Last Updated on October 15, 2023 by Bulgarian attorney
Liquidation of a Bulgarian company
How to close a company in Bulgaria?
The procedure of closing a Bulgarian company is called ‘liquidation of the company’. The procedure is approved by the Company Act which regulates all the requirements for starting and performing of the liquidation. The Bulgarian legislation allows all the creditors to present their claims to the company within 6 months from the initiated liquidation procedure. After the six months period the company is officially removed from the Commercial Register.
To get help with the liquidation of a Bulgarian company by a team recommended by Legal500, please get in touch.
The liquidation begins with the decision of the shareholders to terminate the business activities of the company and to appoint а liquidator. The six month period of the liquidation is in order to:
- The completion of the ongoing transactions;
- To cash the assets of the company;
- To meet and satisfy the creditors;
- If there is property left it should be divided among the shareholders.
Our lawyers will assist you with the preparation of the required documents for the initiation of the liquidation process, the deletion of the company in the Commercial Register and the appointment of a professional liquidator (a representative of our company) to satisfy your requirements.
Liquidation of a branch in Bulgaria
Opposite to liquidating a limited company, the branch dissolution takes much less. The branch does not follow the liquidation proceedings. The branch liquidation is as simple as filling an application to the Commercial Registry, after which the branch is closed.
Liquidation of a subsidiary in Bulgaria
Subsidiaries follow the standard liquidation procedure that may take to up 9 months. Steps are the same as liquidating a limited company owned by the private person.
Dissolving a subsidiary company becomes a distinctive process when the parent company has already ceased to exist. In such a situation, the liquidation procedure commences through the local public prosecutor’s office. Subsequently, the court takes charge of appointing a liquidator through administrative channels. This approach guarantees that the daughter company’s assets and operations are managed in compliance with legal requirements, even in the absence of the parent company.
The difference between liquidation and insolvency
- The liquidation is voluntary act that commences by decision of the general meeting of the shareholders of the company, whereas the insolvency is always opened by a court order.
- The liquidation protects the interests of the debtor, whereas the insolvency protects the interests of the creditors.
- Both liquidation and insolvency aim to satisfy the creditors through establishing the insolvency estate, its transformation into money and distribution among creditors. The competence of the syndic and liquidator is quite similar.
If you consider the liquidation is not the right procedure for your business, you may have a look at our article about insolvency proceedings in Bulgaria.
Deregistration of a freelancer in Bulgaria
The process of deregistering a freelancer in Bulgaria is a formal procedure aimed at concluding one’s self-employment activities. Unlike company liquidation, the freelancer deregistration process is typically more expedited, with the goal of finalization within a few weeks
Strategic Timing for Liquidation: Navigating Tax Implications
When you commence the liquidation process, it invariably triggers a tax audit of your company. To prevent the inclusion of past liabilities, you might consider waiting for a two-year period to elapse before initiating liquidation, particularly if you have pending VAT transactions or unresolved disputes.
For more details about company liquidation in Bulgaria, please do not hesitate to contact us.
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