Bulgaria Extends Deadline as Closure Looms for 1 Million Firms

The Bulgarian Cabinet has approved draft amendments to extend by 6 months the legal deadline for the campaign to register anew all firms in the country.

Under the Commercial Register Act changes adopted in 2008, all active legal companies in Bulgaria are required to make new registration with the Registry Agency so that inactive and "ghost" firms can be eliminated from the entries.

Less than three months before the deadline about 285 000 firms renewed their registration, in addition to 129 000 others created after the changes were adopted in 2008.

A total of about 900 000 firms, however, have failed to do so. Thus, during its meeting on Wednesday, the Bulgarian Cabinet agreed upon new draft amendments to the Commercial Register Act extending the deadline for re-registration by June 30, 2011.

The issue came in as an emergency submitted by Justice Minister Margarita Popova, and was not originally included in the government's agenda. It is still unclear what mechanism exactly the Bulgarian authorities will employ in order to shut down the hundreds of thousands of inactive firms without jamming the court system.

The registration trends so far have largely confirmed forecasts by experts that only about one-fourth of the firms in Bulgaria are active.