The sole proprietor according to the Bulgarian commercial law
The sole proprietor (Bul.: Едноличен Търговец, short: ЕТ) is a special legal body of the Bulgarian commercial law. Contrary to other commercial entities, the sole proprietor is a natural person with commercial characteristic attributed by law. By the registration as sole proprietor into the commercial register, no new legal entity is created but the legal personality of the natural person gets extended. This way, the sole proprietor is responsible for the performance of the obligations deriving from commercial activities and the obligations deriving from his activities as private person. Hereby, he is liable for his obligations with all his assets.
According to the Bulgarian Commercial Code, the sole proprietor is a person that by occupation effects one of the commercial transactions listed in Article 1 (1) of the Commercial Code or that establishes a business that regarding its nature and extent corresponds to a commercially established business.
Pursuant to Article 56 of the Commercial Code, the sole proprietor is a natural person capable of acting having his place of residence in Bulgaria. The nationality is not determinative. Whether with Bulgarian or foreign nationality – what matters is that the person has a permanent residence in Bulgaria. Hence, the sole proprietor must be a natural and “local” person.
Article 57 of the Commercial Code provides restrictions which, if they are present, forbid the registration into the commercial register as sole proprietor. The sole proprietor may not be a person:
- if insolvency proceedings have been opened against his assets;
- who is bankrupt;
- whose commercial rights have been removed and have not been restored yet;
- that has been convicted for bankruptcy.
Regarding the registration into the commercial register, there is another restriction – according to Article 58 (4) of the Commercial Code, a person may register only one trade name as a sole proprietor.
The sole proprietor must attach his personal data, the data related to his business and a signature specimen.
Unlike the other merchants, the trade name of the sole proprietor must incorporate the person's given name and either the surname or patronymic by which he is generally known. Besides, this trade name may only be transferred together with the business.
To prevent an accumulation of trade names on one person, Article 60 (3) of the Commercial Code provides that in case of transfer or heritage of the enterprise the new owner's name shall be added to the trade name – in this case, the restriction one-person-one-sole-proprietor is hold good. Also the heir may only have one trade name. The transfer of a trade name is not a legal obligation but a legal possibility of the new owner to carry on the trade name. Furthermore, the transfer of the trade name may not be done by implication but must be expressly arranged.
As there is no new legal subject created with the registration as sole proprietor into the commercial register, Article 22 (3) of the Code of Family Law provides that the sole proprietor’s assets are not part of the community property of the spouses but that the creditors may access half of the assets of the community property of the spouses.
The sole proprietor is deleted from the commercial register, if:
- The sole proprietor terminates his activity or establishes a residence abroad;
- The sole proprietor dies;
- If the sole proprietor becomes judicially disabled.
The deletion from the commercial register does not relieve the person from obligations that were created earlier.