When using the term merchant the Commerce Act refers to the business owner and when using the term enterprise – to the set of rights, obligations and factual relations which are the legal expression of the business and through which the latter operates. The commercial enterprise is a set of rights, obligations and factual relations arising as a result of the business activity of a company and as such may be transferred.

General Information

Rights include ownership rights and all limited rights in rem over any movable and immovable property, receivables of the company, shareholdings, intellectual property rights, etc. Obligations include all loans and other contractual or non-contractual obligations of the company forming the liabilities of the commercial enterprise. Factual relations include clientele, business contacts with partners, know-how, distribution channels, etc.

The procedure for carrying a transfer of an enterprise into effect is set forth in Art. 15 et seq. of the Commerce Act. The commercial enterprise may be transferred through entering into a sale-purchase contract, as well as through other transactions and methods with translative effect, such as a contract for exchange, donation, in-kind contributions to the capital, etc. Transactions with translative effect are a legal mechanism for transferring the commercial activity, i.e. the business, without the shareholders changing their status (becoming shareholders in another company as in the case of a transformation of companies by merger, for example). The Commerce Act does not explicitly provide for the way the enterprise elements pass from the transferor over to the acquirer – it should be assumed that the rules applicable to the respective elements are to be also applied in the case of transferring an enterprise.

The sale of a commercial enterprise is carried into effect through a contract executed in writing and having the signatures and content thereof notarized simultaneously¹. Such form is a condition for the validity of the contract. The enterprise as a whole may be subject to transferring, as well as an autonomous part thereof. When transferring a part of the commercial enterprise, companies usually keep separate accounting records with regard to the respective activity. It is a similar situation where a company has registered a branch that is later willing to transfer apart from the remaining part of its enterprise.

The Commerce Act puts the transferor under the obligation to notify its creditors and debtors of the effected transfer, as well as provides for a special protection for the creditors of the transferor and the acquirer of the enterprise (joint liability, separate management, etc.).

The transfer of the commercial enterprise is subject to entry into the Commercial Register – the Commerce Act explicitly requires the transfer of the enterprise to be recorded in the Commercial Register simultaneously in the files of both the transferor and the transferee. It is usually recognized that the entry has a declarative effect. When the enterprise subject to transferring includes ownership rights over real estate properties or other rights in rem over such properties, the contract needs to be registered with the respective Registry Office as well.

Application and Necessary Documents

A special application needs to be filed with the Commercial Register for the purposes of the transfer transaction to be registered – a standard form application V1 (В1 in Bulgarian). The application may be filed via the Internet as well – by being signed with an electronic signature. 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.

The following documents need to be enclosed to the application:

Contract for transfer of a commercial enterprise;

Minutes with resolutions under Art. 262o of the Commerce Act (when transferring the commercial enterprise of a company);

Certificate by the NRA under Art. 77 of the TSIPC;

Standard form declaration by the transferor that all due labour remunerations, compensations and social insurance contributions to employees are paid in full²;

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 situations it might be necessary to present other documents as well, such as additional applications and the respective enclosures thereto when simultaneously requesting the deletion of the transferor (in the case of deletion of a Sole Proprietor) or the initial registration of the transferee as a merchant.

Fees and Other Costs

Pursuant to the Tariff on the State Fees Collected by the Registry Agency, the state fee for entering into the Commercial Register a transfer of an enterprise of a Sole Proprietor is 30 Levs or 80 Levs when entering a transfer of an enterprise of any other company. Pursuant to par. 2, when the application is filed electronically, including by an authorized lawyer, the due fee is in the amount of 15 Levs or 40 Levs, respectively.

Additional costs will apply as well, such as notarization fees depending on the particular situation (the amount of the price under the sales contract, whether or not notarization of Minutes is required, etc.), as well as in connection with any additional applications.

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 for each separate case, mostly where the transfer of the enterprise entails certain specifics or when the sale price is relatively high.