Obligations preceding liquidation and transformation of companies in Bulgaria, transfer of enterprises and deletion of sole traders changes in legislation2011

In the State Gazette, issue 14 of 15 February 2011 an Act for Amendments and Supplements to the Tax and Social Insurance Code (TSIC) is promulgated. It introduces various changes, one of the most substantial of which is related to the provision of Art. 77 of the TSIC, imposing the obligation for prior notification of the National Revenue Agency (NRA) in case of termination (liquidation) and transformation of companies, transfer of enterprises and deletion of sole traders from the Company Register of the NRA at its seat not later than 7 days before submitting of an application to the Company Register for registration of the relevant circumstance subject to entry therein (liquidation, transformation, transfer of enterprise, deletion of sole trader). For an application to be considered by the Registry Agency, the merchant had to enclose to the application a document proving that the NRA has been notified within the said 7-days term. The document used in practice for this purpose was the notification itself, as submitted by the merchant with an incoming file number placed on it by the NRA, which was done immediately upon submission of the notification.

Apparently the law-making body was of the view that the 7- days term is insufficient for organising and carrying out of tax audits and checks, considering that the new wording of Art. 77 of the TSIC, effective as of 15 February 2011 gives 60 days to the territorial directorate of the NRA to issue a certificate proving that it has been notified on the forthcoming corporate change.

The significantly extended term may considerably delay the performance of operations and transactions related to:
– termination of companies by liquidation;
– transformation of companies taking any of the forms regulated in Chapter Sixteen of the Commerce Act;
– transfer of enterprise under Art. 15 of the Commerce Act; and
– deletion of a sole trader from the Company Register.

In view of the above, the implementation of the said operations and transactions necessitates a relatively earlier and careful planning.