With the recent amendments to the Commercial Code from September 27, 2024 (Official Gazette, issue 82/27.09.2024), a fast liquidation procedure has been introduced. The purpose of this procedure is to allow companies that have not conducted any business in the last 12 months to be liquidated more quickly and easily, as opposed to the “regular” liquidation process, which is lengthy and lasts at least about 8 months. The fast liquidation introduces not only shortened timeframes but also some other procedural simplifications. This will reduce the time required to remove a company from the Commercial register to about 4 months.
Which companies are eligible for Fast Liquidation ?
All commercial companies can benefit from this procedure – All types of commercial companies, including sole proprietorships (ЕООД), limited liability companies (ООД), joint-stock companies (ЕАД, АД), companies with variable capital, as well as general partnerships and limited partnerships, can take advantage of this procedure. However, they must meet several conditions:
- No business activity: They must not have conducted any business or must have ceased their activities more than 12 months ago.
- Employment status: They should not have employed any workers or staff or must have terminated employment relationships with them more than 12 months ago.
- VAT registration: They must not have been registered for VAT or must have terminated their registration more than 12 months ago.
- No outstanding debts: They should not have any unpaid debts to the state and municipalities.
- Tax liabilities: There should not be any ongoing proceedings to determine tax liabilities or obligations for mandatory social security contributions in which the National Revenue Agency is a party.
- No legal proceedings: They must not be defendants in court proceedings, debtors in enforcement or summary proceedings, or subject to enforcement proceedings under the Law on Special Pledges or the Law on Financial Securing Contracts.
How does Fast Liquidation proceed ?
- A significant difference from the standard liquidation process is that for fast liquidation, prior notification to the National Revenue Agency is NOT required. Issuing a certificate under Article 77 of the Tax and Social Insurance Procedure Code is not a mandatory condition for the registration of the liquidation in the Commercial Register.
- To initiate this process, a resolution from the competent authority of the respective company is necessary. The protocol must explicitly state that a fast liquidation process will be conducted.
- A specific set of documents must be submitted to the Commercial Register.
- The liquidation period cannot be shorter than 3 months, starting from the date of the announcement of the invitation to creditors in the Commercial Register, not from the registration of the liquidation.
- Removal of the Company from the Commercial Register: After the liquidation period has expired, creditor claims have been satisfied, and the remaining assets of the company have been distributed, the company can be removed from the Commercial Register.
- Within 30 days from the date of the company’s removal from the Commercial Register, a tax return under Article 162, paragraph 1 of the Corporate Income Tax Act (ЗКПО) for the last tax period must be submitted to the National Revenue Agency.
As long as there are no special rules provided for expedited liquidation, the rules for ordinary liquidation apply.
For assistance with preparing and submitting the necessary documents for Fast liquidation, you can confidently contact our team.
07/01/2025
