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Inactive companies in 2018 benefit from a simplified procedure for annual financial closure

21 March 2019

Until 31 March 2019 undertakings which did not carry out business activity in 2018 should declare this circumstance before the Commercial Register.

In general, all companies and non-profit legal entities are obliged to submit their annual financial statements and activity report for the past fiscal year by June 30, 2019.

This obligation, however, does not apply to companies which did not perform any activity during the past reporting period. In order to be considered as inactive, an entity should meet the following cumulative conditions during 2018:

  1. No transactions within the meaning of the Commercial Act have been conducted;
  2. There are no circumstances to acknowledge income pursuant to the Accountancy Act and the applicable accounting standards
  3. No activities relating to investments, production and/or sales have been performed;
  4. No goods and services for the purpose of gaining income and profit have been purchased.

Should the company meet the above cumulative criteria for lack of activity in 2018, it is subject to a simplified procedure and has no obligation to prepare and submit financial statements or activity report. Still, such company shall be obliged to declare the lack of activity before the Commercial Register with the Registry Agency by31 March 2019.

If the declaration for lack of activity is not filed within the specified time, the general obligation to publish annual financial statements remains. Failure to comply with the obligation to publish annual financial statements by June 30 may result in a fine of BGN 200 to 3000.

Please note that regardless of whether the company has performed any activity in 2018 or not,  it is not exempt from the obligation to submit a declaration for statistical purposes before the National Statistical Institute until 30 April 2019.

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