How To Close Company in Bulgaria (Liquidation Procedure)
Closing a company in Bulgaria through liquidation is a formal legal process that settles all obligations, transforms assets into cash, pays creditors, distributes any remainder to the owners, and deletes the entity from the Commercial Register. It is different from bankruptcy (insolvency). Liquidation can be voluntary (initiated by the shareholders) or compulsory (ordered by a court or regulator). In 2025, Bulgaria offers both a standard liquidation track and a fast-track/accelerated liquidation for qualifying companies. Understanding the steps and timelines will help you close your business cleanly and avoid unnecessary penalties or rejections.
Standard vs Accelerated Liquidation: Key Differences
Minimum waiting period for creditor claims
- Standard liquidation: A minimum six-month waiting period runs from the date your “invitation to creditors” is published in the Commercial Register.
- Accelerated (fast-track) liquidation: For eligible companies, the waiting period may be shortened to three months after the creditor invitation announcement.
Both tracks still require appointing a liquidator, publishing a creditor invitation, settling liabilities, filing liquidation financials, and requesting deletion from the register. The fast-track simply compresses the statutory waiting window for distributions, cutting weeks or months off the overall schedule.
Step-by-Step: How to Close a Company in Bulgaria
1) Shareholder Resolution to Dissolve and Open Liquidation
- Hold a general meeting (or adopt a written resolution) to dissolve the company and open liquidation.
- Appoint a Liquidator: Name the individual who will represent the company during liquidation. The liquidator replaces the manager for day-to-day legal representation and has the duty to protect creditors and shareholders.
- Define the liquidator’s powers, remuneration and term, and approve who will keep and archive company documents after closure.
2) Register the Liquidation and Liquidator
- File the resolution and supporting documents with the Commercial Register to officially enter the liquidation status and register the liquidator. For background on register procedures and re-registration history, see Process of re-registration of trade companies and How to re-register your company.
- From this moment, the company adds “in liquidation” to its name for all outgoing documents and correspondence.
3) Publish the Invitation to Creditors
- The liquidator publishes an invitation to creditors in the Commercial Register and must also notify known creditors in writing.
- This publication triggers the statutory waiting period:
- Six months under the standard procedure.
- Three months under the accelerated (fast-track) procedure, if applicable.
4) Operational Wind-Down and Compliance
- Stop new commercial activity that is not strictly connected to liquidation. The liquidator may perform only actions necessary to realize receivables, sell assets, pay debts, and finish ongoing operations.
- Tax and payroll: Bring all corporate income tax, VAT returns (if registered), payroll taxes and social contributions up to date. For context, review Income Tax in Bulgaria: Useful Information and Tax Laws (2025) and Employee Leave Rights in Bulgaria (Guide 2025).
- Accounting: Keep full accounting during liquidation, including interim liquidation balance sheets and final liquidation financial statements.
- Contracts: Notify partners of termination/assignment where relevant; close supplier relationships in an orderly manner. If you are a foreign employer with local staff, check Foreign Employer in Bulgaria: All You Need to Know.
5) VAT Deregistration (If Applicable)
- If your company is VAT-registered, file a termination of VAT registration under the VAT Act. For orientation on the VAT framework and current rates, see EU VAT Rates Guide for 2025 and VAT notes inside Top Guide to Company Formation & Opening an Office in Sofia.
- Be aware of final VAT adjustments for assets and inventories held at the date of deregistration (capital goods adjustments may apply).
6) Settle Creditors and Realize Assets
- Collect outstanding receivables, sell movable/immovable assets where needed, and pay all known and admitted creditor claims.
- For disputed claims, provide security or follow court/settlement procedures so that distribution is not blocked.
- If you plan asset or share deals during wind-down, you may want a risk review—see Due Diligence Services in Bulgaria: Guide to Smart Business Decisions.
- If a duly notified creditor does not appear, deposit the amount in a bank account for that creditor as required by law.
7) Prepare Final Liquidation Balance and Distribution Plan
- After the statutory creditor period (six months or three months in fast-track) ends and all liabilities are settled, the liquidator prepares:
- A final liquidation balance sheet and a report on the liquidation.
- A plan for distribution of the remaining property to the shareholders according to their shares and the articles.
- Distribute any remaining funds or assets to owners only after the statutory waiting period elapses and creditor issues are resolved.
8) Archive Corporate Records and Close Operational Matters
- Arrange long-term archiving of accounting and corporate documents as required by Bulgarian law.
- Close bank accounts (after distributions), cancel leases, utilities, and any licenses/registrations that are no longer needed.
9) Apply for Deletion from the Commercial Register
- Submit the final set of documents to the Commercial Register, including the final balance sheet, report, and evidence of distributions, and request the company’s deletion.
- Once the entry is made, the company ceases to exist as a legal entity.
Timeline: How Long Does Company Liquidation Take?
Practical benchmarks in 2025
- Standard procedure: Typically 7–9+ months from start to finish, driven largely by the six-month creditor period plus administrative steps, tax clearances, and final filings.
- Accelerated (fast-track) liquidation: Where eligible, the three-month creditor period may reduce the overall timetable, often bringing completion into the 4–6+ months range, subject to the company’s complexity and readiness.
Lead times depend heavily on how clean your accounting is, how quickly assets can be realized, how soon tax and VAT matters can be reconciled, and whether there are disputed or late-appearing creditor claims.
Costs: What to Budget for
Direct and indirect costs to expect
- Government fees: State fees for filings at the Commercial Register.
- Liquidator remuneration: Either a fixed fee or monthly fee for the liquidator’s work. Historic notes on cost expectations also appear in this register-focused article.
- Professional services: Legal, accounting, and tax support during liquidation; translations and notarizations where required.
- Operational wind-down: Costs to terminate contracts, storage and archiving of records, and closing utilities/leases.
- Tax/VAT adjustments: Potential VAT output on inventories or assets at deregistration; final CIT, payroll and local taxes.
Documents You Will Commonly Need
Core liquidation paperwork
- Shareholder resolution to dissolve and open liquidation, and to appoint the liquidator.
- Liquidator acceptance and specimen signature declarations.
- Evidence of notification to known creditors and the published invitation to creditors.
- Up-to-date financial statements, interim and final liquidation balance sheets.
- Tax and social security clearances or confirmations as requested by the authorities.
- Proof of distributions (and bank deposit slips for non-appearing creditors, if applicable).
Frequent Pitfalls (and How to Avoid Them)
Issues that delay or derail liquidation
- Late or missing creditor invitation: Without it, the statutory waiting period never begins.
- Poor bookkeeping: Incomplete ledgers, unreconciled VAT, or missing payroll filings trigger NRA questions and refusals.
- Unrealistic timelines: Trying to distribute assets before the statutory period expires will be rejected by the register.
- Ignoring VAT deregistration rules: Failing to adjust for inventories or capital goods can create unexpected tax liabilities. See VAT notes inside Company Formation in Bulgaria (Guide 2025).
- Disputed claims: Not providing security on disputed debts blocks distribution and final deletion.
FAQ: Closing a Company in Bulgaria
Can I liquidate a company with debts?
- Yes, but all admitted creditor claims must be settled (or secured if disputed) before distributions to owners and before deletion from the register.
Do I need to travel to Bulgaria?
- Shareholders often act through a power of attorney. However, notarizations/apostilles and original signature requirements may still apply depending on your case.
What happens if a known creditor never replies?
- If duly notified and they do not file a claim, the liquidator may deposit the amount in a bank account for that creditor as the law requires, then proceed to distribution after the statutory period.
What if I never had activity?
- The process still requires a liquidation period (standard minimum six months), but the operational steps are simpler when there are no employees, assets or VAT complications. Planning a new start later? Read Top Guide to Company Formation & Opening an Office in Sofia.
Practical Checklist: Bulgaria Company Liquidation
Use this sequence to stay on track
- Decide to dissolve and open liquidation; appoint liquidator.
- Register liquidation and liquidator in the Commercial Register.
- Publish invitation to creditors; notify known creditors.
- Close operations unrelated to liquidation; maintain full accounting.
- Bring tax, payroll and VAT filings up to date; consider VAT deregistration and adjustments.
- Collect receivables; sell assets where needed; settle creditor claims.
- Prepare final liquidation balance sheet and report.
- Distribute remaining property after the statutory period and creditor settlement.
- Archive records; close accounts and utilities.
- File for deletion at the Commercial Register and obtain final confirmation.
Related Reading from SofiaOffices Blog
Deepen your understanding
- Income Tax in Bulgaria: Useful Information and Tax Laws (2025)
- EU VAT Rates Guide for 2025
- Due Diligence Services in Bulgaria
- Foreign Employer in Bulgaria: All You Need to Know
- Company Formation in Bulgaria (Guide 2025)
- Top Guide to Company Formation & Opening an Office in Sofia
- Process of re-registration of trade companies
- How to re-register your company
- SAF-T in Bulgaria: What It Is and When It’s Required
What can SofiaOffices do for you?
SofiaOffices helps foreign founders and international groups close Bulgarian entities cleanly, quickly and compliantly. We coordinate the entire liquidation lifecycle so you avoid administrative loops and rejections. Our integrated legal-accounting-office support is tailored to non-Bulgarian owners.
- End-to-end liquidation management: Draft shareholder resolutions, appoint and register a liquidator, publish creditor invitations, and prepare the filings for both standard and accelerated liquidation.
- Accounting and tax wrap-up: Close ledgers, prepare interim and final liquidation balances, reconcile corporate income tax, payroll, and manage VAT deregistration and adjustments.
- Creditor handling and distributions: Organize notifications to known creditors, manage claims and disputes, arrange deposits for non-appearing creditors, and handle final distributions to owners.
- Document archiving and formalities: Ensure lawful archiving, close bank accounts and utilities, and compile the complete package for deletion from the Commercial Register.
- Clear English communication: Transparent timelines, fixed-fee options where possible, and proactive reporting tailored to headquarters expectations.
Whether you need the standard track or can qualify for the accelerated option, SofiaOffices turns Bulgarian company liquidation into a predictable project with one responsible team, one checklist, and one goal: close fast, close clean, and move on.
