Changes in the Commercial Register Act and the Register of Non-Profit Organizations

The amendments to the Law on the Commercial Register and the Register of Non-Profit Legal Entities (LTRNPO) were promulgated by by the State Gazette, issue 38 of 24.04.2020. The new rules are related to the submission of annual financial statements and annual activity reports. Most of the changes are deferred and will enter into force on 1 January 2022.

State tax

The acts referred to in Art. 3 of the Law on Companies, namely the annual financial statements and the annual report on the activity of the companies, are subject to publication in the Commercial Register. Currently, the Registry Agency collects a state fee of BGN 40 for applications submitted on paper and BGN 20 for applications submitted electronically. After 1 January 2022, this financial burden for businesses will be removed and such state fees will not be due.

Electronic submission of financial statements

Another change that will come into force in 2022 is the introduction of a one-off electronic filing of financial statements. The submission will be made to the Centralised Administrative Information System (CAIS) - Single Entry Point. It will be integrated with the systems of the National Revenue Agency (NRA), the National Statistical Institute (NSI) and the Registry Agency.

This is a positive change which aims to remove unnecessary administrative burdens. Currently, companies are obliged to submit to the Registry Agency some or all of the statements in the annual financial report, which are submitted to both the NSI and the NRA. The annual activity report and the annual financial statements are accompanied by a large set of documents which have to be submitted several times, given the current arrangements. CAIS will allow integration of data from the institutions' systems, introduction of complex administrative services and single submission of documentation.

The current campaign to announce the 2019 annual financial statements.

The next change of major importance will come into force on the day of the promulgation of the changes in the Official Gazette and will affect the applications for annual financial statements submitted so far but not processed by 24 April 2020. The fact that the acts referred to in Art. 38 para. 38(1) of the Accountancy Act have been adopted by the general meeting of the shareholders or by the relevant body of the company shall be certified only by a declaration pursuant to Article 13(4) of the Act on the authenticity of the facts stated and the acceptance of the acts submitted for publication. This means that the regularity of the convening and holding of a general meeting and its decision on the adoption of the annual financial statements and the annual activity report will be certified only by the declaration and not by all the documents that have been required so far - minutes, invitations and proof of return of invitations to convene general meetings, etc.

While this does not exempt companies from their obligations in relation to the regular adoption of annual financial statements and management reports, the change is controversial. On the one hand, it will ease the administrative burden for both companies and the officials of the Registry Agency. On the other hand, however, it runs the risk of misstatement with all its consequences.