In issue 82 of the State Gazette, dated 27.09.2024, the amendments in the Commerce Act voted by the National Assembly on 18th of September, were officially promulgated. The new texts provide the creation of an entirely new procedure called “quick liquidation of traders”.
What requirements must be met by the traders for the application of a quick liquidation?
According to the above-mentioned legal amendments, the quick liquidation procedure will be applicable if your company meets several basic requirements:
– the company has not carried out any activity or stopped carrying out the activity more than 12 months ago;
– the company did not hire workers or employees or terminated their labor contracts more than 12 months ago;
– the company was not registered under the Value Added Tax Act or terminated its VAT registration more than 12 months ago;
– the company has no outstanding debts to the state and municipalities;
– the company has no pending proceedings to establish tax obligations and obligations for mandatory insurance contributions, to which the National Revenue Agency is a party;
– the company is not a defendant in court proceedings, a debtor in enforcement or order proceedings, or has not been enforced against it in accordance with the Special Pledges Act or the Financial Collateral Arrangement Act.
What actions should be taken for initiating a procedure for quick liquidation of a trader?
If your company meets all of the requirements described above, the following actions should be taken to start a procedure for quick liquidation:
– the General Assembly /or the sole owner of the capital/ must adopt explicit decisions for termination of the company and conducting a quick liquidation procedure if the company is AD (JSC), OOD (LLC) or a company with variable capital (CVC);
– there must be unanimous consent of the general partners for termination of the company and conducting a quick liquidation procedure if the company is a general partnership, a limited partnership or a limited stock partnership;
– an application must be submitted to the Registry Agency for termination of the activity of the company and starting a quick liquidation procedure;
– when submitting the application to the Registry Agency, the liquidators must also submit a declaration for meeting the requirements described above.
What happens more quickly in this liquidation compared to the standard liquidation procedure?
There are several circumstances that ensure the speed of this procedure.
The term for creditors to submit their claims after the written notice is published in the Commercial Register is twice as short – 3 months instead of 6 months in the standard liquidation. Or in other words – after the expiry of the 3-month period, the distribution of the company’s assets can be proceeded.
Upon receipt of an application for quick liquidation, the Registry Agency (RA) is obliged to send an electronic notification to the National Revenue Agency (NRA). In turn, the NRA will have 30 days to provide the RA (again electronically) with the information it has on the fulfilment of the requirements set out above.
In the case of initiation of a quick liquidation, the Registry Agency is obliged (upon application of the liquidated company) to immediately notify the National Social Security Institute (NSSI) regarding the issuance of a certificate of delivery of the payrolls within 30 days of the initiation of the quick liquidation procedure, if the company has no outstanding obligations for compulsory social security contributions.
IMPORTANT! The transitional and concluding provisions of the law provide a 1-year term within which the Registry Agency, together with the National Revenue Agency and the National Social Security Institute, should develop mechanisms to ensure the technical applicability of the new legal texts.
All of the above-mentioned circumstances and shortened deadlines should (at least in theory) ensure that the liquidation proceedings will be concluded much more easily and quickly than in the standard procedure. Whether this will factually happen will be known when the quick liquidation procedure starts to be implemented in practice.
In case that you want to liquidate your company, atty. Dilyan Kolev can provide you the necessary legal assistance.