A Bulgarian variable-capital company (DPK, or EDPK with one owner) is more than a low-capital way to launch a startup. Its real value is an adaptable ownership and governance system: different classes of interests, employee participation, convertible finance and transfer controls can be built into one Bulgarian legal entity.

That flexibility carries a cost. The company agreement, members' book and approval process must work together throughout the company's life. This guide therefore focuses on operating and financing a DPK after formation. For filing steps, documents and form A19, use our separate guide to registering a variable-capital company in Bulgaria.

Bulgarian corporate, tax and accounting rules can change, and the company agreement can alter many default rules. This article is general information as at 1 August 2026, not legal, tax, accounting or investment advice.

The DPK at a Glance

Eligibility Is an Ongoing Operating Test

The current Bulgarian Commerce Act limits the DPK to enterprises with an average staff headcount below 50 and annual turnover not exceeding BGN 4 million and/or assets not exceeding BGN 4 million. Following Bulgaria's euro adoption, the legacy financial ceiling converts under the Euro Introduction Act to EUR 2,045,167.52. It should not be rounded to EUR 2 million.

In practical terms, the company must remain below 50 staff and must not exceed both financial measures. A high-growth business should monitor average staffing, turnover and assets quarterly rather than discovering the problem when its annual accounts are already complete. The DPK is not reserved to technology startups, but a regulated activity, lender or investor may require another legal form.

For a business still choosing its structure, see our EOOD, OOD and DPK comparison. Incorporation convenience should not decide the form if the forecast points to an early forced conversion.

Variable Capital Needs a Reliable Capital Record

A DPK's capital is not entered as a fixed figure in the Commercial Register. The regular annual general meeting establishes the amount at financial year-end and its movement from the preceding year. Interests within one class have the same nominal value, different classes may use different nominal values, and each interest must have a nominal value of at least one euro cent.

"Variable" does not mean informal. Rights under an interest arise only when the corresponding contribution is paid. Contribution deadlines must come from the company agreement or a general-meeting resolution, and an in-kind contribution requires valuation by three experts appointed by the manager or management board. The legal capital ledger, members' book, bank trail and accounting records should reconcile after every issue, transfer, repurchase or cancellation.

Model each financing before approval. A new issue may change voting control, dividend participation, liquidation economics and employee-pool headroom even though no registered capital amendment appears on the public company profile.

Design Interest Classes Around Real Decisions

The company agreement may create classes with special rights. The Commerce Act expressly allows enhanced voting power, guaranteed or additional dividends, preferential liquidation participation, redemption rights and non-voting interests. It may also give a class or named members a voting privilege or veto.

Use those tools as a coherent system rather than a menu. The documents should answer, at minimum:

• which class elects or removes management and approves a financing
• whether a preference is participating, cumulative or subject to available distributable profit
• how a conversion, sale or liquidation waterfall works
• whether new issues trigger pre-emption, consent or anti-dilution protection
• which decisions require a class vote, investor consent or a higher majority

Rights of one class cannot be restricted selectively within that class. Where a resolution affects a class, the statutory quorum and majority rules apply to that class separately. Contradictory terms across the company agreement, an investment agreement and an employee plan create uncertainty precisely when a funding or exit needs to move quickly.

The Members' Book: Private, but Not Secret

The company itself maintains the authoritative members' book. It records each member's identity and address, identifying number, acquisition date, number and class of interests, and the value and type of contribution. Management, or a person it appoints, must enter qualifying changes within seven days after the required documents are presented.

This gives a DPK more ownership privacy than an OOD whose partners are visible through filed acts, but it is not absolute confidentiality. Every member may inspect the book and obtain an extract. An interested third party may request an extract concerning the interests held by a specified member. The company agreement itself is published, so class architecture may also be visible even when the complete cap table is not.

Treat the book as controlled corporate data: assign an owner, keep a documented change log and backups, restrict unnecessary access, and apply data-protection rules to personal identifiers. Investors should require a certified extract and reconcile it against issue, transfer, option and contribution documents during due diligence.

Transfers, Leavers and Change of Control

DPK interests are freely transferable unless the company agreement provides otherwise. The default transfer contract requires notarised signatures, but the agreement may permit ordinary written form. A transfer, inheritance or pledge must be entered in the members' book to take effect against the company.

The agreement can add a lock-up, rights of first refusal, co-sale rights and other conditions. It may also address compulsory transfers, suspension of votes pending a required transfer and a corporate member's change of control. A transfer that breaches agreed restrictions is generally ineffective against the company and third parties unless the general meeting decides otherwise.

Draft the operational sequence, not only the commercial label. State who gives notice, what evidence accompanies it, how price is determined, when approvals expire and when the book is updated. Founder-vesting or good-leaver/bad-leaver economics need particularly clear triggers, valuation and payment mechanics.

Employee Interests and the 15% Limit

The DPK has an express route for giving people employed by the company—regardless of the type of contract or legal relationship—a right to acquire interests. The right is exercised through transfer of the company's own interests; it is not itself transferable. The aggregate number acquired through this employee route cannot exceed 15% of all interests.

The general meeting approves the arrangement and may authorise management for up to three years to make grants. A written agreement with each participant is still required. The grant terms can define vesting milestones, exercise events, leaver treatment and a post-acquisition transfer restriction of up to five years. Management must track outstanding and exercised awards and report specified figures with the annual financial statements.

Do not advertise an "ESOP pool" before confirming that the company will hold enough own interests, the dilution model works across classes, and the 15% test can be monitored. Employment, personal-tax, social-security and accounting consequences require separate analysis at grant, vesting, exercise and disposal.

Convertible Loans Require Conversion Plumbing

The Commerce Act permits the general meeting to issue acquisition rights, including loans convertible into interests. The company agreement must specify the conditions and procedure for issue and exercise. A short loan agreement that says only "converts at the next round" is not an adequate corporate mechanism.

Align the debt document and company agreement on the conversion trigger, valuation or discount, cap, interest treatment, class received, fractions, approval authority and outcome if no qualifying round occurs. Model the fully diluted ownership alongside existing options and special rights. A foreign SAFE or convertible-note template should not be assumed to produce the intended Bulgarian corporate, insolvency, tax or accounting result without adaptation.

Governance and Investor Protection

A DPK has a general meeting and either one or more managers or a management board. The general meeting controls core matters including amendments, new or cancelled interests, exclusions, management appointments, annual accounts, profit distributions, own-interest acquisitions, conversion and termination. It must meet at least annually by 30 June.

Investors commonly translate commercial control into reserved matters: budgets, new securities, related-party transactions, borrowing, IP disposal, senior hires, changes of business and exits. The company agreement should distinguish matters requiring a general vote, class approval or manager/board approval and avoid paralysing routine operations.

Statutory safeguards also matter. Members holding at least 5% of all votes can request a meeting and, if management does not act within the statutory periods, can convene it through a Commercial Register invitation. Members are entitled to meeting materials, information on company affairs and inspection of company records. Managers and board members owe duties of care and loyalty, must disclose conflicts, and can face liability for damage.

Minority protection should additionally cover information cadence, observer or appointment rights, dilution, related-party dealings, transfers, deadlock and exit. Keep enforceable company-law rights in the company agreement; use the investment agreement for confidential commercial obligations, warranties and funding commitments, with clear consistency and enforcement clauses.

Plan the Conversion Before the DPK Outgrows Itself

If the regular annual meeting finds that the DPK failed the eligibility test at the end of the preceding financial year, the company must convert into another capital company. If it has not converted by the end of the financial year following that meeting, the district court may terminate it on a prosecutor's claim.

Do not wait for the statutory end point. Select the likely successor—often an OOD or AD—before a major round, and map each DPK class, option, veto and convertible instrument into the destination form. Review contracts, licences, bank facilities, grants and shareholder consents for change-of-form consequences.

Tax, Accounting and the Operating Checklist

A DPK receives no special corporate-tax holiday. Bulgarian resident companies are generally subject to the standard 10% corporate income-tax rate on taxable profit. Distributions, employee awards, interest, related-party terms, repurchases and exits can each produce separate company or recipient-level tax questions. Our Bulgarian corporate-tax guide provides the wider framework.

Before each quarter closes, confirm that:

• the statutory staff, turnover and asset tests remain within range
• the legal capital schedule, members' book and accounting ledger reconcile
• contributions and transfers have complete evidence and timely book entries
• option, own-interest and fully diluted calculations respect their ceilings
• class consents, conflicts and reserved-matter approvals are documented
• the annual meeting can establish capital movement and receive the employee interest report
• conversion planning begins before growth, a licence or a financing makes it urgent

How Lion Consult Can Help

Lion Consult can review or redesign a DPK company agreement, align class and investor rights, structure employee participation and convertible finance, audit the members' book, and prepare a conversion roadmap for a growing company.

Contact Lion Consult before issuing a new class, promising employee equity, signing convertible finance or approaching the statutory size ceiling.

This article reflects general information available on 1 August 2026. Confirm the current Commerce Act, company agreement, tax and accounting treatment, and any sector-specific requirements before implementing a DPK transaction.

Frequently Asked Questions

What is a variable-capital company (DPK) in Bulgaria?

A DPK is a Bulgarian limited-liability corporate form whose capital is variable and not recorded as a fixed amount in the Commercial Register. Its single-owner version is an EDPK. It is designed for eligible smaller enterprises and supports configurable interest classes, employee acquisition rights and convertible finance.

What are the DPK size limits in 2026?

The enterprise must have an average staff headcount below 50 and must remain within the statutory annual-turnover and/or asset limits. The Commerce Act's legacy BGN 4 million financial ceiling converts under the euro rules to EUR 2,045,167.52; it should not be rounded to EUR 2 million.

Is the ownership of a Bulgarian DPK public?

The complete cap table is maintained in the company's internal members' book rather than as registered capital ownership in the Commercial Register. It is not absolutely secret: members can inspect it, and an interested third party may request an extract concerning the interests held by a specified member.

Can a DPK issue different classes of interests?

Yes. The company agreement may establish classes with different voting, dividend, liquidation, redemption and other rights. Class terms, approval thresholds and their interaction with investor agreements should be drafted as one coherent system.

Can a Bulgarian DPK offer employee equity?

Yes. The Commerce Act allows rights for persons employed by the company to acquire company-owned interests. The aggregate number acquired through this route may not exceed 15% of all interests, and each grant requires the statutory approvals, tracking and written documentation.

Can a DPK use convertible loans?

Yes. The general meeting may approve loans convertible into interests, but the company agreement must define the conditions and procedure for issue and conversion. The loan, class rights, approvals, cap table and tax and accounting treatment must be aligned.

What happens when a DPK outgrows its eligibility limits?

If the regular annual meeting finds that the company failed the statutory test at the end of the preceding financial year, the DPK must convert into another capital company. Failure to convert by the end of the following financial year can lead to court termination on a prosecutor's claim.