Your team has agreed the commercial terms. The document is ready, and someone needs to sign it.
Before sending it for signature, check two things: which company is entering into the agreement, and whether the proposed signatory can represent that company for this transaction.
For international businesses operating in Bulgaria, these checks are particularly useful where local employees, overseas owners and group management share responsibility for commercial decisions.
This guide focuses on Bulgarian limited liability companies—OOD and single-member EOOD companies. Other company forms and particular transactions may require a different analysis.
Start with the contracting company
A group name or trading brand may be familiar to everyone involved, but the contract should identify the actual legal entity.
Check its registered name and unique identification code, commonly referred to as its EIK or UIC. Make sure those details are consistent throughout the agreement, including its schedules and signature section.
Where a foreign parent and a Bulgarian subsidiary are both involved, clarify which entity is taking on the obligations. A person authorised to represent one group company should not automatically be treated as authorised to represent another.
Check the registered representative and signing arrangement
For an OOD, the manager represents the company. Where there are several managers, the statutory starting point is that each may act independently unless the company’s articles provide otherwise.
Use the Bulgarian Commercial Register to check the current representatives and the recorded method of representation. If joint representation applies, arrange the signatures accordingly.
The title “manager” in an email signature is not enough on its own. A commercial role such as country manager, sales director or project manager should prompt a check of the person’s actual authority.
For an EOOD, confirm whether the sole owner represents the company personally or through an appointed manager. Ownership, management and the capacity in which someone signs should be clearly distinguished.
If someone signs under a power of attorney, read it
An employee or another person may be authorised to sign on the company’s behalf. Ask to see the relevant power of attorney rather than relying on a statement that approval has been given.
Review:
- Which company granted the authority and who acted for it.
- Who is authorised to sign.
- Whether the authority covers the particular agreement.
- Any limits on value, subject matter or duration.
- Whether the authority remains effective.
- Whether the required form has been observed.
The scope of a representative’s authority depends on what the principal has authorised. A document issued for one purpose should not be assumed to cover every subsequent transaction.
Where the law requires a special form for the transaction, the authorisation may also need to meet special formal requirements. Have this checked before arranging signatures, particularly for property or other transactions requiring notarisation.
Keep internal approval separate from signing authority
A business may require approval from its finance team, shareholders or overseas headquarters before entering into a contract. Record those approvals, but also establish who will legally represent the company when signing.
Internal restrictions and their effect on third parties are separate questions. For an OOD manager, Article 141(2) of the Bulgarian Commerce Act limits the external effect of restrictions on representative authority.
Do not assume that a breach of an internal approval limit necessarily makes a signed contract ineffective. Equally, do not use that rule as a reason to disregard the company’s governance procedures.
Prepare a short signing checklist
Before circulating the final version, confirm:
- The correct legal entity and identification details.
- The signatory’s name and capacity.
- Whether individual or joint representation applies.
- Any power of attorney and its relevant limits.
- Required corporate approvals and transaction formalities.
- That everyone is signing the same final version, with the necessary schedules.
Keep the supporting documents with the executed agreement. Repeat the authority check when representatives change or a new transaction is proposed; an old signing arrangement may no longer be appropriate.
If a contract has already been signed and authority is uncertain, preserve the documents and seek advice before treating it as either binding or ineffective.
Make signing checks part of everyday legal support
A clear signing process can be included within an agreed ongoing legal support engagement. The scope can cover authority checks, powers of attorney and coordination of the documents needed for particular transactions.
To discuss support for your business in Bulgaria, email office@petrov-bg.com with a brief outline of the proposed agreement and any relevant deadline. Please wait to send confidential documents until arrangements have been discussed.
General information only. The appropriate signing arrangements depend on the company, the transaction, the applicable law and the circumstances.