Company Liquidation in Bulgaria — Step-by-Step Procedure (2026)

Legal framework of liquidation

The liquidation of a commercial company in Bulgaria is governed by several key legislative acts:

• Commerce Act (CA) — Chapter XVII, Art. 266–274 regulates the grounds for termination, appointment of a liquidator, their powers, and the procedure for asset distribution.
• Tax and Social Insurance Procedure Code (TSIPC) — Art. 77(1) obliges any company undertaking termination actions to notify the NRA territorial directorate of registration within 7 days. The NRA has 60 days to issue a certificate or initiate an audit.
• Social Insurance Code (SIC) — requires a certificate from the NSSI for a transferred insurance archive before deletion.
• Accounting Act — requires preparation of an opening and closing liquidation balance sheet, as well as annual financial statements for the liquidation period.

It is important to note that liquidation is a voluntary procedure initiated by the company's owners. It differs from insolvency (bankruptcy), which is a compulsory procedure in case of insolvency or over-indebtedness.

Grounds for termination

Under Art. 154 of the Commerce Act, a limited liability company is terminated in the following cases:

• By resolution of the general meeting of partners — the most common ground. A majority of ¾ of the capital is required (or other as provided in the articles of association).
• Upon expiry of the term specified in the articles of association — if the company was incorporated for a fixed period.
• Upon declaration of insolvency — under Part IV of the CA.
• By court decision — on grounds provided by law (e.g., violation of mandatory rules).
• By decision of the sole owner of capital — for an EOOD, a decision by the sole owner is sufficient.

After the termination decision is taken, liquidation proceedings are opened, unless the company's assets are insufficient to cover its liabilities — in which case insolvency proceedings are initiated.

9 steps of the liquidation procedure

The liquidation goes through the following mandatory stages:

1. Notification to the NRA (Art. 77(1) TSIPC)

   Within 7 days of the termination decision, the company must notify the competent NRA territorial directorate. The Revenue Agency has 60 days to conduct a review or audit and issue a certificate under Art. 77 TSIPC. Without this certificate, the deletion cannot proceed.

2. Liquidation resolution and appointment of liquidator

   The general meeting (or the sole owner) adopts a resolution to terminate the company, sets the liquidation period (minimum 6 months), and appoints a liquidator. The liquidator may be the current manager or a third party. The resolution also determines the liquidator's remuneration.

3. Registration in the Commercial Register

   The liquidation resolution, liquidator details, and liquidation period are registered in the Commercial Register at the Registry Agency. From this point, the designation "in liquidation" is added to the company name. The state fee for registration is BGN 30 for electronic filing.

4. The liquidator assumes management

   After registration, the liquidator replaces the manager and assumes full management of the company. Their main duties include: completing ongoing transactions, collecting receivables, liquidating assets, and satisfying creditors. The liquidator is required to invite creditors to submit their claims through a written notice and an announcement in the Commercial Register.

5. 6-month creditor period

   Under Art. 272(1) of the CA, the company's assets may be distributed among partners no earlier than 6 months after the creditor invitation is published in the Commercial Register. During this period, creditors submit their claims, and the liquidator satisfies or secures them.

6. NSSI certificate

   The liquidator submits the company's insurance archive (payroll records, employment contracts, insurance booklets) to the relevant NSSI territorial division. The National Social Security Institute issues a certificate for the submitted archive within approximately 1 month. This certificate is a mandatory document for deletion.

7. Accounting actions

   The liquidator prepares: an opening liquidation balance sheet as of the date of liquidation registration; annual financial statements for each calendar year of the liquidation period (if liquidation continues for more than one year); a closing liquidation balance sheet after completion of all operations; and a liquidator's activity report, including distribution of residual assets.

8. Application for deletion from the Commercial Register

   After the creditor period expires, all creditors are satisfied, and certificates from the NRA and NSSI are obtained, the liquidator files application B6 in the Commercial Register for deletion of the company. The application is accompanied by: the closing liquidation balance sheet, the liquidator's report, the Art. 77 TSIPC certificate, and the NSSI certificate.

9. Final tax return

   Within 30 days of the company's deletion from the Commercial Register, the liquidator must file a final tax return under the Corporate Income Tax Act (CITA) and pay the corporate tax due for the last tax period.

Expected timelines

The duration of the liquidation procedure depends on multiple factors — assets, liabilities, employees, and tax registration:

The accelerated procedure (approximately 3 months) is possible when all of the following conditions are cumulatively met: the company has not conducted activity; has no employees; has not been VAT-registered for at least 12 months; has no unsettled public liabilities; has no pending litigation. In such cases, the NRA issues the Art. 77 TSIPC certificate significantly faster.

Tax aspects of liquidation

Liquidation has significant tax consequences that must be carefully planned:

• Corporate tax — the company owes 10 % corporate tax on profit for the last tax period (from the beginning of the year to the date of deletion). The tax return is filed within 30 days of deletion.
• Tax on liquidation share distribution — when distributing residual assets among partners, a 5 % tax is due on the positive difference between the liquidation share and the documented acquisition cost of the shares. The tax is final and is withheld by the liquidator.
• VAT — if the company is VAT-registered, deregistration must be carried out. Upon deregistration, VAT is charged on available assets for which input tax credit was used.
• Advance payments — advance payment obligations under the CITA continue during the liquidation period.

Note that the tax on the liquidation share is 5 % (not 10 %), as it is treated similarly to the dividend tax under the PITA, or under the CITA for legal entity recipients.

Practical tips

Based on our experience in accompanying liquidation procedures, we would like to share the following recommendations:

• Plan ahead — before starting the procedure, ensure all tax returns have been filed correctly and on time. Delays most often come from NRA audits triggered by incomplete or incorrect reporting.
• Deregister for VAT in advance — if you plan a liquidation, consider voluntary VAT deregistration at least 12 months in advance. This significantly speeds up the procedure.
• Settle employment relationships — terminate employee contracts while observing notice periods and paying all due compensation. Unresolved labor disputes can block the liquidation.
• Prepare the insurance archive — organize payroll records and insurance documents before submitting them to the NSSI. An incomplete archive leads to delays of months.
• Engage a qualified accountant — liquidation accounting has specific requirements different from ongoing accounting. The opening and closing liquidation balance sheets must meet certain standards.

Frequently asked questions