Recently, the media in Bulgaria has trumpeted a new business crime - the theft of a company. In 2014, there were a number of reported cases in which companies were stolen, e.g. their ownership was changed or a new managing director was appointed by a thief without the knowledge of the actual owner, nor of the company's management body.
The Company Registration System
All companies in Bulgaria are registered with the Commercial Register, kept by the Bulgarian Registry Agency at the Ministry of Justice (the "Commercial Register"). The Commercial Register is a central electronic database of companies that allows free public access to the companies' files and documents published therein. Any changes to a company's files can be made electronically (all required documents are to be filed as scanned copies and an online application is to be signed by an electronic signature). So, de facto, the Commercial Register's officers cannot authenticate either the filed documents or the identity of the applicant.
How Does Company Theft Happen?
Potentially, anyone can create fake documents and forge the signatures necessary to create a resolution for any kind of company change. Once this is done, it is even easier to file their scanned copies electronically with the Commercial Register. All of this is possible without anyone from the company even being aware of it. The change could result in an appointment of a new fake managing director who could then begin managing the company's day-to-day business and profit from fraudulent dispositions of the company's assets. Such an imposter might even sell the company or its assets to another person.
New Measures Against Company Theft
From the beginning of 2015, the Registry Agency has begun providing a new service which notifies subscribers by SMS every time any company change has been filed for registration with the Commercial Register. To register for SMS notification, subscribers should go to the Registry Agency's website1 and fill in a registration form. The notification service will be activated within 48 hours. The subscription can encompass up to ten companies, includes 5,000 SMS, and is valid for two years from the date of purchase at the symbolic price of BGN 6 (approx. EUR 3).
There are, however, some shortcomings associated with the notification system, including that the service is accessible only by subscribers of Bulgarian mobile operators, and may be activated only within the territory of the Republic of Bulgaria. Once activated, the service is also accessible abroad, provided that the client uses data roaming.
Since the SMS notification is currently the only certain way for company owners to protect themselves from a company theft, subscribing to the SMS notification is strongly recommended. Moreover, companies already affected by such fraud are demanding amendments to the Commercial Register Act.
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