Or why you should be careful, really careful of who you assign to be your liquidator

In Bulgaria, when the owner of a company decides to dissolve it, a special liquidation procedure must be initiated. This is the same in most EU jurisdiction by the way. At the start of this procedure, a liquidator must be appointed. Most often than not, the director of the company is also appointed as liquidator. This is of course not always the case, nor is this a requirement. So you are more or less free to appoint anyone to be the liquidator of your company.

But what happens if your first choice of liquidator is like your first love – never to forget, but enough to regret?

The Bulgarian Commercial Law is regulating the liquidation procedure of a company and the liquidator

The Bulgarian commercial law is stipulating what the rights of the General Assembly (or the owner) of the company are. More specifically it states that:

The liquidator of the company shall be the manager unless another person is appointed by the contract or by resolution of the general meeting.

Art. 156, par. 2 of the Bulgarian commercial law

So far so good you will say. It is the general meeting (or the sole shareholder) who decides on who the liquidator is. So what is the problem then? The shareholder(s) can always change the liquidator, at any time. Right? Well, wrong! Because laws need to be complicated, otherwise, we lawyers, won’t be making that much money.

The liquidator, once appointed can’t be changed by the shareholder(s)?

Well, not that it is impossible, but it is extremely difficult. Especially if the appointed liquidator wants to stay, for whatever reason. And there are many reasons for that, all outside the scope of this article. So, according to the Bulgarian commercial law, once the liquidation is started:

The court of the registered office may, for important reasons, appoint or dismiss the liquidator at the request of the partners or shareholders holding 5% (or more) of the capital.

Art. 266, par. 4 of the Bulgarian commercial law

So once the liquidation has started, it is not in the authority of the shareholder(s) to appoint new liquidator. Such change can be done by the court only and this is only if there are important reasons. And the importance of the reasons is something very, very subjective.

Never appoint anyone for liquidator, who you don’t trust for 100%

Appointing a liquidator requires much more trust than appointing the director. While the general manager can be changed by the owner(s) at any time, changing the liquidator is a challenge. We don’t say that we can’t prove to the court the importance of virtually anyone’s reasons to change his liquidator. But this process is time consuming and can prove to be very costly in some cases. Please contact us for any information you might need.

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