Download Basic Principles Of Corporate Management Of State

BASIC PRINCIPLES OF CORPORATE
MANAGEMENT OF STATE COMPANIES
IN BULGARIA
MINISTRY OF ECONOMY, ENERGY AND TOURISM
GENERAL REVIEW
In the ranking list of the Top 100 most
profitable companies for 2010 – among
others 14 are state companies.
The group consists of mainly energy and
transport companies.
GENERAL REVIEW
State
companies
report
significantly
successful financial results for 2010.
more
Transport companies narrowed their losses, energy
companies greatly increased their profits from a
year earlier. At the same time both show an
increase in revenue, which continued throughout
the first half of 2011.
The strong financial result of the largest state
companies means a significantly higher dividend
for the state.
DEVELOPMENT ROLE OF PSEs
The total amount of privatized fixed assets amounts
to 65.49% - compared to the amount of all state
assets at book value at 31.12.1995 and 99.18% of
the fixed assets defined for privatization.
The state has withdrawn from participation in
economic life by state companies except in the
sectors of energy and transport. In this sectors PSEs
operate along with private companies.
Strategic goals are approved by the Council of
Ministers and adopted by the National Assembly of
Bulgaria.
COMPARISON OF DEVELOPMENT
ROLES
Public Sector
 production of
electricity (nuclear
power)
 gas supply
 railway transport
 ports (river and sea)
 airports
Private Sector
 distribution of
electricity
 power generation
from renewable
energy resources
 air transport
 road transport
ORGANIZATION OF THE STATE
OWNERSHIP
Joint-stock company (JSC) a company whose
capital stock is divided into shares. The company (not the
shareholders) shall be liable before its creditors with its
assets. All shares can be possessed by a single person – in
our case – the state.
Limited liability company (LLC) may be formed
by one or more persons who shall be liable for the
company's obligations with their contributions to the
company's registered capital. It blends elements of
partnership and corporate structures.
JOINT-STOCK COMPANY
Corporate structure means:
 Legal personality
 Centralized management under a board
structure
 Its
existence
does
not
depend
on
membership
 Limited liability
 Transferable shares
JOINT-STOCK COMPANY
 They may be “public” or closely (privately) held
 The single owner is registered in Commerce
Register. Several shareholders are not registered
 Organs of JSC are
•
•
the general meeting of shareholders/single owner
the board of directors (one-tier system), or the
supervisory board and the managing board (two-tier
system)
JOINT-STOCK COMPANY
GENERAL MEETING/ SINGLE OWNER
 amends the Articles of Association;
 resolves on increase or reduction of the capital
stock;
 resolves on transformation and dissolution of the
company;
 elects and recalls the members of the board of
directors, or of the supervisory board as the case
may be;
 determines the remuneration of the members of
the supervisory board, or of the board of directors
 appoints and dismisses registered auditors;
JOINT-STOCK COMPANY
 approves the annual financial statement as audited
by the appointed registered auditor, resolve on
profit distribution and payment of dividend
 resolves on issuing of debentures
 appoints liquidators upon dissolution of the
company, except in the event of bankruptcy
 relieves of responsibility the members of the
supervisory board and managing board, or of the
board of directors
 resolves on other matters which by virtue of the
law or the Articles of Association are in its
competence
LIMITED LIABILITY COMPANIY
SIMILARITIES:
 both types of companies are separated legal
entities which have their own privileges and
liabilities distinct from those of their members
 creditors are granted (as opposed to shareholders)
priority over the company assets upon liquidation
or insolvency
 corporate assets cannot be withdrawn by its
shareholders/partners, nor can the assets of the
company be taken by personal creditors of its
shareholders/partners
LIMITED LIABILITY COMPANIY
MAIN DIFFERENCES :





minimal amount of capital required by low;
all partners (one or several) are registered;
each partner is entitled to take part in the management of
the company
manager/managers instead of board structure
general meeting of partners is entitled to:
 to resolve on additional monetary contributions
 admit and expel partners, give consent on the transfer of
an interest to a new partner
 resolve on setting up or closing down branches and
participation in other companies
 resolve on the acquisition or alienation of real property
ORGANIZATION OF STATE OWNERSHIP
FUNCTIONS
The Council of Ministers or the Ministers
(according to their branch competence) are
entitled to exercise the rights of the owner of
shares.
In a single person joint-stock company and a
single person limited liability company, the single
owner of the stock shall decide on issues within
the competence of the general meeting.
ORGANIZATION OF STATE OWNERSHIP
FUNCTIONS
THE MINSTER GIVES PERMISSION FOR:
 the disposal of the fixed assets
 rental of properties
 acquisition or disposal of shares
 mortgage and pledge of fixed assets
 for the conclusion of agreements, which recognize obligations
or release debt
MANAGEMENT AND PERFORMANCE
EVALUATION SISTEMS
 Election and nomination of management
 Incentives and remuneration
 Evaluation systems
THANK YOU FOR YOUR ATTENTION!
Ministry of Economy and Energy
www.mee.government.bg
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