Procedure for declaring the invalidity of commercial companies
Procedure for declaring the invalidity of commercial companies
A commercial company is an association of two or more persons for carrying out commercial transactions with common funds.
A company can also be established by one person. Commercial companies are legal entities.
The types of commercial companies are:
1. the general partnership;
2. the limited partnership;
3. the limited liability company;
4. the joint-stock company;
5. the limited partnership with shares.
The invalidity of commercial companies does not occur by law, it is necessary to be declared in the order of legal action. Any interested party, as well as the prosecutor, may request the district court at the seat of the company to declare the company invalid within one year after the company's creation. The one-year period is exclusive and the claim brought after its expiry is inadmissible. Missing the deadline results in a validly incorporated company regardless of the fact that there is a defect.
The establishment of the company is invalid only when one of the following violations is committed:
- there is no founding agreement or it is not drawn up in the form prescribed by law;
- the subject of the company's activity contradicts the law or good morals;
- the founding agreement or statute does not contain the company, the subject of the company's activity or the amount of contributions, as well as the capital, when required by law;
- the part of the capital prescribed by law has not been paid;
- in the establishment of the company, less than the number of legally capable persons took part.
In cases where the subject of the company's activity contradicts the law or good morals, the founding agreement or the articles of association do not contain the company, the subject of the company's activity or the amount of contributions, as well as the capital, when the law requires it or the part prescribed by law has not been contributed of the capital, the court declares the company invalid only if the violation has not already been remedied or will not be remedied within an appropriate period, which the court shall issue by order.
The decision of the court to declare the company invalid takes effect from its entry into force. From that moment, the company is considered dissolved and the court sends the decision for entry in the commercial register, after which liquidation is carried out by a liquidator appointed by the registration official at the Registration Agency.
When actions are performed on behalf of the declared invalid company, the founders are jointly and severally liable for the obligations undertaken.
Attorney at law Iuila Danova
#3, Dobrotica Str., Varna, Bulgaria
Mob: +359 895 64 59 40
WWW: advokatvarna.com
Email: iulia.danova@abv.bg