You have a non-operating company and you have decided to close it. The termination of the company’s activity and suspension of insurance payments does not mean a closed company. On the contrary, it continues to exist as a legal entity, continuing to accumulate liabilities. Usually, the owner of a non-operating company stops paying its insurance, on the assumption that “the company is frozen”. At the same time, however, a company’s accounting must continue, even if the company is at a loss. The obligations to prepare and publish annual financial statements also remain. Failure to comply with them leads to serious sanctions, acts and litigation.
To avoid these unpleasant consequences, you can simply liquidate your company. For this purpose, it is necessary to start a liquidation procedure and to appoint a liquidator of the company.
Appointment
A liquidator can only be a natural person. Most often, this is the manager of the company. By decision of the General Meeting, another person may be a liquidator. In case no agreement is reached between the shareholders as to who will be the liquidator, this may be determined by the court at the request of 1/10 of the shareholders. The liquidator may be appointed by an official of the Registry Agency. His remuneration is also determined officially.
After being elected, the liquidator is entered in the Commercial Register and the Non-Profit Legal Entities Register, in order to be disclosed to third parties. After that the liquidator becomes a representative of the company. The rights of the manager are cancelled.
Task and functions
The main task of the liquidator is to close the company. This process lasts at least six months (as provided by the law). Therefore, it is good to rely on a qualified specialist who has sufficient experience in the field.
It is the obligation of the liquidator to notify the NRA of the initiated termination procedure. He must also complete all current transactions that the company has undertaken, i.e. to complete them or to terminate the contracts, if possible. The liquidator may conclude new transactions only if the liquidation procedure so requires.
Another main obligation of the liquidator is to collect all receivables of the company. This means contacting all the company’s debtors or the relevant bailiffs (enforcement agents) in order to fill the company’s coffers. The movable and real property of the company must be converted into money (most often this is done by buying and selling). The creditors of the company are paid with the funds so collected.
The liquidator must draw up an opening and closing balance sheet for the financial status of the company and report to the General Meeting for his actions.
Relations with creditors
Creditors have a special place in the liquidation procedure. The law does not allow the company to be closed without its creditors being notified. That is why each liquidator must publish an invitation to the creditors in the Bulgarian Commercial Register and the Non-Profit Legal Entities Register and notify them in writing of the initiated procedure.
All creditors of the company must claim their receivables within 6 months. If, despite the notification, a creditor fails to present his claim, the amount due is deposited in a bank. The remaining assets are distributed only after all creditors have been satisfied or they have been given collateral for receivables. This is a special protection of the creditors in the liquidation procedure, which is necessitated by the numerous risks associated with the dynamic civil turnover. After the liquidation, the company is not inherited by anyone and, accordingly, it is possible that many creditors will remain unsatisfied if they are not duly informed about the initiated procedure.
Relations with employee
When the liquidation procedure is a fact, the liquidator, as a representative of the company, has the opportunity to terminate all employment contracts with its employees by giving 30 days’ notice for permanent employment contracts or 3 months for fixed-term employment contracts. After all employment contracts have been terminated, the liquidator notifies the NSSI of the initiated procedure and submits all payrolls of the company’s employees to NSSI, upon which a certificate is issued by the NSSI.
Closing
After completing the liquidation procedure and fulfilling all its legal obligations, the liquidator requests the deletion of the company from the Commercial Register and the Non-Profit Legal Entities Register. For more information and specific guidelines how to act in your case, you can contact the competent specialists in our team.
