Hundreds of thousands of companies will be able to conduct liquidation proceedings in much shorter terms, including when they have not been active for a long time and have no hired staff. This is provided for by the additions to the Trade Act, which the government submitted for adoption in the National Assembly, reports "Now".
In these cases, the possibility of "one stop service" through the Registration Agency. The extra will benefit commercial companies that meet the exact conditions defined by the law.
Creating a legal framework to achieve accelerated liquidation of legal entities is also a commitment of our country under the Recovery and Sustainability Plan, which means that changes must be adopted quickly, regardless of political upheavals.
The liquidation of the commercial company is a voluntary proceeding for the distribution of its property after its termination. The goal is to collect and liquidate all the assets of the company and after all creditors are satisfied, the balance is distributed among the partners.
In the reasons for the draft law, it is stated that at the same time the voluntary liquidation of a business in Bulgaria takes nearly a year, the procedure is lengthy and expensive. And on average, between 30,000 and 50,000 new legal entities are created per year, and over 90% of newly started companies fail in the initial steps.
According to the government, the conduct of the proceedings now requires the submission of several consecutive applications for the entry of various circumstances and the announcement of acts in the Commercial Register – for registration of termination of activity and liquidation, invitation to creditors, for deletion after completion of liquidation. Along with this, a notification is also submitted to the National Revenue Agency for the upcoming liquidation proceedings, as well as to the National Insurance Institute for the transmission of payrolls, which end with certificates.
The proposed additions to the Commercial Law provide for the creation of a new article "Expedited liquidation proceedings". Facilitation of the process is achieved in two main directions – shortening the terms of procedures and introducing "one-stop service"; through the Registration Agency, where all applications will be submitted. The conditions for conducting quick liquidation proceedings are only declared, and the submission of a declaration for them will be sufficient for consideration of the applications in the proceedings in shorter terms.
In order to take advantage of the new opportunity, the company must meet five conditions at the same time: it has not been operating or has stopped operating more than 12 months ago; has not hired workers or terminated employment with them more than 12 months ago; has no VAT registration or has terminated its registration more than 12 months ago; there are no outstanding debts to the state and municipalities; there are no pending proceedings to establish tax liabilities and obligations for mandatory insurance contributions, to which the National Revenue Agency is a party.
In the case of quick liquidation, a shorter term is provided for satisfying the creditors – the company's property is distributed if three and not six months have passed since the day on which the invitation to creditors was announced in the Commercial Register.
As in the general case, the started transactions will have to be completed, the property will have to be liquidated, and all the creditors' claims will have to be secured or fulfilled.
The procedure provides for the Registration Agency to notify the NRA electronically of the receipt of an application for rapid liquidation proceedings. Within a 30-day period, the NRA shall electronically provide the AB with the information on whether the conditions for conducting expedited proceedings are present.
When submitting an application for termination of activity and quick liquidation, the company, again through the Registration Agency, will submit an application for the issuance of a certificate for handing over the payroll. And she will inform the NOI immediately and ex officio.
The relevant Territorial division of the institute will issue a certificate for handing over the payroll within 30 days from the registration of the termination of the commercial activity and the opening of quick liquidation proceedings, provided that the company has no outstanding obligations. The certificate will be sent electronically to him and to the Registration Agency.