Adoption of the Euro and Company Capital: Mandatory Changes to Corporate Documents in 2026 (LLC vs JSC)
The euro is now the official currency in Bulgaria, but the work related to its introduction does not end there. Amid the commotion surrounding the dual circulation period, calculating change in euro or leva, and the correct currency conversion on product labels, traders should not forget that they also have obligations to update their internal corporate documents. One such obligation concerns the company documents themselves—founding acts, articles of association, and statutes.
As of 1 January 2026, the capital of all commercial companies has been or will be automatically converted into euro in the Commercial Register. Some companies can already see this change reflected in their company records. However, this automatic change does not complete the process. All companies are required to update their corporate documents by stating their capital in the new currency by 31 December 2026.
Although this may sound simple, there is an important peculiarity. Of key importance is the fact that the Law on the Introduction of the Euro provides for different rules for converting capital in limited liability companies (LLC) and joint-stock companies (JSC). One of the most significant differences is the following:
- only in JSCs is it permissible for conversion differences to be reflected as retained earnings or accumulated losses;
- in LLCs no such mechanism is provided, which creates real practical difficulties.
With this article, we systematize both the rules and the differences in the legal regime that may require companies to adopt different approaches:
1. Rules for LLCs
1.1. Sequence: First the Capital, Then the Shares
The Euro Adoption Act introduces a mandatory sequence for converting the capital of LLCs:
- First, the entire registered capital is converted from leva into euro at the fixed exchange rate.
- The value of the capital is rounded to the second decimal place.
- The shares are calculated on the basis of the converted capital.
- It is verified whether the converted shares equal the converted capital.
1.2. Legal Consequence for LLCs
Due to this sequence, a difference often arises between the converted capital and the sum of the converted shares. This difference prevents the mechanical transcription of the capital and shares in euro into the articles of association, because:
- In LLCs, this difference cannot be recorded as retained earnings or accumulated losses.
- The law requires the capital to be increased or decreased so that it corresponds exactly to the sum of the shares.
Therefore, for many LLCs it will be necessary to adopt a resolution to change the capital and amend the articles of association.
1.3. Example: LLC
Capital: 5,000 BGN, two shareholders – 70% and 30%.
1) Step 1: Conversion of Capital and Shares According to the Law
Capital:
5,000 ÷ 1.95583 = 2,556.46 EUR
Shares:
- Shareholder A (70%) → 2,556.46 EUR × 70% = 1,789.52 EUR
- Shareholder B (30%) → 2,556.46 EUR × 30% = 94 EUR
2) Step 2: Direct Conversion of the Shares
- Shareholder A (70%) → 3,500 BGN = 1,790.78 EUR
- Shareholder B (30%) → 1,500 BGN = 39 EUR
Sum of shares:
1,790.78 + 767.39 = 2,558.17 EUR
3) Step 3: Calculation of the Difference
2,558.17 EUR (shares) – 2,556.46 EUR (capital) = 1.71 EUR
4) Legal Result
Since in LLCs it is not permissible for this difference of 1.71 EUR to be distributed, the company must:
- increase the capital to 2,558.17 EUR, or
- adjust the value of the shares so that their total equals 2,556.46 EUR.
2. Rules for Joint-Stock Companies (JSC)
2.1. Sequence: First the Nominal Value of the Shares, Then the Capital
For joint-stock companies, the law provides a different mechanism:
- The nominal value of each share is converted from leva into euro.
- The nominal value of the share is rounded to the second decimal place.
- The new capital is obtained as the product of the nominal value and the number of shares.
- The resulting capital is compared with the automatically converted capital.
2.2. Key Difference for JSCs
If there is a difference between the two capital amounts, it is recorded as:
- retained earnings, or
- accumulated losses from previous years.
This mechanism applies only to JSCs and allows the avoidance of a formal capital change.
2.3. Example: JSC
Capital: 300,000 BGN, 3,000 shares with a nominal value of 100 BGN.
1) Step 1: Conversion of the Nominal Value
100 ÷ 1.95583 = 51.129 EUR → 51.13 EUR
2) Step 2: New Capital
51.13 × 3,000 = 153,390 EUR
3) Step 3: Comparison with the Automatically Converted Capital
300,000 ÷ 1.95583 = 153,387.37 EUR
4) Step 4: Calculation of the Difference
153,390 – 153,387.37 = 2.63 EUR
5) Legal Result for JSCs
The capital is not formally changed. The difference of 2.63 EUR is recorded as retained earnings / accumulated losses in accordance with the law.
2.4. Problem with JSCs
!!! Although the capital in the company’s record is calculated automatically in the above manner and this can easily be reflected in the statute, the field “Paid-in Capital” is not converted in this way. The amount of the paid-in capital is converted directly from leva into euro, without first passing through the per-share conversion rule described above. This results in a significant discrepancy.
Using the above example, in the Commercial Register the capital will be recorded as 153,390 EUR, while the paid-in capital will be recorded as 153,387.37 EUR. This creates the impression that the difference of 2.63 EUR has not been paid in at all.
For many joint-stock companies, this discrepancy is already visible in their registry records. This will again require not merely the announcement of an updated statute, but an actual amendment of the company’s register entry so that the capital is reflected as fully paid in.
3. Conclusion
Although the conversion of capital is carried out automatically as of 1 January 2026, the real legal work lies ahead during 2026:
- LLCs are required to adjust their capital when the sum of the shares does not correspond to the capital.
- JSCs may reflect differences as retained earnings or accumulated losses without changing the capital, but must ensure that the capital is reflected as fully paid in.
“Dr. Miroslava Hristova” Law Firm can provide you with full assistance on all matters related to updating your corporate documents in accordance with the euro legislation. For more information, you may contact us at office@recht.bg.
The information presented in this article is based on the legislation in force as of the date of publication and does not constitute legal advice or guidance for action by persons interested in the topic. All liability is excluded.