The deregistration of a sole trader (ET) from the Commercial Register is a procedure required for various reasons. Most often this occurs when the sole trader dies and none of the heirs wishes to take over the business. In such cases, the heirs must initiate the deregistration process. Other common reasons for deregistering a sole trader are the sole trader’s appointment to a post as a civil servant, retirement, or economic considerations leading to the cessation of the commercial activity.
Particularities of closing a sole trader
The deregistration of a sole trader is carried out without a liquidation procedure. Unlike commercial companies, a sole trader is deregistered under a considerably simplified procedure, requiring only the submission of certain documents and declarations.
Application to the НОИ: The sole trader or their heirs must submit a standard-form application-declaration to the National Social Security Institute (НОИ) for the issuance of the certificate required for handing over the payroll records. If the sole trader had employees, additional documents are also submitted, such as:
- employment contracts,
- orders for the appointment and termination of employment relationships,
- supplementary agreements and requests for unpaid leave, where it exceeded 1 month.
As of 1 January 2018, it is no longer mandatory to notify the National Revenue Agency (НАП) upon the closure of a sole trader, which removes the need for a certificate under Article 77 of the Tax and Social Insurance Procedure Code.
Cancellation of VAT registration
- Upon the death of the sole trader: If the sole trader is registered for VAT, the НАП cancels the registration ex officio. Deregistration from the Commercial Register is irrelevant in this case.
- In other cases: If the sole trader is closed for personal or other reasons, the person must submit an application for VAT deregistration to the НАП within 14 days of the date of deletion.
Documents for registering the deregistration of a sole trader
In order to deregister a sole trader from the Commercial Register, the following documents must be submitted:
- Application А1 – standard form.
- Decision to terminate the activity of the sole trader.
- Certificate under Article 5(10) of the Social Insurance Code, issued by the НОИ.
- Declarations under Article 13(4) and Article 13(5) of the Commercial Register and Register of Non-Profit Legal Entities Act.
- Power of attorney – if the documents are submitted by an authorised person.
- Proof of paid state fee.
Additional documents: If the deregistration is carried out by the heirs of the deceased sole trader, a death certificate and a certificate of heirs should be added.
Fees for registering the deregistration of a sole trader in the Commercial Register
- At the counter: The state fee for registering the deregistration is BGN 30.
- Electronic submission: If the documents are submitted online, the fee is BGN 15.
When the documents are submitted by an attorney, the power of attorney and Application А1 do not need to be notarised, which saves the cost of notarisation. In the case of electronic submission through an attorney, only 50% of the fee is due, i.e. BGN 15.
If you need legal advice or assistance with the deregistration of a sole trader, contact us on 0887550706 or by e-mail: [email protected]
