The registration of a sole trader (ET) grants a natural person the right to carry out commercial activity, thereby acquiring the status of a trader. It is important to note that a sole trader is not a legal entity, even though it is registered in the Commercial Register.

Key Characteristics and Liabilities of a Sole Trader

One of the significant disadvantages of registering as a sole trader is unlimited liability for its obligations. This means that the trader is liable both with the property included in its enterprise as a sole trader and with its personal property and matrimonial community of property. Unlike a sole trader, in an EOOD (a sole-owner limited liability company) liability is limited, and creditors have no right to dispose of the personal or family property.

Registration as a sole trader is preferred when carrying out activities subject to the patent tax. However, it is important to seek prior advice from an attorney and an accountant in order to assess whether registration as a sole trader or as an EOOD is more appropriate, since the amount of the patent tax may exceed the corporate tax of an EOOD.

Requirements for Registering a Sole Trader

In order to register as a sole trader, a natural person must meet the following conditions:

  • Have legal capacity, i.e. have reached 18 years of age and not be placed under judicial disability.
  • Have their place of residence in Bulgaria.
  • Foreign nationals may register a sole trader if they hold a permanent residence permit in the country.

A person is entitled to register only one trade name as a sole trader.

The trade name of the sole trader must necessarily include the person's given name and surname without abbreviations. If the person is known by their patronymic, they may use it instead of the surname. If a trade name with the same name already exists, distinguishing elements are added, for example a year or another distinctive designation.

Documents for Registering a Sole Trader

The following documents are required in order to register a sole trader in the Commercial Register:

  1. An application, form А1.
  2. A notarised specimen signature.
  3. A declaration under Article 57 and Article 58 of the Commerce Act (ТЗ).
  4. A declaration under Article 13, paragraph 4 of the Act on the Commercial Register and the Register of Non-Profit Legal Entities (ЗТРРЮЛНЦ).
  5. A declaration under Article 13, paragraph 5 of the Act on the Commercial Register and the Register of Non-Profit Legal Entities (if the documents are filed by an authorised representative).
  6. A power of attorney (if the documents are filed by an authorised representative).
  7. A document evidencing payment of the state fee.
State Fee for Registration

The state fee for registering a sole trader is BGN 30. If the documents are filed by an attorney, notarisation of the attorney's power of attorney and of application forms В1 and А1 is not required. Where the documents are filed electronically with an electronic signature, the state fee is reduced by 50%.

If you need legal advice or assistance with the registration, transfer or deregistration of a sole trader, contact us on tel.: 0887550706 or by e-mail: [email protected]