terms and conditions: given the standardized form of the relations between the parties, it is an established practice for the contracts within the framework of online trade to be concluded under general conditions.
In addition to the information described above, the General Terms and Conditions most often contain information about the customer registration procedure (if required for placing an order), as well as the sequence of actions when placing an order. Something that is often missed is the inclusion of information and an active link to the Public Online Dispute Resolution Platform.
In case the trader wishes to collect additional declarations, consents, etc. from the clients, which are not among the obligatory requisites of the General Terms and Conditions, he should do so with a separate document. This is important because with the adoption of the General Data Protection Regulation, the previous practice of including in the General Terms and Conditions or in another general document a number of additional statements to be made by the user in a single action has been established as vicious (usually by pressing on the “I agree to the Terms and Conditions” button).
- Confidentiality rules: they perform the purpose of an act presenting preliminary information to data subjects within the meaning of the General Data Protection Regulation. Following the adoption of this Regulation, it has become established practice to place this document in a publicly accessible place (eg in the trader’s office, on his website, etc.).
This article outlined some of the most important aspects that every trader should keep in mind when starting an online business. In our next article we will provide you with additional information on how to organize the advertising of products so that without violating statutory prohibitions, the trader can distinguish his own products from those of his competitors and thus direct the consumer demand for them, as well as how discount campaigns should be organized.
Murgova and Partners Attorneys at Law has significant experience in advising online traders. If you need additional information and assistance, you can visit our website: https://murgova.com/
Summary on the important measures under the measures and actions during the state of emergency act, adopted under decision of the National assembly on March 13th 2020
With Decree No. 71 of 23.03.2020 the President of the Republic of Bulgaria promulgated The measures and actions during the state of emergency act, adopted under a Decision of the National Assembly on March 13, 2020.
The present document aims to give a brief overview of the adopted texts, and we would also like to note that the team of Murgova & Partners Attorneys at Law is currently working on subsequent memos, which will give more detailed information on the specific measures, broken down by areas. We expect these texts to be published in the upcoming hours and days.
The Act introduces specific measures for the period of the declared state of emergency in several directions: suspension and extension of a number of procedural terms (deadlines), termination of pending procedures, restriction of notarial proceedings, enabling employers to take measures for reorganization of the work process, empowering military forces to undertake certain actions. The Transitional and Final Provisions amend a number of provisions of the existing legislation connected to the accepted measures and it must be noted that the amendments are substantial and are subject to a separate independent analysis within the specific area.
1. Measures, concerning the employers
As we have already mentioned in our review of the Draft version of the of the Act, prior to its final adoption, the employer is given the opportunity, depending on the specific nature of the work and the possibility of securing it, at his own discretion to introduce working from home or working remotely. The employer is also entitled to provide an employee up to one-half of the paid annual leave which can be done regardless of the consent of the employee.
By virtue of explicit Order the Employer may suspend the working process of the company or part of it, of all of its employees or of part of them for the period of the state of emergency. The working process of the company may be also suspended by virtue of an explicit order issued by the competent state authority.
The Employer is entitled to implement part-time work for employees.
As a measure in support of the employers, the National Social Security Institute is envisaged, through the means of the Unemployment Fund, to cover 60% of the amount of the social security income for January 2020 for people, insured under art. 4, subart. 1, item 1 of the Social Security Code (employees regardless of the nature of work). Which employers will have the opportunity to benefit from the measure is yet to be determined, and the Act provides for the conditions for this to be determined by a following act of the Council of Ministers.
Special rules have been introduced for workers who provide or assist in the provision of medical care, respectively for civil servants who, by job description or by order of a manager, assist in the provision of medical care. They are not subject to the restrictions on overtime and its duration under the Labor Code and it is similar with the police and fire safety and public protection bodies that work overtime on regulatory restrictions.
Murgova & Partners Attorneys at Law is available for clarifications and drafting of respective documentation. We are currently working on a detailed article on all measures introduced by the Act concerning employers.
2. Restrictions related to procedural terms (deadlines), pending procedures and proceedings
As of 13.03.2020 and until the state of emergency is lifted all procedural terms (deadlines) related to all and any court, administrative, arbitration and executions procedures and cases are suspended. This restriction is not be applicable to the terms (deadlines) related to criminal procedures, extradition and coercive measures. Furthermore, prescription terms are ceased, as well as terms for the implementation of instructions given by an administrative authority.
Various procedural terms under the Social Security Code, The act on the foreigners on the territory of the Republic of Bulgaria, the Act on the national community centers, the Act on the Pre-school and School Education, the Act on Corporate Income Tax, the Act on Personal Income Tax , the Social Security Procedure Code, the Act on Independent Financial Audit, the Insurance Code, the Act on Public Offering of Securities, the Act on Financial Instruments Markets, the Act on the activities of collective investment schemes and other collective investment undertakings, have been extended or suspended.
The validity period of the documents for residence of foreigners, the validity period of ID cards and driving licenses have been extended.
The introduced changes are quite detailed, with exceptions in each case. This makes detailed analysis impossible in the context of this short document. Our team at Murgova & Partners Attorneys at Law is working on a detailed article focusing specifically on these measures. We recommend a mandatory consultation with a lawyer regarding the suspended deadlines, the effect of this measure and their resumption after the state of emergency has been lifted.
All procedures for public sale or entering into possession have been suspended.
The Act imposes a moratorium on the blocking of bank accounts owned individuals and medical establishments, the attachment of salaries and pensions, the inventory of movable property and real estate owned by individuals.
Notarial proceedings are restricted and only “urgent” notarial proceedings are permitted. The text is likely to raise questions because of the lack of a legal definition of “urgent”.
Until the state of emergency is lifted, the effects of late payment on the obligations of private entities, including interest and penalties for late payment, as well as non-monetary consequences such as early repayment, contract termination and seizure of property, shall not apply.
The deadlines for payment of amounts due in connection with the supply of electricity to household customers are extended from 10 to 20 days.
Murgova & Partners Attorneys at Law is working on a detailed article on all measures introduced by the Act and concerning changes within the statutory deadlines.
3. Restrictions on procurement procedures
The adopted measures provide that the Act on the public procurement is not applicable in respect to the purchase of medical devices and personal protective equipment necessary to provide anti-epidemic measures. PPA is not applicable in respect to the procurement of pesticide and hospital waste disposal activities.
The contractors are given the opportunity to renegotiate the deadline for implementation of the public procurement.
Murgova & Partners Attorneys at Law is working on a detailed article on all measures introduced by the Act in relation to public procurement.
4. Measures in educational establishments
For students in day, evening, part-time, individual and combined form of education, as well as in a dual system of education, distance learning must be introduced within an electronic environment using the means of information and communication technologies. Teachers and pedagogical specialists carry out the education by providing a workplace in their home or their chosen premises and by using the necessary technological equipment.
The Minister of Education and Science has been given the opportunity by virtue of an Order to introduce temporary rules regarding the education.
5. Restrictions and measures in the activities of pharmacies and the export of medical products
Pharmacies may dispense medical products only on the basis of a prescription book, without presenting a prescription according to the data on dispensed medical products recently entered in the prescription book, under the terms and procedures determined by the National Health Insurance Fund, until the state of emergency is lifted and two months after its abolition.
During the state of emergency, by virtue of an Order of the Minister of Health the export of certain medical products may be prohibited, with the prohibition being accompanied by an administrative sanction of up to BGN 50,000 depending on the offender.
6. Restrictions related to the EU structural and investment funds’ funds
The possibility of unilaterally modifying grant contracts by the managing authorities, granting grants under simplified rules, shortening the timeframes for direct grants, issuing non-present decisions on all matters of competence of the Program Monitoring Committee are envisaged. The application of some articles from the European Structural and Investment Funds Management Act is excluded.
The Murgova and Partners’ team is available for any additional consultations about the restrictions described herein above, and we are also working on a detailed article on all measures introduced by the Act.
7. Other measures
The Act also introduces a number of other measures, such as:
The possibility of the military forces to participate in the implementation of anti-epidemic measures, under the conditions and in the order determined by an act of the Council of Ministers, such as carrying out identity checks on people, under certain conditions to restrict the movement of people and vehicles until to arrival of the Ministry of Interior bodies and others.
Within 7 days of the promulgation of the Act, medical establishments, state institutions and telecommunications operators through certain officials should carry out an extraordinary check of the technical condition of their energy facilities intended for the supply of electricity.
Entry into force of the law
With the exception of some explicitly stated provisions (with an effect from the date of promulgation), the Act enters into force retroactively – 13.03.2020 and applies until the state of emergency is lifted.
The Murgova & Partners’ team is available for further clarification on the issues raised in this article, and we can assist with any specific legal issues raised by the Act.
Sofia, March 25th, 2020
The Team of Murgova & Partners Attorneys at law
Subject to implementation during the state of emergency, declared in the Republic of Bulgaria within the time period as of March 13th 2020 until April 13th 2020
(this Summary is up-to-date as of March 18th 2020)
By virtue of the project of the Act on the measures applicable during the state of emergency, hereinafter referred to as “the Act” and/or “the project of the Act”, (declared with Decision dated March 13th 2020), issued by the National Assembly, are provided numerous measures which shall be implemented on the territory of the Republic of Bulgaria within the time period of the declared state of emergency.
The present document aims to summarize the most important (from business perspective) emergency measures, provided by the project of the Act.
As of the date of preparation of the current document, the project of the Act has been adopted in general at its first reading conducted by the National Assembly. Considering that future amendments might be made within the final version of the Act, we reserve our right to amend the current document accordingly.
The Transitional and final provisions of the project of the Act provides amendments in a numerous legal acts for the purpose of the implementation of all emergency measures. Such legal acts are:
a. The Criminal Code;
b. The Labour Code;
c. The Social Security Code;
d. The act on the disabled individuals;
e. The act on the Bulgarian identification documents;
f. The act on the foreigners on the territory of the Republic of Bulgaria;
g. The act on the defence and the military forces of the Republic of Bulgaria;
h. The act on the civil servants;
i. The act on the national community centers;
j. The act for amendment of the Act on the administrative regulations of economic activities, related to oil and products of oil origin.
Within the discussions conducted in the National Assembly between first and second reading of the project of the Act, have been proposed additional amendments in other legal acts for consideration. The most important of them are the National health act, the Act on the medical establishments, the Act on the public procurement procedures, etc.
Murgova and Partners Attorneys at law is available to provide to its Clients the full set of legal services and consultations related to analyzing and implementing the emergency measures. Further to the above, our law firm might assist its Clients with preparation of all necessary internal company documents, including specific internal rules, policies, orders, decisions, etc.
The emergency measures included in the project of the Act aim to prevent, to restrict and to overcome the infection with COVID – 19 as well as the consequences of the spread of COVID – 19.
1. Restrictions on gathering of individuals and on their movement
1.1. All visits of entertainment and gaming rooms, discos, bars, restaurants, fast food restaurants, drinking establishments, cafes, pastry shops, trade centers (MALLS) – with the exception of banking and insurance offices, grocery stores and pharmacies placed therein, are forbidden.
The restaurants and fast food restaurants are entitled to organize food deliveries, following strict sanitary and hygiene requirements.
It should be outlined that the list of restricted business activities is exhaustive. Thus, all of the activities which are not mentioned above, might be further executed following the current requirements, as well as following strict sanitary and hygiene requirements.
1.2. All school sessions as well as the visits of kindergartens, schools, universities, etc, are forbidden. If possible, each school, kindergarten and university should organize distance training of its students.
1.3. All mass events, including sport events, cultural and scientific events are also forbidden. Falling within the present item are also cinemas, theaters, concerts, museums, fitness room visits, etc.
1.4. All planned medical consultations, medical examinations, immunizations, organ transplantations as well as visits in hospitals are forbidden.
1.5. All trainings and business trips (conducted on the territory on the Republic of Bulgaria as well as on the territory of any other foreign country) are forbidden.
1.6. All visits of correctional institutions (including prisons and other similar establishments) are forbidden.
1.7. Each individual travelling abroad is entitled to have medical insurance of an obligatory character.
The measures listed above might be expanded and amended with an Order issued by the Minister of Health after recommendation of the National Operational Headquarters.
2. Restrictions related to procedural terms (deadlines), notary and other procedures
During the state of emergency in the country all procedural terms (deadlines) related to all and any court, administrative, arbitration and executions procedures and cases are suspended. This restriction shall not be applicable to the terms (deadlines) related to criminal procedures.
The formulation of the initial text of the respective provision is rather vague as it is not clear which is the initial moment as of which these terms are considered suspended. Therefore, this ambiguity shall be clarified when the final version of the Act is being adopted by the National Assembly. Taking this into consideration, it is our opinion that until the finally adopted Act is being published and enforced (following the applicable legislative procedure) the procedural terms are not suspended and thus – they shall be met. Furthermore, it shall be additionally clarified if procedures related to imposition of administrative penalties fall within the scope of this restriction. Considering the formulation of the initial text of the provision, we believe that these procedures are also falling within the scope of this restriction, but this should be explicitly clarified by the National Assembly.
In addition, the provisions related to objection of administrative acts is rather unclear as well. If these terms are also considered suspended, this might prevent numerous administrative acts (such as Decisions issued by Assignors under the Act on public procurement procedures) from entering into force and execution.
Further to the above, all procedures for public sale or entering into possession initiated by private bailiffs, are considered terminated. It should be outlined that there is no differentiation provided between procedures for entering into possession against individuals or legal entities. The broader formulation of the text of the respective provision leads to the conclusion that the restriction is applicable to all procedures for entering into possession (irrespective of the capacity of the debtor).
Further to the above, all procedures initiated for preservation of funds stored on bank accounts, restraining of pensions or labour remunerations as well as for preparation of inventory list of movable and immovable property (within enforcement procedure) are also suspended. All of these restrictions are applicable only when the debtor is individual, which means that all similar procedures conducted against companies, non-profit organizations, etc. might be proceeded.
The project of the Act also provides that all notary procedures, with the exception of those of an emergency or urgent character, shall not be conducted. The Notary Chamber is obliged to secure at least one notary public (with territorial competence) on duty, following strict sanitary and hygiene requirements. These new provisions are followed with additional ambiguities. First of all, there is no definition or at least indicative list which notary procedures shall be considered with such of an emergency or urgent character. Therefore, this circumstance shall be considered case-by-case which might lead to misuse of the specific notary procedure, delay with filing of Notary deeds before the Registry Agency, conduction of numerous deals with identical real estate and many other risks for the business. Thus, it is our professional opinion that the new provisions related to notary procedures shall be additionally clarified in order to avoid the mentioned negative outcomes.
3. Restrictions of the working process
All employers are obliged to implement procedures for distance fulfillment of employees’ obligations. In the event that this is not possible, strict safety and anti-epidemic measures shall be implemented within the working premises. Such measures might include filtering procedure on arriving employees, disinfection, ventilation of premises, trainings on personal hygiene, etc. Employers are also obliged not to allow to work employees or third parties (external to the employer’s organization) with symptoms of severe diseases.
Under the general state inspector’s recommendation the employer shall also organize the working process by securing at least 1 meter distance between all employees.
In relation to the above, the administrative directors within the employer’s organization shall report the implemented measures as well as they shall certify the smooth conduction of the working process.
Our law team is readily available for discussion of the most appropriate form of reorganization of the working process within your company, considering the specifics of your business activity.
Further to the above and as already stated, additional amendments shall be made in the Labour code for the state of emergency, such as:
a. The Employer will be entitled to assign to the employees distance fulfillment of their obligations, irrespective of their consent to this decision.
b. By virtue of explicit Order the Employer might suspend the working process of the company or of its part, of all of its employees or of part of its employees for the period of the state of emergency. In this case, the Employer is obliged the pay the full amount of the gross remuneration of the employees.
c. The working process of the company might be also suspended by virtue of an explicit order issued by competent state authority. In this case, the Employer is obliged to pay 50 % of the gross remuneration of the employees, but not lesser than 75 % of the minimum state wage.
d. The Employer is entitled to implement part-time work for employees initially engaged on full-time – for the period of the state of emergency.
All of the mentioned changes in working conditions (including the remunerations of the employees, holidays and leaves) shall be subject to explicit order issued by the Employer and provided to the attention of all employees which should also sign specific declarations that they are acquainted with these changes. Further, it is our understanding that for the purposes of clarity, these changes shall also be subject to supplementary agreements signed by the Employer and each employee (under the requirements of art. 119 of the Labour code).
e. When the working process of the company is suspended, the Employer is entitled to provide paid leave to the employee (irrespective of latter’s consent on this decision). This right might be exercised also over individuals which do not have 8 months working experience. In the event that some employees do not have any paid leave left, they might be provided with unpaid leave for the period of the state of emergency.
f. The Employer is obliged to provide leave under the request of the following employees:
Pregnant employees or such in advanced stage of in vitro treatment;
Mothers or single fathers of children up to 12 years old or of disabled children – without limitations in their age;
Employees under 18 years old as well as employees with decrease of performance of 50 or more %;
Employees subject to the protection provided by art. 333, subart. 1, item 2 of the Labour code.
4. Restrictions related to the EU structural and investment funds’ funds
The possibility of unilaterally modifying grant contracts by the managing authorities, granting grants under simplified rules, shortening the timeframes for direct grants, issuing non-present decisions on all matters of competence of the Program Monitoring Committee are envisaged. The application of some articles from the European Structural and Investment Funds Management Act is excluded.
The Murgova and Partners’ team is available for any additional consultations about the restrictions described herein above.
5. Assigning of tender procedures and procedures under the Act on the public procurement procedures
After decalaring the state of emergency in the country an amendment to the Act on the public procurement procedures was announced in State Gazette, No 23/14.03.2020. The amendment provides that the Act on the public procurement procedures will not be applicable about buying of medical devices and personal protective equipment necessary to provide anti-epidemic measures introduced by an act of the Minister of Health or a director of a regional health inspection in cases of declared emergency situation under art. 84, p. 12 from the Constitution of Republic of Bulgaria.
However, the initial draft of the Act does not provide any additional measures considering assignment and organization of tender procedures and public procurement procedures under the Act on the public procurement procedures. Our opinion is that this omission would rise lots of questions and hinders for the assignors about all started and new procedures under PPA and the tender ones as well. Part of these matters are included during the discussions before first and second reading of the Act.
There are expert discussions and proposals in the media but so far, no official opinion by any competent state organ has been announced. We will keep you informed about any further and detailed information considering these measures.
6. Other important matters
Up to date there are discussions about introduction of emergency economic measures supporting the business in several areas. The discussed measures are not final and they will be further clarified and completed. Considering their specifics we are expecting further amendments to be made in the draft of the Act before its finalization and that may affect some of the commented measures herein above as well.
Herein below, we will present the discussed measures in brief and we will inform you further when they are finalized.
The discussed economic measures are anticipated as follows:
6.1. The Employment Agency will pay off 60 % from the employees’ remunerations for a 3-month period for certain employers categories after a special application procedure is initiated by the employers;
6.2. Assistance or provision of reliefs for payments under commercial credits;
6.3. Extension of deadlines for tax and accounting closures as well as for declaring and payment of taxes.
The team of Murgova and Partners Attorneys at law is by your side during this challenging period as will assist and consult you about all specific legal matters raised by the emergency situation. We will keep you informed about the final draft of the Act once it is adopted by the National Assembly.
The Team of Murgova & Partners Attorneys at law
European order for payment
The European Union aims to create, maintain and develop an area of freedom, security and justice in which the free movement of persons is guaranteed. In order to achieve this objective and in order to ensure the proper functioning of the internal market, the Union provides the adoption of measures in various fields, one of which is the field of judicial cooperation and civil matters having cross-border implications.
The EU also aims to guarantee stability of the economic operators by limiting the causes that lead to insolvency, notably by ensuring the prompt and effective recovery of outstanding debts, over which no legal controversy exists.
The adoption of Regulation (EC) № 1896/2006 of the European Parliament and of the Council of 12 December 2006 Creating a European Order for Payment Procedure is the result of the simultaneous efforts of the EU in these two fields.
The European Order for Payment (EOP) is intended and developed to be a quick and at the same time effective mechanism for recovery of uncontested pecuniary debts within the European Union.
The procedure is applicable in all Member States except for Denmark. In other words, this means that such an order could be issued or enforced by the respective competent court in each Member State except for Denmark. The regulation applies only to claims arising from civil or commercial matters – for example commercial transaction receivables (forwarding agreements, lease agreements, etc.) or claims arising from civil contracts (leasehold agreements, loan agreements, etc.), which have cross-border implications.
A specific case could be defined as a cross-border case if one of the parties is domiciled or habitually resident in a Member State other than the Member State of the court that has been seised. The two terms shall be interpreted with regard to their meaning expressed in Regulation (EC) 44/2001.
The procedure provides an additional and thus optional remedy for the claimant that does not prevent him from undertaking procedures under the respective national legislation. The regulation develops a simplified and speeded-up procedure that reduces the litigation costs and ensures the free circulation of European Payment Orders within the Union.
The procedure commences once a claim is submitted before the respective competent court. In order for the claim to be valid, it shall be drafted in accordance with an established form. The claimant shall identify the parties and the amount of the claim (the principle, and where applicable the interest demanded on the claim, the contractual penalties and other costs related). The claimant shall also state the cause of his action and the circumstance in connection with his claim, as well as a description of the evidence supporting the claim. Along with this, the grounds of the jurisdiction and the cross-border nature of the case shall be defined. The claimant is not required to provide the court with any other additional documents, though he may do that at his discretion.
In fact, if the requirements of the Regulation that concern the application form are met and if the court adjudges that the claim appears to be founded, the latter shall issue, as soon as possible and usually within 30 days, a European Order for Payment. When issuing such an order, the court also uses a unified form.
In order to provide the defendant with information that would help him arrive at an informed decision about his possible actions, the application form requires thorough description of the circumstances related to the claim. Either the defendant could pay the amount stated in the order, or he could lodge a statement of opposition with the court within 30 days of service of the order on him. Where a statement of opposition is lodged, the EOP could not be enforced by the court. In that case, the proceedings shall continue in accordance with the rules of the ordinary civil procedure unless the claimant explicitly requests the termination of the procedure.
The claimant, who succeeds in proving the merits of his claim before the court, receives an enforceable titulus in a relatively short time. On the other hand, the defendant is protected – if the claimant does not manage to provide a detailed description of the circumstances related to his claim, the court will not issue an order. Even if the court issues such an order, the defendant may lodge a statement of opposition that will lead to transformation of the procedure to the ordinary civil once. The latter would prevent the quick effect of the EOP.
75 % of the small to mid-size companies in Bulgaria are owned by families and their development has a significant role in defining the economy of the country. In the EU, family owned businesses represent more than 60% of all registered companies and ensure over 40% of the overall employment.
Despite all this and although a key issue in this type of business structure, the process behind transfer of ownership and inheritance of a family business is frequently overlooked and underestimated. Taking into account that the limited liability company is in effect the most common business structure, the present article aims to discuss some of the more important practical issues related to the inheritance of shares in a limited liability company (Ltd), which should be considered as early as possible when planning to organize a business in this manner.
Although, that strictly speaking the limited liability company belongs to the so called “capital” business structures, it has many of the characteristics of a “personal” business or partnership due to the personal involvement and contribution of each of the shareholders.
According to the Bulgarian Commerce Act, the shares in a Ltd company can be inherited. However, this poses the question: Do the heirs actually become full right shareholders in the business and what are the main challenges when inheriting company shares?
This article will focus on and discuss the following issues:
When does the “membership relation” of the heirs arise and do they directly become shareholders in the company;
What counter measures may be expected from the other shareholders;
What are the challenges which should be considered when inheriting company shares, and
How to ensure maximum protection of your interests in case of the demise of a shareholder
The company share represents part of the assets of the limited liability company (art. 127 of the BCA) and the “membership rights” are defined as the right to participate in the management of the company and the profit distribution, the right to be informed about the company’s activities, the right to review company documentation and the right to a liquidation quota. Basically, this means that the law establishes a distinction between ownership of a company share and the rights of the shareholder in a Ltd. – his membership relation.
The right of inheritance arises upon the occurrence of an actual fact – the demise of a shareholder. The right of inheritance is a right which always carries pecuniary characteristics, since the personal and non-pecuniary rights оf the deceased do not pass to his heirs.
In case of the demise of a shareholder in a Ltd. company, his pecuniary rights – ownership over the company shares are inherited, but his membership relation is not. The heir has in effect acquired the shares but has the position of a third party vis-à-vis the company itself and therefore has to be accepted in the company in order to acquire membership rights. In this case the heir does not substitute the deceased shareholder and does not step into his membership relation but can only acquire membership rights on his own account and subject to approval by the General Assembly (GA).
The acceptance of a new shareholder is within the competence of the General Assembly and therefore if such approval is not granted, the heir does not acquire the non-pecuniary rights under art. 123 of the Bulgarian Commerce Act. The inherited shares determine the heir’s right to receive the equivalent of the shares’ value in accordance with art. 125 (3) of the Commerce Act if he does not wish be accepted as a shareholder in the company or if such acceptance is refused by the GA.
Therefore, as a general position under Bulgarian law, the inheritance of shares in a Ltd. company is not equivalent with becoming a full right shareholder in the company.
According to the purely doctrinal legal view which is shared by most legal experts in Bulgaria, in case the company’s Articles of Association expressly provide that the heirs of a deceased shareholder automatically become full right shareholders in the company, further approval by the GA is unnecessary. In this case it is presumed that the approval of the GA has been granted on the grounds of the Articles of Association. However, the court practice does not share this view.
In the past years Bulgarian courts, including the Supreme court of cassation have been consistent in their now unified position that in order to accept heirs as full right shareholders in the company, a GA needs to be convened and carried out under the rules of the Commercial Act.
In the sake of completeness, it should be noted that in order to be accepted as a shareholder in the company, the heir needs to meet the general requirements for a shareholder under law, namely to be sui juris local or foreign individual or legal entity.
If all above conditions are met, in order for the heir to become a full-right shareholder in the company, the following steps need to unfold:
The heir must have accepted the inheritance and must have filed an explicit request with the company which expresses his desire to become a full right shareholder and accept the Articles of Association;
The GA needs to be convened and must approve the heir’s acceptance as a full right shareholder in the company;
The Articles of Association must be amended accordingly to reflect the changes in the shareholding structure and must be published in the company’s file with the Commercial register.
It should be noted that the heirs cannot dispose of (i.e. sell) the inherited shares since they do not have the capacity of shareholders in the company before they have been accepted by the GA. However, in this case the existing shareholder(s) can acquire the shares from the heirs against payment of their equivalent.
Unfortunately, there is no unified court practice on the issue of calculation of the equivalent of the inherited company shares. Therefore, it is important tо have the rules for evaluation set out in the Articles of Association in order to avoid complications.
A number of district courts in Bulgaria have adopted the position that the evaluation of the inherited company share should be based on the fair market value of the assets of the company and not on their balance value. To support this position the courts have run a parallel with the scenario of liquidation of the company where the assets are disposed of at their market value based on which the shareholders receive their liquidation quotas.
This court practice accepts that the logical interpretation of the law leads to the conclusion that the market value of the company’s assets should be the basis for evaluation of the shares. According to art. 127 of the Commerce Act each shareholder owns a share of the company’s assets, which is defined on the basis of his participation in the company capital, if not agreed otherwise. Art. 125 (3) regulates the right of the leaving shareholder to receive the monetary equivalent of his company share. The interconnective interpretation of the above provisions leads to the conclusion that the value of the company shares which the leaving shareholder is entitled to under art. 125 (3) of the Commercial Act can not be different than the value of the share he owns in the company’s assets. To accept the contrary, namely to base the evaluation of the shares on the value of acquisition, would mean that the leaving shareholder would receive an amount which is different than the actual value of the share, be it higher or lower. In order to guarantee the right of the leaving shareholder to receive the market value of his share in the company, the law provides for the preparation of an explicit accounting balance which evaluates the assets of the company based on their current market value.
Other courts, including the Supreme court, adopt the position that the property of a functioning company is an aggregation of right obligations and factual relations and not purely ownership rights. This is why these courts support the view that the evaluation which should serve as the basis for calculation of the share of the deceased shareholder should be the balance value of the company’s assets and liabilities and not the market value.
In order to avoid long court disputes and in order to minimize the risk of embezzlement of the shares of the deceased shareholder by the remaining shareholder(s) and in order to clearly define the rights and obligations in the case of inheritance of shares, we suggest that before starting a business or accepting new shareholders in an existing business, expert legal advice should be sought. Our legal team has strong experience on the issues related to the inheritance of shares and have always aimed to provide a preliminary in-depth analysis of the connected potential risks. As a leading corporate law firm we are in the position to provide a professional legal opinion on the specific scenario and will be able to identify and minimize the risks by tailoring the company’s Articles of Association to meet the client’s needs.
Taking into account the existing gap in the regulations and the issues raised above, we advise the client to adopt Articles of Association which put forward clear and comprehensive procedures to be followed in the case of a deceased shareholder, convening of a GA in such circumstances and evaluation of the inherited share in the company.
Many of our clients chose to organize their businesses under the form of a joint stock company (JSC) as an alternative to the Ltd. since this legal form provides for a more secure protection of inheritance rights. Nevertheless, the small to mid-sized business is predominantly organized under the legal form of a limited liability company and shareholders should take due care when dealing with the issues raised above.
Due to historical, social, political and other reasons a significant part of the family business in Bulgarian is at the stage of being transferred from first to second generation, which makes the topic of inheritance of company shares extremely important and the issues it raises – more and more interesting.
How we help our clients to deal with GDPR
rom the beginning of 2018 Murgova and Partners Attorneys-at-law has been working on lots of projects in the field of GDPR and its requirements – a very popular and widely discussed matter for all EU countries especially for the last four or five months. As most of you are already familiar the GDPR or the General Data Protection Regulation was proposed by the EU Commission in 2012 and adopted by the European Parliament and the Council of the European Union in 2016. The GDPR became enforceable beginning 25 May 2018. The Regulation itself does not require national governments to pass any enabling legislation and is directly binding and applicable.
Nevertheless, the national governments were expected to assist the smoother appliance of GDPR’s requirements locally by adopting national legislation acts and/ or amending such affected by the Regulation. Before 25 May 2018 only couple of EU countries have finalized these processes locally and currently the progress by the rest EU members is not notable. In Bulgaria for instance the project of the new national act regulating processing and protection of personal data was published on-line for public discussions in the middle of May and up-to-date is still not adopted by the national Parliament.
All the above circumstances shall have been considered during our work under the GDPR projects which were assigned to us by our clients. Nevertheless, these so-called obstacles, we were challenged by the EU requirements to help to our clients to be prepared and complaint with GDPR before the national acts were adopted. Actually, we find that rather challenging than as an actual obstacle as our previous experience on similar projects has enable us to provide full scope of legal services to our clients in compliance with EU regulations and not in contradiction with the applicable national legislation.
The scope of our services under the GDPR projects includes a detailed legal compliance analysis of the client’s personal data processing mechanisms, full review of client’s corporate documentation, labour agreements and job descriptions as well legal compliance evaluation of client’s internal procedures. Our team conducts interviews and GDPR training sessions for the client’s employees in order to ensure the swift and smooth implementation of the data protection rules. Also, we provide full set of internal policies and documents ensuring legal and secure personal data processing by our clients. As we evaluate these services not as one-track projects but as full scope of ongoing engagements, we provide our clients with retainer services ensuring certainty that they can rely on Murgova and Partners Attorneys-at-law expertise for all GDPR current and future issues.