On 16 July 2026, the Council of Ministers submitted to the National Assembly a Bill supplementing the Non-Profit Legal Entities Act (the “NPLEA”). The Bill concerns associations, foundations and other non-profit legal entities (“NPLEs”) that are still registered only with the district courts and have not been re-registered in the Register of Non-Profit Legal Entities maintained by the Registry Agency.

The original deadline for re-registration expired on 31 December 2022. However, the existing legislation did not provide for clear consequences, including sanctions, for NPLEs that failed to fulfil this obligation. In practice, this rendered the deadline merely instructive rather than mandatory. As a result, the courts adopted differing approaches - some continued to issue the certificates required for re-registration after 2022, while others refused to do so on the grounds that the statutory deadline had already expired.

For these reasons, many NPLEs remain registered solely with the district courts. This creates practical obstacles to the fulfilment of a number of their statutory obligations, including those under the Accountancy Act concerning the publication of annual financial statements.

Against this background, the Council of Ministers proposes introducing a new final deadline for re-registration: 31 December 2027. In practice, this would be the last opportunity for the affected NPLEs to continue their normal activities and be entered in the central electronic register.

If no application for re-registration has been submitted by that date, or if a refusal to re-register has become final, the activities of the relevant NPLE will be deemed terminated as of 1 January 2028. The status “inactive” will be entered automatically against the entity in the BULSTAT Register.

From that date, the powers of the NPLE’s legal representatives will be significantly restricted. They will only be permitted to receive statements and notices addressed to the legal entity and to file an application for it to be declared insolvent.

Between 1 January 2028 and 31 January 2031, liquidation proceedings may be initiated in respect of an NPLE that has not been re-registered. An application may be submitted, among others, by a founder or member of the NPLE; a member of its governing body; a legal entity in which the unregistered NPLE participates; an heir of a foundation’s founder or the executor of the founder’s will; a person who would benefit from the foundation’s activities; a creditor; or a person involved in pending court, arbitration or enforcement proceedings with the NPLE.

As a rule, the NPLE’s legal representative, as registered with the relevant court, will be appointed as liquidator. If that person is unable to perform the role, another member of the governing body may be appointed. Only where neither option is possible will the person who initiated the procedure be entitled to nominate another person as liquidator.

The person submitting the liquidation application will be required to provide the funds necessary for conducting the proceedings, including payment of the liquidator’s remuneration. This is an important practical consideration for creditors and other interested parties contemplating the initiation of such proceedings.

If the Registry Agency refuses an application for re-registration, the refusal may be appealed before the district court at the NPLE’s registered seat within seven days. The proceedings will be subject to two levels of judicial review, and no state fee will be payable for appealing the refusal.

NPLEs that have not been re-registered by 31 January 2031 will be deemed deleted. The status “deleted” will be entered automatically against them in the BULSTAT Register.

If the Bill is adopted, associations and foundations that have not yet been re-registered will be given one final opportunity to regularize their status by the end of 2027. The consequences after that deadline will be significant: first, termination of their activities and designation as “inactive”; then the possibility of liquidation proceedings being initiated; and, ultimately, final deletion.

The governing bodies and founders of unregistered NPLEs should therefore review their entities’ current status and take the necessary steps in good time, rather than waiting until the deadline approaches. Creditors and persons involved in pending proceedings against such organizations should also assess whether future liquidation proceedings could affect the protection and recovery of their claims.

The proposed amendments are expected to bring the long-running re-registration process to a close, resolve the inconsistent court practice and establish a uniform regime for all NPLEs.

This article has been prepared for and is part of the Legal Digest issued by Penkov, Markov & Partners. The publications therein do not constitute legal advice and are not binding. Penkov, Markov & Partners reserves all rights to this material, and any distribution thereof is subject to the prior written consent of the law firm.