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 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:
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.
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.
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:
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.
Those of you who have companies registered before 1 Jan 2008 and haven’t done the re-registration, need to hurry. The Commercial Register Act regulates the deadline for re-registration is 31 Dec 2010.
If you fail to re-register on time, your company will be liquidated by the court and official state liquidator will be appointed. The consequence of this will be that your company’s assets will be sold on public tender and the liquidator’s salary will be paid out of that assets.
Don’t miss the deadline! You can loose your property and you will bear liability for all expenses made in court for your company liquidation.
As from 20th October 2009, the minimum capital for registration of limited liability company (LTD) in Bulgaria is 1 Euro. The amendment in the Commercial Act will allow easier and less cumbersome registration of companies in Bulgaria.