Company registration
Company registration
Question:
Hello!
In the last year my business has grown and I want to register a company and trade through it. I resell vintage watches and pens, mostly online, but sometimes do live deals as well. What next steps should I take?
Thanks in advance!
Answer:
Hello,
In order to register a Company in your name, a set of documents must be submitted to the Commercial Register - articles of incorporation, minutes of a general meeting, several declarations, a note for paid state tax, a sample signature certified by a notary and an import note for the initial capital paid in. You will receive the import note after opening a collection account in a bank of your choice. You can only deposit the initial capital of the Company into this account. After the company is registered, this account must be closed and eventually, if you need, you can open a current account in the name of the company.
The prepared set of documents is entered into the Commercial Register in person by you, electronically with your electronic signature or through an authorized lawyer. Total discovery costs are:
- state fee between BGN 55.00 and BGN 110.00, depending on the method of entry of the documents
- notary fee BGN 6.00
- bank fee - depending on the bank between BGN 20.00 and BGN 100.00.
You also need to have the amount you set as seed capital to put into the fundraising account. Upon closing this account, the amount is returned to you.
Within 7 days after the entry of the documents, the Commercial Register issues a decision to register or refuse to register the Company.
After the registration is already a fact, the following things must happen:
1. To decide from which date you will start activity and, accordingly, when starting activity, to submit a declaration to the National Revenue Agency for this. When starting an activity, there is also an obligation to insure yourself as the owner and manager of the company. This obligation will disappear if you are already self-insured on some other basis or if you are already insured on the maximum monthly income (BGN 3400.00 as of today).
2. To determine whether your activity will not require VAT registration. There are many cases in which a company may be subject to VAT registration, but especially in your business we can reduce them to the following:
- reach the obo of BGN 100,000 in sales with a place of performance in the territory of Bulgaria for the last 12 months (for a new company, this will not be immediately applicable, but it is important to know, because with the development of your business, if it is enough successful, you may reach this turnover quickly.
- receiving services from legal entities that are not established on the territory of Bulgaria - you mention that you sell your goods online. If you use any online platform that is not owned by a Bulgarian company (Amazon, Shopify, Etsy, etc.), you are provided with the service of listing your goods on the respective platform, for which you are charged a commission from each sale. Another option is if you use paid advertising, such as Google Adds or through Facebook.
- reaching a turnover of 20,000 euros of intra-community supplies - such supplies are the purchase of goods from companies that are outside Bulgaria but are located in a member state of the European Union (there are also exceptions related to trade in second-hand goods and antique goods ).
- reaching a turnover of 10,000 euros in sales to individuals outside Bulgaria, but located in a member state of the European Union.
3. If in your business you accept cash payments or other payments requiring the issuance of a receipt (in-person payments through a POS device, receiving payments in a payment system that is not on the BNB lists), then you will need to get a cash register.
These are the basic steps with which your business starts.
Regarding taxes and insurance - we have already mentioned that for the period in which the company operates you will owe insurance contributions. They will amount to a minimum of BGN 200.00 per month (calculated on the basis of the minimum insurance income at the moment). In addition, at the end of the year you will also owe 10% tax on the realized profit. If you wish to take the company's profit as personal income (as the owner of the company), you will also have to pay an additional 5% dividend tax. Depending on whether your Company will be subject to VAT registration at any given time, you will also owe VAT. It is different for different regimes, but the basic rate is 20% on realized sales.
We hope we have been helpful!
Greetings!
