NRA seeks to declare insolvent 178 Bulgarian companies indebted to the stateDecember 21 2012, 12:19 Since the start of 2011, Bulgaria’s National Revenue Agency (NRA) has asked the court to declare 178 companies insolvent because of their failure to repay their public debts. The NRA said that the firms had taken no action despite being urged several times to start paying their dues, clearing their obligations either fully or partially.
The number of companies that have allowed matters to get to this point has doubled compared to 2010. The NRA administration reminded the representatives of such businesses that all company assets would be seized and sold off if the court decided that bankruptcy proceedings should be launched. In addition, managers and owners of insolvent companies cannot set up new joint stock companies or become sole traders. If a trader is in no position to service his or her debts and fails to inform the court within 30 days of payment suspension, the punishment is a prison sentence of up to three years and a fine of up to 5000 leva. This is why the NRA recommends that companies in financial distress get in touch with the agency. Tax officials say that firms in trouble can continue to operate even if they are unable to service their debts to the state; for example, any company may request authorisation for urgent payments. It allows the debtor to access some of the funds entering a frozen account and use the money to settle counterparty payments. Typically, companies that owe money use between 10 per cent and 20 per cent of all incoming funds to repay tax or social security debts and the remainder goes into maintaining core business activities