Closing a company in Bulgaria is quite difficult and time-consuming, so owners often choose a simpler option – transferring the OOD to another person. Is it possible to get rid of a company this way? Yes, it is, but if the company has any unfulfilled obligations (for example, unpaid loans), there is a risk of complications.
A transaction transferring company shares is governed by Art. 129 of the Commerce Act. Certain difficulties may arise if the company has hired employees. Since 16.02.18, additional requirements have been introduced for the procedure for transferring a partner’s shares in an OOD (LLC) or EOOD (single-member LLC) in order to protect the interests of staff. To enter a share transfer transaction in the Commercial Register, the owner or general director of the company must complete and sign a declaration stating that there are no unpaid salaries, compensations or osigurovki (social and health contributions) owed to the company’s employees. Consequently, if there are debts of this kind, it will not be possible to transfer the company.
At the same time, if the company has accumulated debts to the National Revenue Agency (NAP) for VAT and corporate tax, the company can be transferred, provided, of course, that an interested buyer is found. This does not mean that the transaction carries no hidden risks for the original owner or general director. If the company’s obligations remain unfulfilled after the transfer and the special circumstances specified in Art. 19 of the DOPK are present, the owner or manager may be held liable for the legal entity’s accumulated obligations with their own property. Moreover, personal accounts may be frozen or the owner’s personal car put up for auction even several years after the sale of the company. In addition, the manager may also bear criminal liability under Art. 227b of the NK if it turns out that the director failed to file for bankruptcy within 30 days of the company being declared insolvent. So before carrying out the transaction, you need to consult not only accountants, who often are unaware of such nuances, but also lawyers.
For example, it is known that the law provides for the possibility of transferring a company to a private individual if the company has an unpaid loan. At the same time, not everyone knows that the manager may still face criminal liability under Art. 227b if a report is filed by a creditor or by NAP.
In any case, if a company has any obligations and debts, then before transferring it to another person both the seller and the buyer need to consult both an accountant and a lawyer. This will help avoid unpleasant surprises.
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