The Bulgarian Trade Act (TZ) regulates how companies are wound up.
Different ways of winding up
This act also stipulates the conditions under which particular types of business can be wound up.
In the case of limited companies (OODs), this happens when the enterprise's licence expires or when two-thirds of its associates decide to wind the company up. The company can terminate its registration if the associates present compelling grounds for this to happen.
Public companies (ADs) may be liquidated if their licence expires or if a general meeting of the company's shareholders decide for this to happen.
When filing for bankruptcy is the only option left for a business owner, it pays to cut losses, initiate proceedings sooner rather than later, and move on to a new business project.
The procedures for voluntary liquidation vary depending on whether the enterprise is a limited, public or sole trading company.
Liquidating a company
When an enterprise decides to cease trading, it is wound up. Liquidators may be appointed by the Registry Agency. The liquidators shall draw up a balance-sheet as of the time when the company ceased trading, and prepare a report giving the total balance. At the end of each year, the liquidators draft a final settlement of accounts and submit annual financial and activity reports to their governing body.
When a company ceases trading, this is recorded in the Commercial Register, after an application form has been submitted.
The Registry Agency issues certificates confirming that the enterprise has ceased trading and no longer appears in the Commercial Register.
Cancellation of the enterprise's BULSTAT is also done at the register. To do this, the following documents must be submitted:
- BULSTAT card (original).
- A copy of the document confirming registration deletion.
- If the document confirming deletion is not provided by a staff member of the enterprise but by an authorised representative, a notarised power of attorney must also be produced.
Deletion from the social security system
When a company is wound up, its employees shall be given notice.
Deletion from the tax register
If the company is registered for VAT, an application for de-registration must be submitted to the regional branch of the National Revenue Agency. This application must state why the business is being wound up, and have the following documents enclosed:
- A certificate of taxable turnover for each of the last 12 months
- A certificate of the total taxable intra-Community acquisitions for the current and previous years
- A certificate of the total basic tax on supplies related to sales abroad, and the VAT registration certificate(s)
The tax authorities will carry out a check within 7 days of the application being submitted. This check will be assessed within a further 7 days.