The sole trader in Bulgaria
In Bulgaria, the sole trader (Bulg. Едноличен Търговец, short: ЕТ) is a legal entity of the Commercial Law of Bulgaria. It is characteristic for the sole trader to be a natural person who obtains a commercial predicate by the law. This is what distinguishes the sole trader from other commercial entities. The entity of the natural person is extended with the registration as a sole trader in the Bulgarian commercial register (BHR). This means that now he carries responsibility for the fulfilment of commitments concerning his commercial activity as well as his activities as a private person. He is liable for all his commitments with his entire property. Nevertheless, there is no new legal subject.
Legal regulations concerning the sole trader in Bulgaria (according to the Commercial Law of Bulgaria)
According to the Commercial Law of Bulgaria (BHG), the sole trader is a person that conducts one of the commercial transactions listed in Article 1 (1) BHG professionally or that founds a business establishment holding nature and extent matching a commercial business establishment.
For the purposes of Article 56 HG, the sole trader is a natural person able to act, having his permanent residence in Bulgaria. Relevant is the location of the permanent residence, not the nationality of the person. Thus, the sole trader must be a “local” natural person.
Legal name of the sole trader
In comparison to other traders, the legal name of the sole trader must include his first and second and if given his father’s name as well.
Registration in the commercial register of Bulgaria (BHR)
The sole trader must add his personnel data and the data related to his establishment as well as a specimen of signature to the request for registration in the commercial register.
Costs for registration in the commercial register of Bulgaria
- Registration of a new sole trader: 35 BGN
- Registration of a new sole trader in electric form: 15 BGN
Transfer and inheritance of the legal name of the company
Furthermore, the legal name of the company may only be transferred in combination with the commercial establishment. To prevent an accumulation of retail businesses under the name of one person, it is supposed by Article 60 (3) HG that in case of a transfer or an inheritance the new owner must add his own name to the legal name. In case of an inheritance, the entire commercial establishment must be taken over by a single inheritor – under these circumstances, the limitation of one - person - one – trader continues to apply. Also the inheritor may only have one company. The transfer of the legal name of the company is only a legal possibility for the new owner to continue to operate the business and not his legal obligation. Besides, the transfer of the legal name may not take place by implication; it has to be agreed expressly.
To prevent the creation of a new legal entity when recording the new sole trader in the commercial register, Article 22 (3) of the Family Code provides that the estate of the sole trader is not a part of the joint property. However, the creditors of the sole trader may access half of the joint property estate.
Liquidation of the company of the sole trader
The record of the sole trader in the commercial register may be deleted in the following cases:
- When the sole trader quits his commercial activities or if he transfers his permanent residence to a foreign country;
- In case of the sole trader’s death;
- In case of incapacitation.
The deletion of the record from the Bulgarian commercial register does not free him from his previous obligations.
Taxes
The sole trader is subject of the Bulgarian corporation tax which takes 15 % of his gains (receipts minus business expenses). Furthermore, he has to make social security payments measured by his receipts.