Company Liquidation in Bulgaria: Procedure, Stages, Deadlines & Accounting Specifics (Complete Guide)
1. Introduction: What is Company Liquidation?
Liquidation is a legally regulated procedure where a commercial company ceases its business operations, settles its accounts with creditors, distributes the remaining assets among the shareholders, and is permanently deleted from the Commercial Register. It applies when shareholders decide to close down their business voluntarily or in cases prescribed by law.
It is important to distinguish between voluntary liquidation and insolvency (bankruptcy) proceedings:
- Voluntary Liquidation: Initiated by the decision of the shareholders or the sole owner of the capital when the company is solvent and has sufficient assets to cover all its obligations to the state and third parties.
- Insolvency: A court-ordered procedure initiated when a company is insolvent or over-indebted (its assets are insufficient to cover its liabilities).
The voluntary liquidation process is lengthy and requires precise accounting and legal planning. By law, it cannot be completed in less than 6 months, and the actual duration in practice usually ranges between 7 and 9 months. In 2026, the requirements of the NRA, NSSI, and the Commercial Register remain strict, demanding precise adherence to the statutory steps detailed in this guide.
2. Stage 1: Resolution to Dissolve and Appointing a Liquidator
The first step is calling a General Meeting of the shareholders (or a decision by the sole owner of the capital in an EOOD) to dissolve the company and open liquidation proceedings. At this stage, the following decisions are made:
- Dissolution of Operations: The company officially ceases trade and appends “v likvidatsiya” (in liquidation) to its trade name (e.g., “Company” Ltd becomes “Company” Ltd in liquidation).
- Appointing a Liquidator: The liquidator represents the company during the liquidation process. Usually, this is the current manager, but it can be a third party (such as a lawyer or accountant). The liquidator must provide a notarized signature specimen and a declaration of consent.
- Setting the Liquidation Period: The shareholders determine the liquidation period, but the law explicitly states that it cannot be shorter than 6 months from the date the invitation to creditors is published.
After passing the resolution, the company must notify the National Revenue Agency (NRA) under Article 77, Paragraph 1 of the Tax and Social Insurance Procedure Code (TAPC). The NRA issues a certificate of notification within 60 days, which is a mandatory document for registering the liquidation with the Commercial Register.
Upon receiving the NRA certificate, application B6 is submitted to the Commercial Register to record the dissolution, the liquidator’s appointment, and the liquidation timeframe.
3. Stage 2: Invitation to Creditors and the 6-Month Period
Once the dissolution and the liquidator’s details are registered, the next critical step is publishing an invitation to creditors.
The invitation is published in the Commercial Register by submitting application G1. From the publication date, a statutory 6-month waiting period begins, during which all creditors (if any) may claim their debts. During this 6-month period, the liquidator must:
- Collect the company’s receivables from its debtors.
- Liquidate company assets (sell physical property if necessary to pay off debts).
- Satisfy the claims of all verified creditors.
4. Tax and Accounting Obligations during Liquidation
A common mistake among business owners is assuming that a company in liquidation has no accounting obligations. On the contrary, during the liquidation period, the company continues to exist as a legal entity and a taxable subject:
- Liquidation Balance Sheet: As of the date the liquidation starts, the accountant prepares an opening liquidation balance sheet in accordance with SS 13 (Accounting Standard for Liquidation Reporting).
- VAT Reporting: If the company is registered for VAT, it must continue filing monthly VAT returns (by the 14th day of the following month), even with zero values, until it is officially deregistered.
- Corporate Income Tax (CIT): The company continues to file annual corporate tax returns for the period of liquidation.
- Final Tax Period: Before final deletion, a tax return under Article 162 of the CITA must be submitted for the last tax period (from January 1st of the current year to the deletion request date). This must be filed within 30 days of the deletion request.
5. Stage 3: Archiving Payroll Records with the NSSI
Prior to final deletion, the liquidator must terminate all remaining employment contracts. In accordance with the Social Security Code (SSC), all payroll records (ведомости за заплати) and labor agreements of dissolved companies with no legal successor must be handed over to the National Social Security Institute (NSSI / НОИ).
The NSSI verifies the archive and issues a Certificate under Article 5, Paragraph 10 of the SSC. This certificate is mandatory; without it, the Commercial Register will refuse final deletion. Note: Even if the company never hired staff on labor contracts, it must still submit an application to the NSSI and obtain a certificate confirming it has no payroll records to hand over.
6. Distributing the Liquidation Share and Taxation
Once all liabilities to creditors, suppliers, and the state budget (taxes and social contributions) have been settled, the remaining assets and cash are distributed among the shareholders as a liquidation share. The distribution is proportional to each shareholder’s stake in the capital.
Tax Treatment of Liquidation Shares for Individuals in 2026:
- Income from a liquidation share is considered Bulgarian-sourced income under Article 38, Paragraph 4 of PITA.
- The taxable base is the positive difference between the value of the liquidation share and the documented acquisition cost of the company shares.
- Tax Rate: The tax rate on the liquidation share is 5% (and not 10%, which is incorrectly cited in older sources). The tax is final (withheld at source), and the company must declare and pay it via an Article 55 return by the end of the month following the quarter of distribution.
7. Stage 4: Final Deletion from the Commercial Register
After the 6-month creditor period has expired, all debts are paid, payroll records are submitted to the NSSI, and the final liquidation balance sheet is prepared, a final General Meeting is held. The shareholders:
- Approve the liquidator’s final report and the final accounts.
- Pass a resolution to distribute the remaining assets (liquidation shares).
- Release the liquidator from liability.
- Pass a resolution for final deletion.
Application A2 is submitted to the Commercial Register to delete the company, accompanied by the shareholders’ resolution, final balance sheet, NSSI certificate under Art. 5, Para. 10 of the SSC, and liquidator declarations. The registration of deletion terminates the company’s legal existence.
8. Quick Reference Table: Stages of Liquidation
| Stage | Primary Action | Key Documents | Estimated Timeframe |
|---|---|---|---|
| Stage 1 | Resolution to dissolve and notify the NRA | General Meeting minutes, Art. 77 TAPC certificate | 1 – 2 months |
| Stage 2 | Register liquidator and publish invitation to creditors | Applications B6 and G1 in the Commercial Register | 6 months (statutory minimum) |
| Stage 3 | Settle debts, terminate agreements, submit payrolls to NSSI | Art. 5, Para. 10 SSC certificate, Liquidation balance sheet | 1 month (runs parallel to Stage 2) |
| Stage 4 | Final meeting and company deletion | Application A2, Art. 162 CITA declaration | 1 – 2 weeks |
9. Frequently Asked Questions (FAQ)
Q1: Can a company in liquidation perform trade activities?
The purpose of liquidation is to wrap up existing business, not start new ventures. However, the law allows trade transactions if they serve the liquidation’s goals (e.g., selling remaining inventory to pay suppliers).
Q2: How long does liquidation take in total?
Due to the statutory 6-month creditor wait and processing times at the NRA and NSSI, the entire process takes between 7 and 9 months.
Q3: What is the difference between liquidation and insolvency?
Liquidation is voluntary for solvent companies. Insolvency is a court-managed procedure for debt-ridden companies unable to meet financial obligations.
Q4: Who can be appointed as a liquidator?
Usually the current manager, but the shareholders can appoint any adult individual, including an external consultant or lawyer.
Q5: How is the liquidation share of a foreign individual taxed?
The same way – with a 5% final withholding tax in Bulgaria, unless the Double Tax Treaty (DTT) between Bulgaria and their country provides a different rate or regime.
Q6: What are the VAT obligations of a company in liquidation?
The company must file VAT returns monthly. Prior to final deletion, the liquidator submits a VAT deregistration request, and the NRA conducts an audit or check before deregistering the entity.
Q7: Must payroll files be submitted to the NSSI if the company had no staff?
Yes. The company submits an application declaring it has no payroll records (since it had no staff), and the NSSI issues the required certificate for the Commercial Register.
Q8: What are the costs associated with company liquidation?
Costs include state filing fees (for B6, G1, and A2 applications), notary fees for specimens, accounting fees for liquidation balance sheets, and legal fees for document preparation.
10. Conclusion
Company liquidation in Bulgaria is a highly structured procedure requiring close cooperation between a lawyer and an accountant. Mistakes at any stage—from a late VAT return to poorly compiled NSSI files—can delay the process by months and lead to NRA fines.
Our team handles the liquidation process end-to-end: drafting legal documents, accounting under SS 13, representation before the NRA and NSSI, and submitting all filings to the Commercial Register. Contact us for a hassle-free business closure.