The registration of a pawnshop is mandatory for persons who plan to offer loans against the pledge of movable property. For this purpose, a limited liability company is usually set up (an EOOD or OOD), and the law does not require any minimum capital. It is even possible for the company to be registered with capital of just BGN 2.

Specific requirements for pawnshops

A company registered as a pawnshop is entitled to carry out solely the activity of lending money against the pledge of property. Its scope is limited to this core activity, which excludes the possibility of developing other commercial activities, unless they are directly connected with the provision of loans against pledge. For this reason, if you plan to carry on another commercial activity in parallel, it is important not to include it in the same company.

Pawnshops are subject to specific statutory requirements, which cover:

  • A cap on the interest rate.
  • Requirements for the safekeeping of pledged items and the issuing of pawn tickets.
  • Specific requirements regarding fire safety, alarm systems and monitored security response (СОТ).

Pawnshops fall within the provisions of the Measures Against Money Laundering Act, which entails compliance with strict procedures and transparency requirements.

Company name and scope of activity

The company name must, without fail, contain the term „заложна къща“ (pawnshop). In addition, it is important that the scope of activity be precisely defined and described, in order to avoid problems with future entries in the register maintained by the Ministry of Finance.

Documents for registering a pawnshop in the Commercial Register

When registering a pawnshop in the Commercial Register, the following documents are required:

  1. Founding act for an EOOD or Articles of Association for an OOD – containing the necessary particulars, with any personal data other than that required by law being redacted.
  2. Minutes of the founding meeting.
  3. A specimen of the manager's signature.
  4. A declaration by the manager under Article 141(8) of the Commerce Act.
  5. A declaration by the manager under Article 5 of the Ordinance on the Activity of Pawnshops.
  6. A criminal record certificate for the manager.
  7. A bank document evidencing the paid-in capital.
  8. A lawyer's power of attorney, if the documents are filed by a lawyer.
  9. Declarations under Article 13(4) and (5) of the Commercial Register and Register of Non-Profit Legal Entities Act.
  10. A payment order for the paid state fee for registration.

Where the body of partners includes another commercial company, a resolution of its competent body approving participation in the incorporation of the new company (OOD) is also required.

State fees and filing of documents

For registration in the Commercial Register, the state fee is BGN 110 for filing on paper and BGN 55 for electronic filing.

Registration in the public register of the Ministry of the Economy

After entry in the Commercial Register, the pawnshop must also be registered in the public register maintained by the Ministry of the Economy, where all persons dealing in precious metals and precious stones are recorded. It is important that the application for registration be filed at least 14 days before the actual commencement of activity.

The documents required for registration with the Ministry of the Economy include:

  1. A standard-form application.
  2. A copy of the identity card or a declaration of the data therein (for obtaining a criminal record certificate ex officio).
  3. A document of ownership or a lease agreement for the premises in which the activity is to be carried out, stating the exact address.
  4. Other documents depending on the particular case.
  5. A notarised power of attorney, if the documents are filed by an authorised representative. If the application is filed by a lawyer, no certification is required.
  6. A payment order for the paid state fee.
State fee and time limits for registration

The state fee for entry in the public register of the Ministry of the Economy is BGN 200. For each additional site or person, a fee of BGN 20 is payable. The entry is made within 14 days of the filing of the application and all the necessary documents.

Following registration, the Ministry of the Economy issues a certificate of registration, which must be displayed in a prominent place in the pawnshop. In the event that the certificate is lost or destroyed, no duplicate is issued. To restore the certificate, the pawnshop must go through the entire registration procedure again and obtain a new certificate.

If you need advice and assistance with registering a pawnshop, contact us on telephone 0887550706 or by e-mail: [email protected]