THE COMPANY REGISTER TO BE DRAWN BACK FROM COURT INDEED
After so many projects, seminars and political statements in the last year and a half, dedicated to the transfer of the company register from court to the Ministry of Justice, it was clear that more was about to happen.The notorious judicial reform in the Bulgarian commercial law that will go on along with the reform in the criminal law will start exactly with the transfer of the yellow company files from regional courts to the Agency for Registration with the Ministry of Justice. The BANKER weekly foresaw it yet on May 24, 2004 in an article entitled The company register to be drawn back from court. However, the beginning of the process was officially announced this week. On a special press conference following the September 14 meeting of the Council for Economic Growth, the Deputy Prime Minister and Minister of Economy Lidiya Shouleva announced the news. In order to make everything look authentic, the Minister of Justice Anton Stankov stood right beside her.The pending transformation was also welcomed by representatives of the Bulgarian Chamber of Commerce and Industry, the Bulgarian Economic Chamber, the Union of Employers in Bulgaria, and the Bulgarian International Business Association (BIBA). Strange enough, just a day before the meeting took place these four organisations released a joint opinion on the issue to the media. They insisted that the Government take radical measures in the field of commercial registration.What eventually became clear at the meeting was that a new working group will be established and will include government experts along with representatives of the employers. Within one month they will have to present a bill on the commercial register to the Council of Ministers. The normative act will describe in details the proceedings for transferring the corporate information now preserved in the courts towards the information files of the justice ministry. The final and transitional regulations of the document are expected to amend a few texts of the Commercial Act, the Civil Procedure Code, the Law on Cooperations, the Law on House-Building Cooperations, and the Law on Non-Profit Legal Entities. Minister Stankov made it clear that the solution of disputes arisen between companies remains within the competence of the court, while his ministry will only take up the so called protective proceedings. Still, it is not clear how the legality of the registrations will be controlled as soon as they are undertaken by the administration. It it also to be decided what term commercial companies will be given in order to re-register themselves. According to legal experts, that will help for screening fly-by-night companies which will be cancelled from the register after the expiration of an established grace period.Minister Stankov also announced that the four corporate registrations needed for the purposes of the new procedure - commercial registration, company ID number, tax registration, and registration at the National Social Security Institute, will be carried out at the same place and companies will be given a single registration number.In fact, the model is not new. The idea for transfer of the commercial register was first presented in Bulgaria in the spring of 2003 by experts of the Centre for the Study of Democracy who studied the experience of Norway. But the project of the non-government organisation met the opposition of Sevdalin Bozhikov, former deputy minister of justice. It is to be noted that the removal of the register from court comes a little later than Bozhikov's dismissal.Less attention was paid to the fact that in the end of April the Council of Ministers ordered a strategy for establishment of a Central Register of Legal Entities and an Electronic Register Centre of the Republic of Bulgaria to be prepared. Moreover, the draft of the strategic document is already finished and is about to be examined by the Government on one of its coming sessions. It covers to a great extent the proposals made by the Centre for the Study of Democracy. The working copy of the strategy proposes that the automation of the available database of legal entities be carried out in several stages. The first of them includes the construction in the Ministry of Justice of a centralised register of all legal entities (except for religious organisations, political parties, and trade-unions), state enterprises, etc. The deadline by which this register will start operations is May 2005.The second stage includes the opening of an Electronic Register Centre, again at the Ministry of Justice. It will unite the information about legal entities and the register of pledges, currently kept by the ministry.Later, the register of legal entities will become linked to the register of motor vehicles, the system for registration of individuals, and the future Central Estate Register, which delay made Bulgaria face troubles with the World Bank.Of course, all this can remain just on paper, if there are problems finding financial resources. It is still not clear whether the 2005 draft budget will provide resources for transfer of the corporate information. According to Minister Stankov, the implementation of the idea will rely on the European Commission, as well as on part of the money from the World Bank PAL3 loan.