Pursuant to Art. 53, par. 3 of the Commerce Act companies are required to summarize the results of their business based on their bookkeeping and inventory records by preparing annual financial statements (AFS). The financial statements must give a true and fair picture of the property and the financial status and performance of the enterprise, its cash flows and equity.
Every enterprise is put by the Accountancy Act under the obligation to prepare AFS as of December 31 of each calendar year. The annual financial statements need to be drawn up on the basis of the International Accounting Standards or the National Accounting Standards – depending on the category they belong to (for example, whether the enterprise is of public interest or a micro/small one). The AFS for all enterprises should consist of at least a balance sheet, a profit and loss statement and notes; the form, structure and content of the full set of the financial statements are determined by the applicable accounting standards.
The annual financial statements of companies are subject to publication – by being submitted for announcement in the Commercial Register. Announcement is aimed at making companies’ AFS public and accessible to all interested parties. Ensuring publicity aims at the general protection of day-to-day business operations, as well as at the individual protection of the shareholders and creditors of the respective companies. By accessing the financial statements all interested parties are enabled to receive a true and fair picture of the financial status of the enterprise.
All companies must submit their AFS for announcement not later than June 30 of the following year.
Whoever is required and fails to publish financial statements within the time limits under Art. 38 of the Accountancy Act1 is to be sanctioned by a fine ranging from 200 to 3000 Levs, and the enterprise is to be punished by a property sanction ranging from 0.1 to 0.5 per cent of the net sales revenue for the reporting period for which the unpublished financial statements refer, but not less than 200 Levs. By July 31 of the current year the Registry Agency provides electronically to the National Revenue Agency a list of the enterprises which have failed to publish their annual financial statements for the previous year within the prescribed time limits; by September 30 of the current year the National Revenue Agency undertakes the necessary measures for performing audits and establishing violations.
The obligation for submitting the AFS for announcement does not apply to: Sole Proprietors not subject to statutory independent financial audit; companies which haven’t been carrying out activity during the reporting period – that needs to be declared once for the first reporting period in which no activity was carried out – with a declaration in the form approved by an order of the Minister of Finance2 to be published in the Commercial Register not later than March 31 of the following year.
Application and Necessary Documents
A special application needs to be filed with the Commercial Register for the publication of the AFS – standard form application G2. Form G33 application should be used when requesting publication of a declaration for no activity having been carried out during the reporting period.
The applications may be filed electronically (via the Internet) as well – by being signed with an electronic signature. They should be submitted by the company’s representative (director, executive officer, etc.). A lawyer may be authorized for such purposes as well – the power of attorney should be explicit but does not require any notarization of the signature.
Besides the financial statements themselves the following documents also need to be enclosed to the application:
Declaration (in the approved form) on the acceptance of the annual financial statements and the annual activity report for the enterprises pursuant to Art. 19, par. 1, it. 1-3 of the Accountancy Act4;
Declaration on the truthfulness of the stated for registration circumstances and acceptance of the submitted for announcement acts;
Document for paid state fee.
In certain cases other documents might be necessary as well, such as an audit report and/or documents evidencing the proper acceptance of the annual financial statements and the annual activity report (such as invitations for calling the General Meeting and Minutes with resolutions of the General Meeting – such documents are needed in the case of large undertakings and undertakings of public interest).
Pursuant to Art. 16b, par. 1 of the Tariff on the State Fees Collected by the Registry Agency, the state fee for publishing deeds in the Commercial Register is 40 Levs. Pursuant to par. 2, when the application is filed electronically, including by an authorized to that end lawyer, the due fee would be in the amount of 20 Levs.
No fee is due for the publication of a declaration for lack of any activity during the respective reporting period.
Information about the due attorney fee may be found on page Fees. Please, note that the published information is for reference purposes only – I reserve the right to negotiate a different amount of the fee (including a lower fee – for example, when the requested service covers only submission of the respective documents to the Commercial Register).
1 The article has been updated on 20.01.2016 in connection with the new Accountancy Act (effective as of 01.01.2016) – see the law on the website of the State Gazette.
2 The article has been updated on 26.01.2020 in connection with an amendment to Art. 38, par. 9, it. 2 of the Accountancy Act (effective as of 01.01.2020).
3 The article has been updated on 30.10.2018 in connection with amendments to Ordinance No. 1 of 14.02.2007 for administration, keeping of and access to the Commercial Register (effective as of 23.10.2018).
4 The article has been updated on 27.03.2020 in connection with an amendment to Art. 62a, par. 2, it. 2 of Ordinance No. 1 of 14.02.2007 for administration, keeping of and access to the Commercial Register (effective as of 14.03.2020).