The Sole Proprietor is a type of merchant. Any natural person possessing capacity and whose permanent residence is in Bulgaria, including also a foreign citizen, may register as a Sole Proprietor. A person may register only one trade name as a Sole Proprietor. A Sole Proprietor’s trade name should include without abbreviation the person’s given name and either the surname or the patronymic by which he/she is generally known.

The registration of the Sole Proprietor is effected through entering into the Commercial Register with the Registry Agency.

Application and Necessary Documents

A special application needs to be filed with the Commercial Register for the purposes of the registration. There is a standard form for the application – form A1 (Application form for registration of circumstances pertaining to a sole trader). The application needs to contain the name, residence, address and Unified Civil Code (EGN), the trade name under which the activity will be carried out, the seat and the address of management, the scope of activity.

The application may be filed via the Internet as well – by being signed with an electronic signature. For such purposes a lawyer may be authorized – the power of attorney should be explicit but does not require any notarization of the signature.

The following documents should be enclosed to the registration application:

Specimen of the proprietor’s signature;

Declaration by the proprietor that he/she is in compliance with the requirements under Articles 57 and 58 of the Commerce Act;

Declaration on the truthfulness of the stated for registration circumstances and acceptance of the submitted for announcement acts;

Document for paid state fee.

The signature specimen does not need to be notarized.

The provisions of Articles 57 and 58 of the Commerce Act state that a person may not be eligible to register as a Sole Proprietor if he/she:

is in bankruptcy proceedings;

has been bankrupt and his/her rights have not been restored;

has been convicted for bankruptcy;

has been a managing director, a member of a managing or controlling body of a company, dissolved due to bankruptcy, in the last two years prior to the date of the decision to declare bankruptcy, in case there were unsatisfied creditors;

has been a managing director, a member of a managing or controlling body of a company, with regard to which non-performance of obligations to establish and maintain the stock levels, prescribed thereto under the Crude Oil and Petroleum Products Stocks Act, has been established by an effective penal order;

has been deprived of the right to conduct business.

The declaration also needs to include a statement that the person has not registered another trade name as a Sole Proprietor.

State Fee

Pursuant to the Tariff on the State Fees Collected by the Registry Agency, the state fee for registration of a Sole Proprietor is 30 Levs or 15 Levs when the application is filed electronically, including by an authorized lawyer.

Information about the due attorney fee may be found on page Fees.

Additional Information

The entry into the Commercial Register has a declaratory effect. Upon the registration of the Sole Proprietor a new legal person does not come into existence, hence there is no distinction between the natural person as such and his capacity as a Sole Proprietor – only his legal capacity is expanded, meaning that the person is constituted as a merchant and recognized a commercial capacity which enables such person to become a party to commercial legal relations.

The above also means that the natural person-Sole Proprietor will be liable to creditors with all his properties – acquired as a result of both his business activity and transactions carried out in a private person capacity. There isn’t any legal option to limit the risk and liability as this is possible in the case of a limited liability company. This is often the reason for choosing alternative forms, such as the single-person LLC, but still the Sole Proprietor has some advantages, such as lower costs and fees, more relieved procedure and documentation, including the lack of necessity to ensure and pay up founding capital, prompt deletion from the Commercial Register without liquidation, etc.