What is an UNINCORPORATED ASSOCIATION?
Whatever we call it – civil company, DZZD, unincorporated association – we are talking about the same thing. The unincorporated association is also known as a company under the Obligations and Contracts Act. There are a number of differences from commercial companies (Ltd., JSC, etc.) and it gives freedom to the partners, which makes it a flexible form of association. By law, an unincorporated association is created by two or more persons who combine their activities to achieve a common business goal. It is created with a written contract and is registered in the BULSTAT Register. You can read more about the unincorporated association here —> Registration of unincorporated associations.
What are its new responsibilities?
With the start of the new year, new obligations arose for civil companies. Each DZZD is obliged to register for VAT if a partner in the company is a VAT registered entity. The company must complete the registration within 14 days from the date of the contract for the establishment of the unincorporated association. VAT registration is done on site in the territorial department (TD) of the NRA at the company’s headquarters or with an electronic signature electronically. You can find all territorial directorates of the National Revenue Agency HERE.
What should unregistered companies do?
46 of the VAT Act applies to existing cases. It states that civil companies already established but unregistered are obliged to submit an application for registration within one month of the entry into force of the new provisions. This means that the deadline for them is 31 January, 2017. According to the NRA, the new provision will affect about 7,000 existing cases of civil companies (unincorporated associations) in the country.
