Payment of a company share to a deceased partner in OOD
Payment of a company share to a deceased partner in OOD
Question:
Hello,
My question is about paying a company share to a deceased manager in OOD. Can the heir claim a deduction from the liability in the balance sheet (which was made one month before it dies) of liabilities that have been extinguished?
Thanks in advance!
Answer:
Hello,
In accordance with the provisions of Art. 125, para. 3 of the Commerce Act, the material consequences for a partner that terminated its participation in the company shall be settled through an accounting balance sheet at the end of the month during which the termination of the participation occurred. The leaving partner (the deceased) is entitled to a share which may differ from the share in the share capital of the company. The shareholding may be higher due to increased profits and reserves of the company or may be smaller as a result of realized losses. In calculating the share of the leaving partner (the deceased), the equity of the company at the time of the departure of the partner is taken as the basis. If certain obligations were extinguished, they should be written off from the liability at the expense of accrued provisions or accrued other income. Generally, equity is equal to the assets of the company less its liabilities. The calculation of the share of the leaving partner (deceased) is carried out by dividing the equity by the number of shares of the partners and forming the amount to be paid to the leaving partner (deceased). It is possible to use the ratio of the company's equity to the share capital on the balance sheet at the end of the month of departure in determining the share of the leaving (deceased) partner. The share of the leaving (deceased) partner in the share capital should be adjusted with the relative share received. The result of this adjustment is the share of the departing (deceased) partner. It is mandatory to monitor the payment of the share of the departing (deceased) partner whether the share capital will be reduced below the required minimum under the Commercial Law. Provided that the amount paid to the leaving (deceased) partner will lead to a decrease in the share capital at the registration of the company below the required minimum, it is possible that this company will be decapitalized and the same shall be subject to deregistration under the Commercial Law. You should bear in mind that the accrued share of the leaving (deceased) partner should be treated as a liquidation share within the meaning of § 1, item 6 of the additional provisions of the PITA. In accordance with the provisions of Art. 38, para. 1, item 2 of the Personal Income Tax Act, with a final tax, shall be taxable the taxable income from dividends and liquidation shares in favor of a local or foreign natural person from a source in Bulgaria. In accordance with the provisions of Art. 38, para. 4 of the PITA, the final tax on the income from liquidation shares is determined on the positive difference between the value of the liquidation share and the documented cost of acquisition of the share in the company. The final tax for this type of income is 5 percent and is deducted from the payer of the income at the expense of the recipient.
We hope we have been helpful.
Greetings!
