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Liquidation of Limited Company in Bulgaria

The process of liquidating a Limited Liability Company (Single Limited Liability Company) is a long process that doesn't end for at least 6 months.

Before proceeding with the process of liquidation, the company must be convinced that its accounts are correctly prepared during the years it has existed, and all tax returns, financial reports submitted during the specified legislation deadlines. This is because the liquidation process begins with informing the local Tax Office.


The entire process of liquidation includes two stages - the first stage is closure of the company's activities and the second stage is deletion of the company from the Commercial register. The entire process of liquidation should be carried out by a lawyer and an accountant who need to work in cooperation. The process of liquidation is taking place before the Bulgarian Commercial register.

First stage- Closing activities of the company

The first stage begins with sending a notification to the local Tax Office for starting the liquidation procedure, and obtaining a certificate from the local Tax Office to check if anything is missing or is needed regarding tax obligations at the present time of the notification of liquidation, as there should be no obligations to the Tax Office. When the Tax Office is notified for the liquidation procedure, it is possible a tax audit to the company will be initiated. So, the accountant of the company must complete a tax audit, especially if the company had income.

As soon as the company has obtained such certificate from the Tax Office its lawyer must prepare the legal documentation related to closing the company's activities, and submit the documents in the Commercial register. The submitting of the documents can be done online (via electronic signature); in this case the state fees are reduced with 50%. In the package of documents it should be determined by a liquidator of the company an exact date for deletion of the company from the Commercial register. During the liquidation the company is represented and managed by the liquidator. When starting the liquidation process a notification should be published to all the potential creditors of the company informing them about the started liquidation and allowing them at least 6 months to lodge their claims against the company.

The state fees owed to the Commercial register are a total amount of 35 BGN (without bank commission fee) if the applications are submitted via electronic signature.

It is very important to know that from the date of closing the company's activities, to the date of its deletion from the Commercial register the company is forbidden to make any deals, but its tax obligations to the State remain, i.e. the company must fulfill its obligations related with submitting tax returns, publishing financial reports, etc.

Deletion of the company from the Commercial register

Once the period of 6 months is expired, on the specified Commercial register date the company must submit the second pack of legal and accountancy documents. Also, for the purpose of deletion of the company it is necessary the company be provided with a special Certificate from the local office of the Nation Insurance Agency which should be submitted in the Commercial register together with the legal and accountancy documents.
If the documents are correctly prepared, and if there are no claims from the creditors, the company should be deleted from the commercial register. From the date of its deletion the company has no more obligations to the Tax office and other authorities.

The state fees for deletion due to the Commercial register are on the amount of 15 BGN (without bank commissions) if the application is submitted via electronic signature

Transferring land from the LTD to the foreign physical person - owner of the company

Most of the companies owned by foreign persons have been established only because of the restriction of foreigners to buy land as physical persons. At the moment many of them are asking how they can buy the land as physical person, and close the company. However, although the owner of the company (seller) and the physical person (buyer) are the same person the process of the transfer is linked with the paying of additional expenses.

The transfer of the land from the Limited Liability Company (Single Limited Liability Company) to the physical person must be done through a legal transaction - it could be a sale - purchase, donation, etc. The legal deals should be made before the Notary Public which requires notary fees to be covered.
The donation is the preferred way as it is a lower cost. From the legal point of view there is no problem with the transfer to be done through a donation, but it could be a problem from the tax point of view as the Tax Office could consider the donation as avoiding paying taxes; in that case the taxes are determined as on the base of sale-purchase deal.

If the transfer is made by sale –purchase, the physical person (buyer) must pay a purchase price to the company (seller), although the owner of the company and the buyer of the land is the same. The received purchase price from the company must be accounted as company's profit which requires paying of relevant taxes.

If the property is not transferred to the owner before the liquidation procedure, it should be sold/transferred during the liquidation to third person and the received sum should be distributed as dividend to the owner.

This article is written by "Valova & Angelova" Law firm, Sofia