Банкеръ Weekly

Briefs

LOST IN THE COMPANY REGISTER

Is there a place where you can find complete information about a company - such as date of establishment, names of partners and managers, all changes in the capital or in the activity, valid company number (BULSTAT), tax number, etc.? This is a question that keeps agitating journalists, businessmen, buyers, sellers, and more rarely - ordinary people. However, these ordinary people are always curious and willing to know how many companies a public figure owns, whether or not a minister has left the company he used to work for before taking the post and when exactly he left, whom he transferred his stakes, whether or not his companies owe money, and so on.

The only place where all changes referring to companies are registered in time and in full is the trade register at the courts, Ivan Gaydarski, Official Gazette editor-in-chief, commented for the BANKER weekly. It is a public register and one can check up in details the actual condition of each entity registered according to the Bulgarian legislation. In the Unofficial Section where different types of company announcements should be placed the Official Gazette publishes the information within three months after it has been received. However, we often fail to meet this deadline since the number of pages in the section is limited and the law obliges us to give privilege to announcements about liquidations and general meetings of the companies. All this delays the updating of data about the real status of the company and the possible changes in it. In order to utilize the space in the Unofficial Section as much as possible, we also shorten some of the judicial announcements about registrations and changes in the companies. It also affects the private information bases that offer data and inquiries in return to a fee. As it is known, they are entirely dependent on the Official Gazette, because in fact they are its electronic alternative.
According to representatives of these private companies occupied with information services, the company register at the court does not include all possible data about a company, either. It is true that the legal record contains the number of the company case and the single identification number of the firm, but there is not the BULSTAT number which is issued after the registration in court, DAXY information system manager Georgi Krushkov told the BANKER weekly. In turn, neither the Official Gazette nor the court dispose of the tax number which is issued at the National Revenue Agency. Moreover, practice has shown that sometimes the connection between the court and a company gets torn if the company decides to re-register with a new name in another regional court - for example, from the Sofia City Court to the Plovdiv one. In the new register it will be given a brand new number of the company case. Then, the only way to associate the old company with the new one is through the Official Gazette database which keeps the announcement that an X company registered in Sofia is transforming into Y in Plovdiv. There are quite many people who made a series of company re-registrations during the years. Because of the essence of the work I must also suppose that part of these changes aimed at sweeping the tracks.
Krushkov adds that company registers also fail to provide some extra services which are within the resources of the private companies - such as data about people who have become subject to alimony proceedings, etc. Information of this kind is important when a person wants a bank credit, for example, he says. The bank will certainly want to know whether its money is asked for investment or part of it will be used for payment of liabilities. Eventually, I think that if someone seeks complete information about a company and its owners, he should first check in court, then in the BULSTAT register, then in the National Revenue Agency, in the Central Depository (if the company's ownership may be re-distributed through a stock exchange as well) and finally, in the Official Gazette or in a database such as DAXY.
Since the beginning of October, following the adoption of amendments to the Trade Register Act, the Official Gazette will stop supporting its unofficial section and publishing company announcements, Ivan Gaydarski informed. No more announcements about general meetings and liquidations will be published, either. In turn, company owners will have to register the names of their companies once again within two years, this time in the new electronic trade register. This, according to the National Assembly, will help for solving the problem with the so called PO Box companies. Last autumn, when the draft was put forward for public discussion, its creators announced statistical figures revealing that there were between 400,000 and 700,000 dead companies in the country used for tax frauds.
As the DAXY manager says, apart from affecting positively and putting the registration system in order, the forthcoming re-registration will result in more chaos and financial damages to companies which bear one and the same names. There are thousands of such cases, he says. I do not agree that the fairest way is to make the re-registration personally and on the basis of the principle first in time - first in right - which I hear is the solution chosen for the problem. It means that everybody whose company bears a similar or the same name as another one, will have to forget about the name he has already established on the market and invent a new one, if he fails to wake up early enough one day to go to the court first. I wonder how many contracts with foreign companies which are not aware of the special features of the Bulgarian legislation will be reconsidered because of the re-registration and how many of them will be broken. My roughest calculations show that the losses of Bulgarian companies may reach billions of levs. I wouldn't wonder if some of the companies affected try to defend their rights in court.

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