Lawyer's advice

The mass liquidation of companies in Bulgaria

Milen Hristov — Mon, 12 Jul 2010 12:43:35 +0000

The mid year passed and the deadline for re-registration all Bulgarian companies is fast approaching. January 2011 will become nightmare for company owners who haven’t reregistered. Their companies will be forced into liquidation by the court and the all company assets will be sold on public tenders. Moreover, the court will appoint a liquidator and the company owner will have to pay their monthly salary. IF the company assets are not enough, the company owners will be liable for both company debts and for liquidator’s salary.

Therefore we strongly urge all foreigners who still haven’t reregistered their company to do it as early as possible.

Company registration getting slower

Milen Hristov — Mon, 31 May 2010 16:01:32 +0000

I just wanted to update all who are still to register/re-register their companies. The Commercial Register now is 18 days behind the normal deadline for application processing. As the end of the year comes closer, the company registration will take longer. The solution would be that the Commercial Register to hire more people to process the applications.

British expats in Varna will benefit MHLegal solicitor services

Milen Hristov — Mon, 31 May 2010 07:42:53 +0000

As of 15 June 2010, Varna will benefit from the legal services of solicitor Milen Hristov. The Varna office will be fully operational then. All English speaking clients who need solicitor help regarding company registration,property purchase/sell, visa issues etc. See more details how to find the Varna solicitor office here

Registration of companies: Commercial register overloaded

Milen Hristov — Sun, 16 May 2010 16:12:58 +0000

The registration, re-registration and changes in the files of the companies is delaying again. The reason is that the Commercial register receives more applications than they can handle. The result is one and a half weeks delay in processing the applications. This is valid for all type of applications, no matter if they are for registration, re-registration of companies or just application for filing changes to the companies files. I wonder what will happen in the end of year 2010, when thousands of companies will file their applications at once. The Commercial register will suffer a lot and most probably the business will suffer too. that’s why they need to change their management and hire more employees who will process the applications and the documents. The lawyers will need to explain the situation to their clients, as the deadline for re-registration is coming and this issue will arise.

MHLegal is opening branch office in Varna

Milen Hristov — Sat, 15 May 2010 10:19:44 +0000

We are pleased to announce that as of June 2010, MHlegal will have an office in Varna, Bulgaria. This will ensure easier access to our legal services for the clients residing in Varna and the area around Varna. The contacts will be announced at the day of the official opening.

Court case against Bulgarian developer won by MHLegal

Milen Hristov — Wed, 05 May 2010 07:45:52 +0000

Our law office has initiated more than 10 similar cases against Bulgarian developers. The cases are at different stages and proceed with different speed, depending on the court workload. However last week we got the first court resolution. The court awarded our British client with the amount of EUR 35,000 plus expenses, penalty and interest on the awarded amount.

Another client of ours also claimed his money back (almost 80,000 pounds) and we were at the middle of the court proceedings, when the defendant -developer- agreed to reimburse our client with a finished house at the Black Sea coast (act 16 included). The current market price of the house is estimated to be around 80,000-85,000 pounds)

In both cases above, the clients claimed their money back due to a huge delay in the construction of the purchased off-plan property. If you have similar case, we can help you get your money back. You can contact our law office at the following email address: milen@mhlegal.eu . Just outline your case and provide scanned copies of the relevant documentation.

If you want to know more about the court case process, please read this article

Processing of company re-registration documents

Milen Hristov — Tue, 04 May 2010 14:18:43 +0000

As the deadline for re-registration approaches, the Commercial Register is likely to suffer by greater workload. Still thousands of companies haven’t been re-registered. If they apply in the end of the year it’s likely the clerks in the Register to delay the processing of the documents. Even more, now the company documents are processed for about a week. This is to show that more employees are needed in the Commercial Register administration.

Business clusters in Bulgaria

Milen Hristov — Tue, 27 Apr 2010 15:25:28 +0000

Business clusters have been developing in Bulgaria rapidly during the recent years. The main reason is that there are many small companies and sole traders who cannot stand the competition of the big companies. The small business in Bulgaria is not protected, as the government doesn’t care about family, small and medium enterprises. Although the Bulgarian Small and Medium Enterprises Promotion Agency exist just for the purpose to support the small companies, they virtually do nothing.

Therefore business clusters started to appear. Now there are some major clusters and many small ones. Having in mind that there is no legislative clusters regulation whatsoever, the clusters founders “wraped” the clusters in the existing company/NGO forms, allowed by the Bulgarian law.

The two major business cluster forms are:

non government organization (NGO)
consortium

NGO

NGO registration and activity is regulated by the Law on Non-Profit Legal Entities. A Business cluster can exist as an NGO. The major disadvantage, however, is that NGOs in Bulgaria cannot do business, they can not gain profit. So the main activity of an NGO cluster is to safeguard its members, to urge them, to act as an intermediary between its members and third parties. It also can be holder of intellectual property, it can organize conferences, organize learning courses for qualification and many more. NGOs have certain tax benefits, depending on their

CONSORTIUM

The consortium legal entity is regulated in the Bulgarian Commercial Act. The consortium can be either a Limited Liability Company (or JSC) or Partnership. The difference between the NGO and the consortium is that the consortium can directly trade i.e. it is like an ordinary company. However consortium is used to join economic and fund powers of two or more separate companies. The joining of business powers is the essence of the business clusters.

Registration specifics

Registration process of both the NGO and the Consortium depends on the particular needs of the business partners. Each partner can participate by making money or in-kind contributions (real estate, intellectual property etc.), the shares ratio also can vary. It is crucial that before making a business cluster, the partners know what they want to achieve – what the business cluster main goals will be. Having that figured out, the lawyer will be able to give proper consultation and draft the registration documents in the best way for all partners.

Deadline for filing annual tax accounts

Milen Hristov — Tue, 30 Mar 2010 15:39:53 +0000

Tomorrow, 31 March 2010, is the deadline for filing the annual tax declaration of all companies registered in Bulgaria.
The tax declarations have to be filed in the local office of the National Revenue Agency, in the area where the company is registered. Dormant companies also have to file nil tax declarations.

There is second accountancy obligation of all Bulgarian companies. Pursuant Art. 40 para 1 point 1 of the Accountancy Act a summary of the company accounts must be announced in the Commercial Register with the Registry Agency. A company which does not do that will be fined by the state.

Permanent residence in Bulgaria (EU member state)

Milen Hristov — Tue, 16 Mar 2010 08:17:30 +0000

The Bulgarian Immigration legislation allows foreigners who are not citizens of EU members states to obtain permanent residence directly. The ways to do that is by investing more than 1,000,000 Levs (About 500,000 Euros) or increasing the already made investment with that amount by acquiring:

shares in Bulgarian public listed companies;
financial instruments, issued by the state or the municipalities having their maturity date no less than 6 months;
ownership over a part of assets of Bulgarian company, having at least 50% state ownership, which has become such via the privatisation procedure;
shares, owned by the state or municipality in company, created pursuant the the Privatisation Act;
Bulgarian Intellectual property – items protected by Bulgarian patent, protected inventions, trade marks, industrial design etc.;
rights pursuant to concession agreements over the territory of the state

Another way of obtaining permanent residence in EU (Bulgaria) is to deposit at least 500,000 euros in Bulgarian credit institution(e.g. banks, pension funds etc.) on the grounds of fund management agreement with term no less than 5 years;

The last investment option to obtain permanent residence in Bulgaria (EU) is to invest in Bulgarian private company, at least 3,000,000 Euros.