Recent amendments to the Non-Profit Legal Entities Act

Аn Amendments and Supplements Act to the Non – Profit Legal Entities Act were published in the Bulgarian State Gazette, Issue No 74 as of 20th September 2016. They shall enter into force on 01st of January 2018.

The purpose of the amendments is to improve the transparency, the legal certainty and initiative regarding the activities of this type of organizations.

Amendments such as the transfer of the registration activities from the Regional courts to the Registry Agency shall have several positive consequences:

  • 1)Decrease of the administrative burden of the registration process of the non – profit organizations - faster registration procedure, lower state fees, electronic (remote) submission of documents, etc.;
  • 2)Improvement of the transparency and accountability of the non – profit organizations, publishing of all financial and organizational activities reports;
  • 3)Adequate usage of the organizational and technical resources of the Registry Agency.

All existing organizations shall have a three year period (as of 01st of January 2018 to 31st of December 2020), during which they should transfer their registration from the relevant Regional court to the Registry Agency. The procedure shall be free of charge.

Another amendment provided is the one month deadline to apply for registration of change in the circumstances, subject to entry in the registry of the non – profit organizations. It is considered that it shall increase the legal certainty and the transparency of the activities of the non – profit organizations, given the fact that such application deadlines do not exist in the current legislative regulations. The lack of such timeframe is resulting in months-later applications for change of circumstances, subject to registration under the files of the non – profit organizations (changes in the company’s statute/statement, election of new managing authorities, etc.). Thus, the proposed one-month deadline, commencing as of the first day of arising out of the circumstances, respectively their amendment, shall have a significant disciplinary impact.

An exception to the one-month deadline for publication shall be applied to the financial statements and public benefit activity reports of the non – profit organizations, which, as the financial statements of the commercial entities, shall have to be announced by the 30th of June of the year, following the year to which they relate. Failure to accomplish this obligation shall result in a sanction, stipulated with the new Art. 44a of the Non- Profit Legal Entities Act, where it is provided that in case an organization fails to declare for announcement the relevant acts for two consecutive years, it shall be announced as organization with “temporarily ceased public benefit statute”.

There is also an amendment with regard to the moment of establishment of the non – profit organizations of public benefit - they shall be considered established as of the moment of their registration with the Registry Agency. Thus, the need for support of a second, specialized Central registry at the Ministry of Justice shall drop out.

The new amendments in the Non – Profit Legal Entities Act are of significant importance to the policy of support to the development of the civil society, governed by the Council of Ministers. The Council of Ministers shall periodically adopt and update a strategy to support the development of the public organizations in Republic of Bulgaria. A Council for Civil Society Development shall be established by the Council of Ministers. The activities performed by this new Council are defined in Art. 4, para. 3 of the Non – Profit Legal Entities Act.

Тhe new moments in the Amendments and Supplements Act to the Non – Profit Legal Entities Act aim to ease the applicants, to improve the regulatory framework’s quality and the overall transparency, efficiency and accessibility of the new Non - Profit organization’s Registry.