According to the Bulgarian Competition Law there is a prohibition on abuse of monopoly status of a company involved in commercial activities in the country. The monopole status of a company or enterprise is described as the exclusive right of that company or enterprise to deal in a definite industrial and/or commercial activity in the country. The Bulgarian Competition Law introduces one more term – dominate position on the market, which means that the company or enterprise holds more 35 % of the market.
In case of violation of the regulations concerning the monopoly status and dominating status, The Competition Law provides for penalty.
In case you establish a holding company, this holding company would be treated as monopoly or a dominating enterprise in the area of their operations, because there are just four competitors on that market in Bulgaria and if the holding company is to be established, it will own there of them and will be able to control the prices and be totally independent from its competitors.
Your options are as follows:
- a holding company is established including, but you acquire only one of the enterprises so you avoid being the monopoly.
- you establish a separate enterprise (a company registered under the law as an independent legal entity) which is not owned by the so as there is not link to it.
The term “linked persons” means:
1. Spouses; the relatives in a direct line without limitations (e.g. father, mother, children, grand parents, grand children, etc.); the relatives in a collateral line up to 4th degree (e.g. uncle, aunt, cousins, etc.); the relatives by marriage up to 3rd degree (e.g. mother-in-law, father-in-law, etc.).
2. An employer and employee.
3. The persons one of them participating in the management of the company of the other.
4. The partners in the company.
5. A company and a person being in possession of more than 5% of the lots and shares issued with the right to vote in the company.
6. The persons whose activity is being controlled either directly or indirectly by a third persons.
7. The persons who jointly control a third person, directly or indirectly.
8. The persons one of them being a commercial agent of the other.
9. The persons one of them having granted a donation in favour of the other.
Linked persons are also those participating directly or indirectly in the managing the control or the capital of the other person/s, due to which they could agree on terms different from the usual ones.
Should you consider that none of that is option for you and you decide to proceed with the establishment of the holding then according to Commpetion Law there would be an obligation for you to inform The State Commission for control over the competition for the agreement between company ”x” and company “Y” and the Commission will estimate the possible market share of the holding and will pass a decision according to the result of conducted research. And if the market share is above 35% , the agreement will be considered invalid
In case of violation of the regulations concerning the monopoly status and dominating status, The Competition Law provides for penalty.
In case you establish a holding company, this holding company would be treated as monopoly or a dominating enterprise in the area of their operations, because there are just four competitors on that market in Bulgaria and if the holding company is to be established, it will own there of them and will be able to control the prices and be totally independent from its competitors.
Your options are as follows:
- a holding company is established including, but you acquire only one of the enterprises so you avoid being the monopoly.
- you establish a separate enterprise (a company registered under the law as an independent legal entity) which is not owned by the so as there is not link to it.
The term “linked persons” means:
1. Spouses; the relatives in a direct line without limitations (e.g. father, mother, children, grand parents, grand children, etc.); the relatives in a collateral line up to 4th degree (e.g. uncle, aunt, cousins, etc.); the relatives by marriage up to 3rd degree (e.g. mother-in-law, father-in-law, etc.).
2. An employer and employee.
3. The persons one of them participating in the management of the company of the other.
4. The partners in the company.
5. A company and a person being in possession of more than 5% of the lots and shares issued with the right to vote in the company.
6. The persons whose activity is being controlled either directly or indirectly by a third persons.
7. The persons who jointly control a third person, directly or indirectly.
8. The persons one of them being a commercial agent of the other.
9. The persons one of them having granted a donation in favour of the other.
Linked persons are also those participating directly or indirectly in the managing the control or the capital of the other person/s, due to which they could agree on terms different from the usual ones.
Should you consider that none of that is option for you and you decide to proceed with the establishment of the holding then according to Commpetion Law there would be an obligation for you to inform The State Commission for control over the competition for the agreement between company ”x” and company “Y” and the Commission will estimate the possible market share of the holding and will pass a decision according to the result of conducted research. And if the market share is above 35% , the agreement will be considered invalid
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