Company Liquidation in Bulgaria: how to do it

In addition to understanding how to start a company in Bulgaria, it is equally important to understand how to properly close a company when the business activity comes to an end. This process, known as company liquidation, is regulated by the Bulgarian Commercial Act, which sets out all the legal and procedural requirements for initiating and completing the procedure. The main goal is to ensure that all financial, legal, and tax obligations are fulfilled before the company is permanently deleted from the Commercial Register.

Liquidation begins with a shareholders’ resolution to terminate business activities and the appointment of a liquidator responsible for managing the closure. The minimum duration of the process is six months, during which the liquidator completes ongoing transactions, collects receivables, pays off creditors, and distributes any remaining assets among shareholders. Once these steps are completed and all requirements are met, the company is officially removed from the Commercial Register, ceasing to exist as a legal entity.

Company Liquidation in Bulgaria: branches, subsidiaries, and foundations

While the liquidation of a limited liability company may take up to nine months, closing a branch is a much simpler and faster process. Because a branch has no separate legal personality, it does not go through full liquidation proceedings — filing an application for deregistration with the Commercial Register is sufficient to complete its closure.

The situation is different for subsidiaries, which must follow the same procedure as standard limited liability companies. However, if the parent company has already been dissolved or no longer exists, the liquidation process is initiated by the local public prosecutor, and the liquidator is appointed by the court. This ensures that the subsidiary’s remaining assets and obligations are handled in accordance with Bulgarian law, even without the parent company’s supervision.

The liquidation of a foundation in Bulgaria closely follows the same steps as that of a limited company. It requires similar documentation, notifications, and usually takes a comparable amount of time before the entity is officially removed from the register.

Read also: Hidden Costs of Running a Business in Bulgaria: Guide for Entrepreneurs

Liquidation, insolvency, and freelancer deregistration

It is essential to distinguish between liquidation and insolvency, as these are two separate legal procedures. Liquidation is a voluntary process initiated by the shareholders and aims to close down a business in an orderly manner, primarily protecting the interests of the company itself. Insolvency, by contrast, is a court-driven process that takes place when a company can no longer meet its financial obligations and is designed to protect the interests of creditors.

Both procedures ultimately seek to satisfy creditors, but they differ in purpose and execution. In liquidation, the liquidator sells the company’s assets and distributes the proceeds among creditors and shareholders. In insolvency, the court appoints a trustee (syndic) to manage and distribute the insolvency estate.

For freelancers, the deregistration process is considerably faster. It is a formal step that concludes self-employment activities and usually takes just a few weeks to complete, effectively removing the freelancer from the national business register.

Read also: Annual Financial Statements and Audit in Bulgaria

Timing and strategic considerations

Starting a liquidation procedure in Bulgaria automatically triggers a tax audit by the National Revenue Agency. For this reason, many entrepreneurs prefer to wait up to two years before initiating the process, allowing time to finalize VAT settlements, resolve ongoing audits, or close any pending disputes.

The liquidation process can also be stopped at any time before the company is officially deleted from the register, provided all administrative requirements are properly managed.

Whether you are closing a company, a branch, or a foundation, strategic planning and professional guidance are essential to ensure a compliant and efficient outcome. Working with experienced consultants helps reduce risks, avoid procedural delays, and manage each step with precision and transparency.

For a smooth, accurate, and legally compliant company liquidation in Bulgaria, trust Accountancy Bulgaria, financial advisor in Bulgaria. Our team of experts will assist you through every stage of the process — from document preparation and regulatory filings to the company’s final deregistration — ensuring full compliance with Bulgarian legislation and timely completion. With professional support, you can close your business securely, efficiently, and with complete peace of mind.