Closure of a company without activity | Nature and procedures
Ecovis | 17 January 2025
The activity of closing a company with no operations at first glance seems like a difficult task to accomplish. With the right professional and a selection of necessary documents, this process may not be so complicated.
It is important to note that the entire procedure usually takes anywhere from 7 months to over a year. There are two things to consider before undertaking a company closure without activity. During the m. In September 2024, the so-called "fast-track company liquidation procedure" was introduced in the Commercial Law, which will not be discussed in this paper.
First, whether there is an active VAT registration at the time. And secondly, has it ever had any employees working on an employment contract.
To clarify these and other stages in the process of organizing the closure of a company without activity, read the following lines from the article by Ecovis Bulgaria. Learn more about documentation and timelines, right now.
Gathering the most important information and organizing the process are the first steps to closing a company without activity, so let's get started!
What is the process of closing a company without activity?
The closure of a company with no activity is not significantly different from the closure of a company that has an activity. In both cases the process usually takes approximately 7 months.
What distinguishes the activity of closing a company that has been in business is the existence of employees, assets and certain transactions. There may be liabilities or receivables under these.
On the other hand, businesses that have not been in business do not have to file special documents with the NEB such as employment contracts, payrolls, etc.
How do you cease trading as part of a company closure?
Firstly, it is necessary for the supreme body of the company, which may be the sole owner of the capital or the general meeting, to decide to wind up the business. A liquidator is then elected and a corresponding liquidation period, which must be at least 6 months.
A mandatory step of the process is the notification of the dissolution to the NRA. This is done by filing an application under Article 77 of the Tax and Social Security Procedure Code. It matters whether the company is registered for VAT because the period for the NRA to issue the certificate can take up to two months.
From that moment on, the institution carries out the necessary checks on the company. This always happens, whether there are obligations or not. Once the certificate has been issued by the Revenue Agency, it is necessary to declare the liquidation of the company in the Trade Register.
Closure of a company without activity: liquidation stage of the company
After the liquidation has been declared, creditors should be invited to submit their financial claims against the company.
The documents that are necessary for the implementation of an invitation in the TR are:
- Invitation to creditors
- Application for declaration of deeds (D1)
- Declaration as to the genuineness of the circumstances to be recorded and acceptance of the deeds presented for declaration
- Document certifying payment of stamp duty
- Duties of the appointed liquidator
- Power of attorney, if the application is not made by the liquidator
During the liquidation period, the possible liabilities of the company shall be discharged by the liquidator by cashing in the available assets. The remainder shall be distributed among the partners in the form of a share.
If the company is registered for VAT, the liquidator has to submit the de-registration documents to the NRA within two weeks. This period starts from the moment the liquidation is declared.
De-registration for VAT is optional. There is an option in which registration of LLP, can remain active until the date of its deletion in the TR.
For the official closure of a company, an application to the National Social Security Institute under Article 5 of the Social Security Code is required. A payroll book must be prepared if there are employees on an employment contract.
Regardless of whether the company has realised activity or not, the duration of the liquidation is always at least 6 months. The period starts from the date of the notice to creditors.
Removal of a company from the Commercial Register
Once the liquidation period has expired and a certificate has been issued by the NSSI, the company must be deleted from the TR.
In order for this stage to take place the liquidator must prepare a company report. It contains all the actions taken by him during the complete winding up of the company.
The report must be approved by the supreme body of the company and all documents described above must be submitted. In addition, an Application for Entry of Circumstances on Winding-up (B6) is also to be provided.
Who is the liquidator when a company is closed without activity?
In most cases the liquidator is appointed by the manager. However, it is possible that one of the partners or even a third party may step into this role. Not just one person can be appointed liquidator, but several. The condition is that all people represent the company only when they are together.
What happens if the documentation is filed by a lawyer?
If all documents are filed by a legal professional, a lawyer's power of attorney is not required. The B6 application is notarised in this case and so no notarisation fees are payable.
Another advantage with this type of filing is that attorneys use electronic signatures and when the documentation is sent electronically, half the amount of the state fee is saved.