Liquidation of a Bulgarian company
How to close a company in Bulgaria? What are the steps, requirements, and timeframe?
The subject of this article is to explain the procedure of liquidating of a Bulgarian company.
At any point in the existence of the company, the shareholders can take a decision to simply close it or legally said to liquidate it. The procedure has two main stages, which are processed by the Bulgarian Commercial register.
The first stage to close a company
The very first step is to invite the shareholders for a General Meeting and to decide on cessation of activities and set a deadline of liquidation which cannot be less than 6 months. Our experience has shown us that most of the time the shareholder may not have the consent of everyone so their decision may not meet the requirements for the majority or even worse not to have a legit invitation for the general meeting. In such cases, professional assistance is highly recommended.
In the decision, the shareholders shall take a decision who is going to be appointed as a liquidator.
A lot of people will ask what the liquidator is doing?
From that moment the decision for the liquidation and the consent of the liquidator, he is the one who manages and represents the company. He cashes property (sells real estate, movable property, collect debts) and pays the creditors if any.
Prior to file the decision to liquidate the Bulgarian company in the Commercial register, the liquidator shall notify the NRA and NSSI for the upcoming termination of the company.
This stage finishes with an invitation to the company’s creditors to lodge their claims against the company within a specified period, which may not be less than 6 months – the invitation is announced in Commercial Register.
Once the assets are cashed and creditors – satisfied, the procedure proceeds to the second stage. In order for the company to be erased from the Commercial Register, the deadline for filing the claims of creditors shall be expired. At this stage: the closing balance sheet has to be prepared, along with a decision of the shareholders with which they accept the mentioned balance.
Often owners and managers are confused when a liquidation or an insolvency procedure should apply. The main differences between liquidation and insolvency are connected with the protection of the interest and the ability to satisfy the creditors. In general, the liquidation does not protect the interests of the creditors in such multilateral way. And there is a reason for this – in the liquidation procedure, the company HAS ALWAYS ENOUGH security and capacity to satisfy the creditors. It is always the opposite in the insolvency procedure.
If you want to learn more about the insolvency procedure and decide which one you really need to apply, you may check our article about insolvency proceedings in Bulgaria here.
Our lawyers can fully assist you with professional advises, along with the preparation of the required documents for the initiation of the liquidation process, the appointment of a professional liquidator, satisfying the creditors and the erasure of the company from the Commercial Register.
For any questions and more information about company liquidation in Bulgaria, please do not hesitate to contact us.