Small companies will no longer need to file the general meeting minutes with their financial statements

Who does this change apply to?

The Ministry of Justice proposes amendments to the legislation, specifically to the Ordinance on the keeping, storage of and access to the Commercial Register and the Register of Non-Profit Legal Entities. The proposal will affect the filing of the Annual Financial Statement (AFS) this year.

Only smaller companies will be able to take advantage of the new option. Under the Accountancy Act, these are all enterprises that, as at 31 December of the reporting period, did not exceed at least two of the following indicators:

Value of the assets on the balance sheet – BGN 38 million.
Net sales revenue – BGN 76 million.
Average number of staff during the reporting period – 250 people.
Nothing has changed for large businesses: together with the AFS and the annual activity report, companies will still have to submit documents confirming that the statement and the report were adopted at the organisation’s general meeting.

Reasons for the changes

The report accompanying the amendments to the Ordinance makes it clear that the amendments are also intended for non-profit legal entities. At present, the Registry Agency has to check them, although such legal entities essentially have nothing to do with the financial information in the AFS.

As the Ministry of Justice explains, this practice complicates running a small or medium-sized business. At the same time, it slows down the work of the Registry Agency, since its staff have to check and publish additional documents.

Directive 2013/34/EU of 26.06.2013 on the annual financial statements, consolidated financial statements and related reports does not require the publication of minutes, decisions or other additional documents. For this reason, the requirement to provide documentation confirming the convening and holding of a general meeting will be abolished for small and medium-sized businesses.

Instead of unnecessary paperwork, a single declaration will be filed. It is completed by the legal representative of the legal entity (commercial or non-profit).

The changes will not only make doing business in Bulgaria simpler, but will also reduce the workload of the Registry Agency, which in turn will speed up the processing of financial statements, which currently drags on for years. It will also reduce the number of refusals to process an AFS due to a missing accompanying document.

The changes have another important aim as well. This is a step towards introducing a so-called “single entry point”, i.e. towards ending the filing of statements with both the Registry Agency and the National Statistical Institute (NSI). This is expected to happen in 2022, and by that point all financial statements already filed should have been processed.

According to the Lex.bg website, amendments to the Commercial Register Act are also expected, which will settle the abolition of double filing of statements, but this year priority is being given to the amendments to the Ordinance in order to support small and medium-sized businesses.

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