site.btaFast-Track Liquidation Procedure Enacted

Bulgaria's Parliament on Wednesday passed on second reading an omnibus bill amending the Commerce Act providing for a fast-track liquidation procedures. The matter was regulated by two bills which established a general framework for the rules on cross-border corporate transformations and were passed in the first reading. The new fast-track liquidation procedure is available to companies that have not operated, hired staff, or registered for VAT over the last 12 months.

To be eligible for fast-track liquidation, companies must not incur obligations to central or local government nor any tax or social-security obligations to the National Revenue Agency. Additionally, such companies must not be respondents in pending court proceedings, debtors in enforcement or payment-order actions, or be subject to a commenced enforcement under the Registered Pledges Act or the Financial Collateral Arrangements Act.

Companies' assets can only be distributed three months after the Commercial Register notice to creditors. Liquidators must submit a declaration regarding the circumstances of the fast-track liquidation procedure when filing for cessation of business and liquidation.

The transformation of commercial companies with pending applications for registration or certificates of compliance will be completed under the pre-existing terms and procedure until the new law enters into force.

Once the Registry Agency's technical capabilities are in place, submitted applications will be reviewed within one month.

"We are voting on the two bills, combined into one, to provide Bulgarian businesses with a liquidation procedure that is faster compared to the traditional procedure," said Georgi Georgiev MP of GERB-UDF. He added that it is crucial for all interested parties in a liquidation procedure to be able to protect their rights, with the primary role belonging to the capital owners or, respectively, the partners or shareholders.

Georgiev also noted the main issue of the extremely poor organization of the State-owned company Information Services Plc, which has failed for a year to act on an important parliamentary resolution regarding the introduction of variable capital companies. "This failure has resulted in the will of the Bulgarian legislator being ignored by Information Services," the MP argued. He insisted that the company has not organized its work on public procurement and the technical actions required to produce the necessary forms and procedures for the Registry Agency.