Liquidation Of Bulgarian Companies

The Bulgarian company liquidation procedure described below covers the procedure for liquidation of companies which were not duly re-registered within the legal deadlines. For liquidation of an active company, please feel free to contact us directly and we will advise the necessary steps depending on your company status. 

 

On the last day of December 2011 expired the statutory deadline for re-registration of Bulgarian companies and branch offices of foreign commercial companies by virtue of Bulgarian Commercial Register Act. This fact has the following consequences:

 

1. All non-re-registered Bulgarian sole traders and branch offices of foreign companies shall be considered to be automatically deregistered and dissolved as of 01/01/2012. Their company file shall be archived by the court of their seat registration.

 

2. The activity of Bulgarian commercial companies (LLC, SMLLC, JSC etc.) which have not applied for re-registration was suspended since 01/01/2012. These companies shall not be automatically deregistered and dissolved but will rather continue to legally exist. They, however, shall not have the right to do any business, to submit court claims, to commence debt collection proceedings or to perform any asset disposition transactions except for payment of salaries to their employees or payment of public duties. All disposition transactions (e.g. sale of a real estate acquired on behalf of a non-re-registered company) performed after 31/12/2011 shall be considered null and void.

 

Since 01/01/2012 the legal representatives of Bulgarian companies (e.g. managers of LLC) which business activities have been suspended are only entitled to accept statements addressed to these companies. All other legal actions that need to be undertaken by such company for its deregistration and dissolution shall be made by a/ a liquidator who is authorized personally by the company’s owner or – if this is not the case – b/ appointed by the state authorities.

 

In this situation, excluding the bankruptcy procedure, there is no more but only one way forward for the companies in Bulgaria that have not been re-registered by the end of 2011 – liquidation. The liquidation procedure could be initiated by a/ the company or b/ ex officio. The first option is highly recommended because in this case the procedure will be supervised by the company owner or his proxy without any state authorities being involved (while in case of bankruptcy or liquidation ex officio state authorities control the process and its outcome) and the result of the liquidation procedure could easily be predicted.

 

By 31/01/2015 every privy person (incl. legal representative of the company or its proxy) could file for liquidation of a Bulgarian company, for appointment of a liquidator and for determination of term for liquidation. The absolute minimum for the liquidation procedure to be completed is 6 months but practice shows that it is usually completed for not less than 7-8 months, usually for around a year. The liquidator, who often is personally authorized by the company owners (for example a lawyer), shall invite the company creditors to submit their claims (even if the company was dormant all the time and does not have any debts), prepare and present an initial liquidation balance as well as a report to the balance. When the creditors are satisfied (or it is acknowledged that the company has neither creditors nor debts) and the rest of the assets are divided between the owners of the Bulgarian company or if it is acknowledged that the company does not have any assets, the liquidator shall submit a final application for deregistration and dissolution of the company.

 

After January 31 2017 the Agency shall automatically deregister all Bulgarian companies which re-registration has not been requested, which have not requested a liquidation procedure, for which the liquidation has not been completed due to inactivity of the liquidator or for which insolvency procedure has not been started.

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