Closing a company in Bulgaria from abroad is a task many owners put off for years. The company was registered while you were living here, or for a project that never happened. Then you moved to another country, and the company remains entered in the Commercial Register, with an address, a bank account and liabilities to the National Revenue Agency (НАП, NRA). The question we are asked most often is whether it can be closed without the owner coming to Bulgaria. The answer is yes.
In this article we explain the options when you want to be rid of a Bulgarian EOOD or OOD, how liquidation works in practice, what an attorney-in-fact can do instead of you and how long to expect it to take. We also describe the mistakes that most often delay the procedure.
Your options for getting out of the company
| Option | When it fits | Indicative time |
|---|---|---|
| Sale of the shares | There is a buyer and the company has no problematic liabilities | Weeks |
| Ordinary liquidation | You want the company to cease to exist | Usually at least 6–8 months |
| Fast-track liquidation | A company with no activity, employees, VAT registration or debts | 3 months by law, but at present it does not work in practice |
| Insolvency | The company cannot pay its debts | Set by the court |
| Doing nothing | Not an option | The risks build up every year |
Selling the shares instead of liquidating
If someone wants to take over the company – a partner, a business associate, a family member or an outside buyer – transferring the shares is faster than liquidation. You leave the company, and it carries on with a new owner. The agreement requires notarial certification of both the signatures and the content at the same time, which can also be done before a Bulgarian consul. The transfer is not allowed if the company has overdue unpaid wages or employees' social security contributions. We have written about the procedure in detail in our article on the transfer of company shares in an OOD.
What happens if you simply abandon the company
Many owners believe that if they stop filing accounts, the state will delete the company by itself. This is a myth. At present the law has no procedure under which the Registry Agency automatically deletes a company merely because it has not published its annual financial statements. The company remains registered, and each year without accounts is a separate offence, with a fine for the manager and a penalty for the company. Where the accounts for the last three years have not been published, the law presumes the company is insolvent (Art. 608(2) of the Commerce Act). We explain the risks in detail in our article on company strike-off for unfiled annual accounts.
Liquidation step by step
Ordinary liquidation is governed by Art. 266–273 of the Commerce Act (ТЗ). In practice it goes through the following stages:
- Dissolution decision. In an EOOD it is taken by the sole owner, and in an OOD by the General Meeting of the partners. The decision dissolves the company and appoints a liquidator and a period for the liquidation.
- Liquidator. The liquidator takes over the management of the company instead of the manager. The liquidator can be the owner, the manager or a third party – for example a person in Bulgaria you trust. The liquidator signs a notarised consent and specimen signature.
- Registration in the Commercial Register. The dissolution and the liquidator are registered. From then on, "in liquidation" is added to the company's name.
- Notice to creditors. The liquidator publishes in the Commercial Register a notice inviting creditors to lodge their claims (Art. 267 of the Commerce Act). The liquidator also notifies the National Revenue Agency (Art. 268(3) of the Commerce Act).
- Opening balance sheet and winding up the business. The liquidator draws up an opening balance sheet, completes current transactions, collects receivables, sells the assets if necessary and pays the debts.
- NRA inspection. After being notified, the National Revenue Agency may carry out an inspection or tax audit of the company. Well-kept accounts shorten this stage.
- Waiting out the six months. The remaining assets may be distributed among the partners only once six months have passed since the notice to creditors was published (Art. 272(1) of the Commerce Act).
- Final balance sheet and deletion. The liquidator draws up the final balance sheet, which is approved by the owner or the General Meeting, and files an application for the company's deletion (Art. 273 of the Commerce Act).
From our practice: A creditor who has brought a court case or holds a writ of execution against the company can ask the court to prohibit its deletion (Art. 273(3) of the Commerce Act). So before you start the liquidation, check for pending court cases and enforcement proceedings against the company.
What can be done with a power of attorney
Almost the whole liquidation can be carried out without you travelling:
- The dissolution decision can be signed by you abroad or by an attorney-in-fact holding an express power of attorney. In an OOD, the partners may be represented at the General Meeting by an attorney-in-fact.
- The liquidator can be someone who lives in Bulgaria. That person then represents the company in person before the authorities and the banks.
- If you are the liquidator, your consent and specimen signature are signed in person, before a Bulgarian consul or a local notary. You can entrust the remaining steps to a lawyer with a power of attorney.
- Communication with the NRA, the banks and the Commercial Register is handled by the lawyer and the liquidator, electronically wherever possible.
Documents signed before a foreign notary are authenticated with an apostille if the country is a party to the Hague Convention, or legalised if it is not. They are then translated into Bulgarian by a translator who has a contract with the Ministry of Foreign Affairs. A document certified by a Bulgarian consular officer needs neither an apostille nor a translation. We have described the form in detail in our article on a power of attorney from abroad: apostille and translation.
A realistic timetable
| Stage | What happens | Indicative time |
|---|---|---|
| Checks and preparation | Searches in the Commercial Register, NRA, bank, court cases; drafting the documents | 1–3 weeks |
| Signature, apostille and translation | Signing abroad and certification | 1–3 weeks |
| Registration of the liquidation | Application to the Commercial Register | Usually a few working days |
| Period for creditors | Winding up the business, NRA inspection | At least 6 months from publication of the notice |
| Final balance sheet and deletion | Approval of the balance sheet, application for deletion | A few weeks |
In practice, ordinary liquidation rarely takes less than 6–8 months. If the company has missed accounts, unpaid liabilities or assets to sell, it takes longer.
Costs
The costs depend on the state the company is in. They include the state fees for entries in the Commercial Register under the Registry Agency's tariff, notary fees, the apostille and translation of documents from abroad, accounting services for the liquidation accounts and the fees of the liquidator and the lawyer. If annual financial statements have been missed, restoring the accounts is added on top. So before you start, ask for a review of the company and a written cost estimate.
Common mistakes when closing a company from abroad
- Unpaid liabilities to the NRA. Taxes, social security contributions and fines for unpublished accounts must be paid. Without this, the liquidation cannot be completed smoothly.
- Missed annual accounts. The missed years usually have to be caught up before the liquidation balance sheet is prepared.
- Employees. Employment contracts must be terminated in accordance with the Labour Code, and wages and compensation paid.
- VAT registration. If the company is VAT-registered, deregistration must be planned together with the accountant.
- Forgotten bank accounts. An account that incurs fees can create new liabilities. The accounts are closed at the end of the liquidation, once the debts have been paid.
- Management address. If the contract for the address has expired, the NRA and creditors cannot serve documents on the company. Make sure someone receives the post until the company is deleted.
A company belonging to a deceased relative
Heirs often learn about a deceased parent's Bulgarian company when they are already living abroad. An EOOD owned by an individual is dissolved on the owner's death, unless the heirs ask to continue the business (Art. 157(1) of the Commerce Act). In an OOD, the deceased partner's membership ends and the heirs are entitled to the cash value of their share (Art. 125 of the Commerce Act). In both cases, a liquidation or a settlement of the share usually follows. We explain how heirs deal with all this through a power of attorney in our article on inheriting in Bulgaria from abroad.
Frequently Asked Questions (FAQ)
Do I have to come to Bulgaria to close my company?
Usually not. The dissolution decision, the power of attorney and – if you are the liquidator – your specimen signature are signed abroad before a Bulgarian consul or a local notary with an apostille. All the other steps can be carried out by a lawyer or a liquidator in Bulgaria.
How long does it take to liquidate an EOOD?
Usually at least 6–8 months. The law does not allow the assets to be distributed until six months have passed since the notice to creditors was published. Missed accounts and unpaid liabilities extend the timescale.
Can the company be deleted if I simply stop filing accounts?
No. At present the law does not provide for automatic deletion of a company merely because its annual financial statements have not been published. The company remains registered, and the fines for the manager and the penalties for the company build up for each year.
Which is better: liquidation or selling the shares?
If there is a buyer and the company has no problematic liabilities, selling the shares is usually faster and cheaper. If nobody will take over the company, liquidation is the remaining option.
Who can be the liquidator?
The liquidator can be the owner, the manager or a third party, including someone who lives in Bulgaria. The liquidator is responsible for conducting the procedure properly, so the choice must be made carefully.
Why professional help matters
Liquidation is a formal procedure with many parties involved: the Commercial Register, the NRA, banks, creditors and sometimes employees. When the owner is abroad, every mistake in the documents means another visit to the notary, another apostille and another translation, and a missed stage can block the deletion for months.
As a corporate lawyer in Bulgaria, we will check the company's file and liabilities, tell you which option suits you best and carry out the procedure from start to deletion, keeping you informed at every step. The information in this article is general and does not replace advice on your particular case. Contact Mechkova & Dimitrova Law Firm to close your company in Bulgaria without travelling.
