Recent amendments in the Commerce Act restrict eligibility for directorship

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.


Recent work:

Logica plc, now part of CGI, a consultancy & outsourcing business

NBLO has provided broad support to Logica’s CEE regional head office, including on the validity of certain commercial agreements and proposed agreements and on effecting various company secretarial actions. Our commercial work for this client is representative of our time-sensitive non-contentious practice. The firm’s emphasis on an integrated cross-jurisdictional approach and dual-qualified staff have also proven valuable in dealing with the need for valid certification by senior UK-based directors and the resignation of other UK-based individual directors who were no longer available and/or willing to execute documentation.

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