Банкеръ Weekly

Briefs

COMPANY REGISTERS TO BE REMOVED FROM COURT?

The notorious reform in the Bulgarian judiciary system may start with... taking the company registers away from the court. The Ministry of Justice and the Ministry of Finance began consultations on how to find money for implementing the new Law on the Commercial Register, the BANKER weekly learned. The news was announced by Sevdalin Bozhikov, Deputy Mnister of Justice, who took part in a meeting with businessmen in mid-May.Probably, the registers will be moved to a new unit called Central Register. It will unite all the information about companies, jurisitic non-profit entities, real estates, special pledges, and even the tax and the car registers later in the future (if the Chief Tax Directorate and the Traffic Control allow someone to meddle in their business).But this will only be possible, when each of the currently acting registers is centralized. At present, the information is scattered. Later on, all of it will be recorded electronically.Even though this may sound like a fairy tale, the authorities seem quite determined to implement their plans. The other radical change is to replace the court registration of commercial companies with administrative one. In practice, it means that magistrates will not sue the registrations of newly-established companies. The electronic register will make the business easier, the authors of the idea explain. When needed, verifications will be made in a few minutes only. In fact, the project has been developed by the Centre for Study of Democracy. The panel of experts that drafted it included Maria Yordanova, head of the legal programme of the non-profit organisation, Slavi Tchernev, Chairman of the Arbitration Court at the Bulgarian Chamber of Commerce and Industry, and Borislav Balazelkov, judge in the Supreme Court. Stefan Kyuchukov from the Dzhingov, Gouginski, Kyuchukov and Velichkov legal office (which became famous for the attempted privatisation of Bulgartabac) is part of the working group, too. Besides, judges would have time to decide on real disputes instead of wasting their time for registrations. The proposal for making the new administration subordinate to the minister of justice was explained with the efficient functioning of the registers of special pledges and non-profit organisations, kept by the Ministry of Justice. The panel of experts applied the experience of Norway in the field. The Norwegian central register is located in a small town that is quite distant from Oslo. Nevertheless, businessmen in Norway face no problems in the collection of the necessary company information. The same practice is applied by a number of countries in Central and Eastern Europe - Poland, Macedonia, and the Baltic republics. Should the company deeds be removed from court, companies will no longer be able to make informal payments in order to speed up the procedure, the authors of the project say. If registrations are taken by the executive power, white-collar workers will be able to conduct the so-called security procedure. It includes verification of the information subject to registration. (As the BANKER weekly recently announced, a verification of this kind had been skipped when the fantastic capital of MTB Eurocapital was registered.)The project provoked various reactions among businessmen and magistrates.Interference of the court in the company deeds can hardly be avoided. For example, art. 74 of the Commercial Act stipulates that each shareholder is allowed to appeal against decisions made by the general meeting within fourteen days. How will the register, located in the ministry, watch what happens with these claims? Since the court is the one to appoint liquidators and trustees in bankruptcy, why should someone else register them? That's why more difficulties may encounter the documents on their way from the courtroom to the Ministry of Justice. The purely technical transfer of the records will cause trouble, too. According to preliminary forecasts, the Sofia City Court alone will waste six months at least to effect the transfer.The change was officially disapproved by the Bulgarian International Business Association (BIBA), too. Traditions of the Bulgarian commercial law are closely linked to the court, the organisation points out in its stance. According to BIBA's legal experts, the model proposed by the Centre for Study of Democracy is typical for countries such as Great Britain, Northern Ireland, and the USA, whose legal systems are quite different from the Bulgarian one. Instead, investors insist that companies should be impeded from making registrations under the same name in various regions. However, this task can only be fulfilled with the help of computers and high technologies, which are quite scanty in Bulgarian courts. The financial resources are still the biggest problem of the project.

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