Банкеръ Weekly

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SYNDICS ARE OBLIGED TO SIT FOR AN EXAM

Bulgarian syndics are going to sit for an examination just like students applying for university. This is stipulated by Regulation N3 on the selection, qualification and control over the syndics written by experts from the justice, economic and financial ministries. The regulation entered into force on August 5, 2005.Its publishing by the Official Gazette was delayed by a year and nine months, but sticking to deadlines has not been fashionable in Bulgaria since long ago. The minister of justice had at his disposal three months starting June 30, 2003 (when the last significant amendments to the Commercial Act became valid) to create the regulation. However, it was not created until June 27, 2005 and published until a month later.How syndics have been appointed in that lawless period is not clear. But from now on, people who want to exercise that profession already have the rules of the game. According to the regulation, everyone willing to join the closed community of syndics has to sit for an examination and pass it. The exam consists of two parts - a written and a verbal one. The written part is a test. During the exam, applicants are given two envelopes of different size - in the larger one they have to put the answers to the test and in the smaller one - their personal information. The aim is to keep them anonymous during the checking and the assessment of their answers. As in universities, questors are going to monitor the hall during the exam. If someone tries to cheat and is caught, he will be eliminated and his exam will be cancelled. Candidates will be considered successful if they have answered correctly at least two thirds of the questions. The verbal part of the exam is public and is held by an examination committee in the presence of the next five applicants in the list. The exam is announced by an order of the minister of justice which is published by the Official Gazette. That was written in the amendments to the Commercial Act confirmed on second reading by the legal affairs temporary commission on August 3.Access to the exam will be given to applicants with legal or economic degrees. They also need to have at least three years of experience in any of these fields. The law does not allow access to the guild to people who are insolvent debtors or have been sentenced for committing general crimes.Syndics form the only professional community which is obliged by the law to get qualified every year. Their continuing education is coordinated and controlled by the minister of justice in cooperation with the minister of economy. Usually it consists of topical courses on the problems of insolvency. Of course, the education is not free. By January 31 of every year the syndic is obliged to pay a professional qualification instalment amounting to two minimum working salaries in the country. If he fails to do so, he risks to be excluded from the community.Syndics are obliged to get insured against damages they may cause if they do not exercise their duties. The lowest insurance amount is BGN10,000 and for the whole period of the insolvency procedure it is BGN25,000.The actions of the syndics are controlled by the minister of justice. If they commit a violation or fail to do their duties, the minister may deprive them of the right to exercise that profession.The syndic is selected by the first assembly of the creditors of a bankrupt company. Once he takes the post, he represents the company, manages his current affairs, tracks down and specifies its property. He also has a right to terminate, invalidate or cancel contracts signed by the company in question. He cashes down the property and satisfies the creditors' claims by using the collected resources.For his job the syndic is paid a remuneration which is fixed by the creditors' assembly. Sometimes his final reward is calculated as a percentage of the property of the company or of the value of the cashed assets.The syndic may be discharged either by his request or by the request of the creditors who have a right to more than a half of the receivables. The court is allowed to dismiss him if he fails to do his duties or if his actions threaten the interests of the creditor or the debtor.In ancient Greece, a syndic was the name given to the defence in court. Nowadays, syndics again act as defenders but to the creditors of insolvent companies. Bankruptcies have become daily routine in Bulgaria since the 90s. According to information provided by the Ministry of Justice which makes a list of the syndics, their number is about 600. In practice, however, about 30 of them exercise their profession actively.It should be noted that the law allows them to be appointed as syndics in an unlimited number of insolvent companies.

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