23 February 2011
Recent amendments (in force since the 15th of February, 2011) in the Bulgarian Commerce Act (“CA”) have created new provisions: arts 21 (3) 3, Art. 57(4) and art. 141(8) 8, CA. These introduce stricter requirements for the eligibility of procurators (прокуристи), sole traders and managing directors of private limited companies (LLCs). As a result, one will be ineligible for a procurator, sole trader and managing director of a LLC if he or she was declared bankrupt or was a director, a member of a managing or supervisory body of a company, which was itself dissolved or wound-up due to insolvency in the two years immediately preceding the date of the winding-up judgment, where such an insolvency has left any unsatisfied creditors.
Similar restrictions were already in place for members of the boards of directors, the managing and the supervising boards of joint-stock companies but are now extended to private limited companies and sole traderships.
The recent changes to the Commerce Act were motivated by a desire to clamp down on non-payment of public debts. This was said to be causing losses to the state coffers and had the risk of skewing competition. One way to restrict non-compliance was to penalise individuals supervising such breaches.
Due to the introduction of the new restrictions, the Registry Agency (housing the Bulgarian company register) has announced that declarations for non-existence of the circumstances listed in Art. 21, Para 3, Art. 57, point 4 and Art. 141, Para 8, CA will be required with immediate effect for all new filings. Failure to declare accordingly would most likely lead to a refusal for registration of the filing.
Acting for The Walt Disney Company in a dispute
TWDC is a global media player whose TV channels are distributed, inter alia, to Bulgarian viewers. NBLO assisted TWDC’s London office and TWDC’s English counsel in a dispute with a Bulgarian media sales agent which had withheld substantial sales revenue from our client in breach of contract. The dispute was governed by English law but involved substantial Bulgarian law issues relating to insolvency, civil procedure (including in particular enforcement, interim relief, issues of corporate capacity and private international law.
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