Fake Manager - How to Appoint a Person in the Company

 

 This is a person who only seemingly runs the company, but actually serves only as a facade while the company is run by another. The nominee director service is widespread abroad, especially in offshore areas. But is it applicable also in Bulgaria?

 

What is the meaning of a fake manager?

The idea is that while there is a fake manager, the real one remains hidden. He keeps anonymity. The decision-maker is different from the one in the Commercial Register. Most often this is useful for foreign citizens who want to conceal income in the country or to achieve tax optimization.

 

How does it happen in practice?

By law, the governor in Bulgaria has a great power. He has the full right to represent the company - to sign contracts, appoint employees, borrow credits, and so on. It is too risky for these responsibilities to be entrusted to a fictitious governor. Therefore, when someone offers this service, a contract is signed between the affiliated person and the owner of the firm, which drastically limits the rights of the manager.

 

Is there an application in Bulgaria?

The fact is that some companies have a fake manager. But this is extremely dangerous. The restrictions mentioned in the previous paragraph, which are negotiated between owner and manager, can not in practice be applied. This is because any agreements to limit the power of authority of the manager of a firm do not have effect vis-à-vis third parties. This means that the manager can appoint one employee, even in his contract with the business owner to write that he has no right to do so. The contract of employment is quite real because the employee can not know that the rights of the manager are limited. The law protects his interest.

 

The problem of anonymity

In some cases, by negotiating various benefits and security mechanisms, the risk of representative power could be controlled. However, there is another problem here - not only the manager, but also the owner of the company, enter the Trade Register. The data in the registry is public and anyone can see them in a few clicks. This means that, in addition to a fictitious director, the company must also have a fictitious owner.

 

In fact, the real owner of the company remains formal without any rights on it. Yes, he has a contract with the fictitious manager, but what is the guarantee?

 

Is there an overpass?

It can be said that so many people practice it. Instead of a person registering the company in his own name, he registers it to a relative. The close one is a trusted person who can be relied on to perform the orders of the real owner. Often these are relatives or spouses. Some entrepreneurs take this step to reduce the tax or social security burden on the company. Others are concerned about the fact that they have been accountable in their personal capacity.

 

Is it legal and what are the risks?

Formally, the appointment of a fictitious manager falls into the categories of so-called seeming-disguised deals. They are not forbidden by law. However, the risks are substantial. It is imperative to consider the impossibility of limiting the representative power of the manager. When the appointed person is a close relative, it will not always be possible to avoid the problem that the real owner conceals his or her duties. Generally, the figure of a fake manager is not applicable in our country. It is characteristic of countries that aim to become an offshore area. Bulgaria is attractive for foreign investors with low taxes, but anonymity is something that our laws do not allow.