In short: A limited liability company is a business that is a legal person separate from its owners: it has its own money and obligations, pays corporate tax and may distribute profit to its owners as dividends.
Simply put: With a company, the business is a separate person: it has its own account, assets and debts. The company's money is not the owner's money — it becomes the owner's only when paid out lawfully, as a salary or a dividend. That is why personal and business money are kept in separate accounts.
Example: A single-member company makes a profit of €20,000 before tax. After corporate tax €18,000 is left. The owner pays out €8,000 as a dividend and keeps €10,000 in the company as a reserve (fictional example; rates in the box).
Watch out: the myth "the company is mine, so its money is mine" leads to tax and legal risk. Mixing personal and business money is the most common mistake.
Example: Bulgaria — Single-member (ЕООД) and multi-member (ООД) limited companies are governed by the Commerce Act and entered in the Commercial Register. Corporate tax is 10% (Corporate Income Tax Act, Article 20); dividends paid to individuals bear a 5% final tax (Personal Income Tax Act, Article 46(3)) — in the example, €2,000 and €400. Transferring a share requires notarisation and entry in the register (Commerce Act, Article 129(2)).
Check in your country — The corporate tax rate, the tax on dividends, the minimum capital and how to register. Ask the tax authority or the business register.
Source: Commerce Act — https://lex.bg/laws/ldoc/-14917630 (in Bulgarian) · Registry Agency (Bulgaria) — https://portal.registryagency.bg