This overview provides a focused analysis of the legal framework regarding the misuse of corporate assets in Bulgaria as of 2025. We will outline when such actions attract liability, describe relevant legal references, and clarify how criminal, civil, and administrative consequences may differ for company directors and shareholders.
Key Policies on Misuse of Corporate Assets in Bulgaria (2025)
In Bulgaria, the distinction between civil, administrative, and criminal liability for misuse of corporate assets is particularly relevant for sole directors who are also the sole shareholders of their companies. The Bulgarian Criminal Code serves as the foundational statute but does not by default criminalize all instances of mixing personal and company assets (also known as mixing patrimony).
| Status | Applicable in Bulgaria (2025) | Reference |
|---|---|---|
| Criminal liability for misuse of assets by sole director/shareholder (without third-party harm) | No | Bulgarian Criminal Code (Наказателен кодекс), Art. 219, 254 |
| Criminal liability if third-party (e.g. creditor, tax authority) is prejudiced | Yes | Bulgarian Criminal Code (Наказателен кодекс), Art. 219, 254 |
| Possible civil or administrative liability (no criminal liability) | Yes | Assessment based on case circumstances |
Criminal Liability: What Triggers Prosecution?
According to the Bulgarian Criminal Code, misuse of company assets by a sole director who is also the sole shareholder does not result in criminal prosecution unless the conduct leads to actual harm to third parties (such as creditors, tax authorities, or other stakeholders). The relevant criminal provisions referenced—Articles 219 and 254—require some form of prejudice against external parties before criminal sanctions are applied.
If, for example, using company funds for personal use causes a loss to a creditor or results in tax evasion or fraud, then criminal liability can arise, and prosecution is possible. However, in cases where there is no external harm, such behavior may still lead to civil or administrative consequences, but not criminal penalties under Bulgarian law as of 2025.
Legal References and Commentary
The assessment is based on the interpretation of Articles 219 and 254 of the Bulgarian Criminal Code as outlined by Deloitte Bulgaria and Kinstellar. These sources confirm that criminal liability in this context is not automatic, marking a key distinction from some other legal systems.
For an official reference to Bulgaria’s legislative texts and governmental information, see the Bulgarian Government Portal (official homepage).
Sole Director and Shareholder: What Does This Mean Practically?
If you are both the sole director and the sole shareholder of a Bulgarian company, using company resources for personal purposes does not, in itself, constitute a criminal act unless a third party is directly harmed. This grants a certain operational flexibility, but it is not absolute immunity—even sole directors must exercise caution to avoid actions that could harm external stakeholders.
Civil or administrative regulations may still apply if the actions violate other legal norms or if the company’s interests are affected, but criminal prosecution is generally reserved for cases where fraud, embezzlement, or third-party harm is involved.
Summary Table: Legal Consequences for Misuse of Corporate Assets (Bulgaria, 2025)
| Scenario | Criminal Liability | Civil/Administrative Liability |
|---|---|---|
| Mixing personal and company funds (no third-party harm) | No | Possible |
| Misuse leads to harm to creditors, tax authorities, etc. | Yes | Possible |
| Fraud or embezzlement involving company assets | Yes | Possible |
Pro Tips for Compliance with Corporate Asset Rules in Bulgaria
- Maintain clear and separate financial records for company and personal transactions, even if you are the sole director and shareholder.
- Always document decisions on the use of company assets, especially for items that could later be questioned or audited.
- Monitor transactions involving third parties—creditors, vendors, tax authorities—since harm to these entities could trigger criminal liability.
- Consult with legal advisors before engaging in unusual transfers or uses of company resources, particularly if the company is under financial stress.
Overall, the legal environment in Bulgaria as of 2025 provides a clear distinction: mixing personal and corporate finances is not automatically a criminal offense for sole directors/shareholders unless it prejudices third parties. However, proper documentation and vigilance are essential to avoid both civil and administrative complications. Maintaining transparent corporate governance practices remains the surest path to minimizing risks, especially for those managing companies with minimal external oversight.