The National Assembly of Bulgaria has adopted significant amendments to the Commercial Law, simplifying the process of voluntary liquidation for companies. This change allows eligible companies to undergo a streamlined and accelerated liquidation process, provided they meet six specific criteria. The aim is to help inactive companies quickly and efficiently terminate their existence without lengthy administrative or judicial procedures.
Which companies can benefit from the new procedure?
The biggest advantage of the new regulations is that they make it easier for companies that are not active and do not have significant financial or legal obligations to liquidate. To qualify for the fast liquidation procedure, companies must meet the following conditions:
- No business activity: The company must not have conducted commercial activity in the last three years.
- No assets or liabilities: The company must not hold assets or owe liabilities to third parties.
- No liabilities to the state: The company must not have outstanding debts to the state budget or social security funds.
- No employment relationships: The company must not have employees or any active employment contracts.
- No ongoing litigation: The company must not be involved in legal disputes or have pending judicial actions.
- Voluntary liquidation: The decision to liquidate must be made voluntarily by the company’s owners.
These new conditions offer significant relief to companies seeking a quick and effective way to wind down operations, avoiding the long and costly procedures that could take years.
How does the fast liquidation process work?
Once a company meets the criteria, the liquidation process can begin immediately. Under the new rules, the time frame for asset distribution and the conclusion of the liquidation has been shortened from six months to just three, significantly speeding up the process.
The steps for fast liquidation include:
- Decision to liquidate: The company’s governing bodies, such as the general meeting or board of directors, must make the decision to liquidate.
- Appointment of a liquidator: A liquidator is appointed to manage the liquidation process, carrying out responsibilities in line with the governing body’s decision.
- Completion of the liquidation procedure: The liquidator finalizes the company’s financial affairs, settles any outstanding liabilities, and distributes the remaining assets to shareholders.
- Company closure: Once all liabilities are settled and assets distributed, the company is removed from the Commercial Register.
Benefits of fast liquidation
The new amendments are designed to reduce administrative burdens and cut down on the time and costs involved in company liquidation. For eligible businesses, the entire procedure can now be completed in less than half a year, rather than taking years.
What are the risks?
While the procedure is simplified, it’s crucial that companies ensure they meet all the required conditions before filing for liquidation. Incorrect information or failure to fulfill any of the criteria could result in rejection of the process or even legal disputes.
How can we help you?
At G&P Law, we have a team of experienced specialists in commercial law and company liquidation. We can assist you throughout the entire process, ensuring compliance with the latest amendments to the Commercial Law. Our services include:
- Preparing and submitting all necessary documentation
- Providing consultations on legal and financial aspects of liquidation
- Negotiating with creditors and settling liabilities
- Finalizing the distribution of assets and closing the company
If your company meets the criteria for fast liquidation, or if you need more information, contact us. We’ll ensure a smooth and efficient termination of your company in line with the new legal regulations.