Sale of a Commercial Enterprise under Art. 15 of the Bulgarian Commerce Act — Procedure, Notarisation and Tax Treatment (2026)

What is a “commercial enterprise” under Art. 15 CA

Art. 15(1) of the Commerce Act (CA) defines a commercial enterprise as a set of rights, obligations and factual relationships, organisationally and functionally distinct and designed for conducting commercial activity. Elements include:

• Rights — ownership of immovable and movable property, receivables, securities, licences, trademarks, patents, know-how.
• Obligations — towards suppliers, banks, the state, workers.
• Factual relationships — client base, goodwill, business processes, know-how, network.

The enterprise is not a legal entity — it is property belonging to the merchant (sole trader, single-member LLC, LLC, JSC). The merchant remains the same after selling the enterprise; only the enterprise leaves their patrimony. The legal entity transferor may continue its activity with a new enterprise or be liquidated.

When to use Art. 15 CA transfer

Typical scenarios where an asset deal under Art. 15 CA is the preferred form:

• Sale of a sole trader’s enterprise. A sole trader is not a legal entity and has no shares — the only way to transfer the business to another merchant (sole trader or LLC) is via Art. 15 or Art. 60 CA.
• Transition from sole trader to LLC. Many owners “reroll” their business from sole trader to LLC via Art. 15 — the new LLC buys the enterprise and continues the activity.
• Sale of a distinct business segment. When the transferor wishes to keep part of the business while selling another part (a branch, shop, production line).
• Buyer does not want to inherit historical corporate risks. In a share deal the buyer inherits everything including hidden liabilities; in an asset deal — only rights and obligations linked to the enterprise.
• Sale of an “empty” company. Not suitable — Art. 15 CA requires the enterprise to exist.

Difference from transformation (Chapter 16 CA)

Sale of an enterprise differs from transformation (merger, absorption, division, spin-off) under Chapter 16 CA. Transformation is a reorganisation of corporate structures with universal succession. Sale under Art. 15 is a consideration-based transaction with partial succession — only for rights and obligations of the specific enterprise.

Form of the contract — simultaneous notarisation of signatures AND content

Until 2017, Art. 15 CA required only a written form with notarised signatures. Since 1 January 2017 (SG, no. 105/30.12.2016), the law requires simultaneous notarisation of signatures and content. The aim — to prevent misuse of blank forms and backdated contracts.

What “simultaneous” means

The notary:

1. Verifies the identity of the parties or their representatives.
2. Reviews the representatives’ authority (notarised power of attorney).
3. Certifies the signatures on the contract.
4. Certifies the content of the contract — retaining the original in the notary’s deed book.
5. Both certifications are entered simultaneously into the notary’s book.

If certifications are made at different times or by different notaries, the contract is null. This is a material change from prior practice.

State fee

The notary fee follows the Notary Fees Tariff — proportional to the material interest (the enterprise’s price), capped around EUR 3,000–5,000 for large deals. For contracts up to EUR 50,000, the fee is usually EUR 200–400.

Contract content

Mandatory elements of the enterprise sale contract:

1. Parties. Identification of transferor and successor — UIC, name, seat, representatives.
2. Subject. Identification of the enterprise (e.g. commercial enterprise of “X” ЕООД), including limitations (if a distinct part is being sold).
3. Included assets and liabilities. Annex with a list of:
   • Immovable property (address, cadastral ID, area);
   • Movable assets and equipment (inventory);
   • Client receivables (debtors and amounts);
   • Cash and bank balances;
   • Intellectual property (patents, marks, copyrights);
   • Contracts (suppliers, landlords, customers);
   • Employment relationships (staff list);
   • Liabilities to suppliers, banks, the state.
4. Price and payment terms. Lump-sum, instalments, escrow.
5. Transfer date — usually the date of Commercial Register entry.
6. Warranties and indemnities from the transferor as to truthfulness of data provided.
7. Non-compete — advisable to prevent the transferor from opening a competing business.
8. Allocation of responsibilities before and after transfer.
9. Permits and consents — when required (monopolies, licences).

Commercial Register and Real Estate Register

Commercial Register (Registry Agency)

The transfer is entered simultaneously on the files of the transferor and successor in the Commercial Register at the Registry Agency. Deadline: 7 days from the contract (Art. 4 and 6 of the Commercial Register Act).

Documents required for the application (form Б6):

• Contract with notarised signatures and content (original);
• Declarations under Art. 13 of the Commercial Register Act;
• Proof of payment of state fee (EUR 15 per file);
• Worker consent upon transfer of employment contracts (Art. 123 Labour Code).

Real Estate Register

If the enterprise includes immovable property, the contract is also entered in the Real Estate Register at the Registry Agency. This entry has constitutive effect for the transfer of ownership in immovable property. The fee is 0.1% of the property value.

Other registers

If the enterprise includes:

• Motor vehicles — re-registration with the traffic authorities;
• Ships and aircraft — in the relevant registers;
• Trademarks, patents, designs — at the Patent Office.

Notification of creditors and debtors

Art. 15(1) CA requires the transferor to notify creditors and debtors of the transfer. The law does not prescribe form, but recommended methods are:

• Registered letter with return receipt — most common, creates a delivery record.
• Notarial notice — for material or disputed relationships, for definitive evidence of receipt.
• Email with confirmation — for clients with pre-agreed electronic communication.

Significance of notification

• For debtors: until notification, payment to the transferor is valid (Art. 75(2) Obligations and Contracts Act). After notification — payment to the transferor does not discharge the debtor.
• For creditors: without notification, they can seek performance from the transferor. After notification — they may choose between transferor and successor (joint liability).

No specific deadline is prescribed, but within 30 days of Commercial Register entry is advisable.

Joint liability of the transferor (Art. 15(3) CA)

Central protection for creditors. Paragraph 3: “Unless otherwise agreed with creditors, the transferor is jointly liable with the successor for liabilities up to the value of rights received.”

Key elements

• Joint — the creditor may seek full performance from either party.
• Up to value of rights received — the seller is liable only up to the consideration received (cap).
• Protective for creditors — they cannot lose through the transfer.
• May be negotiated separately — with written consent of a specific creditor to release the transferor.

Art. 16(2) CA — 6 months of separate management

A specific safeguard: if the successor fails to perform liabilities arising before the transfer, creditors are entitled to enforce against the enterprise’s segregated assets, separately from the successor’s remaining assets. The period is 6 months from Commercial Register entry. It requires separate accounting of the acquired enterprise during this period.

VAT treatment — out of scope (Art. 10 VATA)

One of the main advantages of Art. 15 CA sale over a sale of individual assets: no VAT is charged. The basis is Art. 10(1)(1) of the Bulgarian VAT Act (VATA), which excludes from “supply”:

“Transfer of an enterprise under Art. 15 or Art. 60 CA.”

Consequences

• VAT is not charged on the price.
• The seller is not required to adjust input VAT deducted on the assets (Art. 79(8) VATA).
• The buyer steps into the seller’s rights and obligations for VAT purposes, including the right to input VAT on future supplies linked to the enterprise.
• No tax invoice is issued for the transfer — the contract is sufficient.

Exception: transfer of individual assets outside the enterprise scope remains taxable under VAT rules.

CITA and PITA treatment

Unlike transformation (Chapter 19 CITA), sale under Art. 15 CA is treated under the general rules for realised income and expenses.

Sole trader (ЕТ) seller

Income from the sale is taxed as business income of the merchant under Art. 26 PITA:

• Accounting profit — difference between sale price and balance-sheet value of assets and liabilities.
• Rate 15% on annual taxable profit.
• Declared in Art. 50 PITA return by 30 June of the following year.

ЕООД/ООД seller

• Sale proceeds form taxable financial result under CITA.
• Difference between sale price and balance-sheet value is included in profit.
• Rate 10% corporate tax.
• Distributed as dividend to the owner — further 5%.

Buyer

• Acquired assets are booked at purchase price (actual consideration).
• If this exceeds the balance-sheet value of the assets, the difference is goodwill — amortised over 10 years (Art. 55(1) CITA).
• Tax depreciation of acquired fixed assets starts from zero.
• Carry-forward of the seller’s tax losses is not possible — unlike transformation.

Practical example

An ЕООД sells its enterprise to another ЕООД for EUR 500,000. Balance-sheet value of assets less liabilities — EUR 300,000. Financial result — EUR 200,000.

• Corporate tax 10%: EUR 20,000.
• Remaining profit: EUR 180,000.
• If distributed as dividend: EUR 9,000 (5%).
• Net to owner: EUR 171,000.
• Overall burden: 14.5% on realised profit (at full distribution).

Employment relationships — Art. 123 Labour Code

Upon transfer of an enterprise, employment relationships pass automatically to the successor (Art. 123(1)(5) LC) — Directive 2001/23/EC on safeguarding employees’ rights. Rules:

• The successor inherits all terms of the employment contract (salary, position, leave, service).
• The worker may refuse the transfer and terminate with 30-day notice.
• Transferor and successor must inform employees and their representatives reasonably before the transfer.
• Joint liability of transferor and successor for pre-transfer obligations (Art. 123(2) LC) — wages, compensations, social contributions.

Asset deal vs. Share deal comparison

Overall: asset deal is cleaner for the buyer (fewer historical risks) but more procedurally complex. Share deal is simpler but carries higher due-diligence risk.

Common mistakes in Art. 15 CA transfers

1. Signature and content certifications at different times. Renders the contract null — must be simultaneous.
2. Incomplete list of assets and liabilities. Leads to disputes and claims from omitted creditors.
3. Failure to register in the Real Estate Register. For immovable property, ownership does not pass without registration.
4. Failing to inform employees. Violates Art. 123 LC; sanction from the Labour Inspectorate.
5. No creditor notification. Seller remains liable; buyer lacks legitimation.
6. Ignoring Art. 16(2) CA. Failure to conduct 6-month separate management may lead to challenges from creditors.
7. Wrong tax treatment. Applying the transformation regime (Chapter 19 CITA) instead of general rules — leads to an incorrect tax return.
8. Overlooking counterparty consent. Customer/supplier contracts don’t transfer automatically — clauses on change of control or intuitu personae require consents.

Commerce Act text at lex.bg. Electronic Commercial Register services at portal.registryagency.bg.

Frequently asked questions