Hardly having taken off, the commercial registry has already fallen prey to a number of problems. There have been complaints from registrants, petitions calling for its closure from civic organisations and letters from business organisation to the Registry Agency (RA) and the Ministry of Justice – the organisations responsible for the registry.

Many criticised the registry, launched on January 2 after two years of postponements, for cumbersome red tape, unregulated disclosure of personal data online and for illegally charging fees.

The offices of the RA, which took over processing company documentation from regional courts, instigated a one-operation-a-queue service that meant some people lined up for three days before they were able to complete the re-registry of their company.

Many problems led to crammed offices, including: a lack of sufficient desks (only 16 people in the Sofia office); the extensive paperwork, filled out on the spot, that meant each (re-)registrant was at a desk for 30 minutes minimum and then had to wait in separate lines for individual, even if they were consecutive, operations; and the short opening hours of the agency.

The overcrowding also stemmed from the fact that while the courts issued 5000 current company status certificates a day, the Registry Agency could only process 80.
Applications were frequently turned down for minor errors or missing fields.

People also complained that the agency officials could not be reached by phone or email.

Computer specialists noticed the website, which also launched on January 2, provided free access to personal data of company owners. The information included the names, the single identity number, ID card number, home address and phone number of owners.

The explanation from the Registry Agency was that the applicable law provided for the publication of the complete data filed by applicants and, while the local legislation did not specify it, the data included scanned copies of ID cards.

Computer specialists, for their part, filed a petition calling for the site to be closed until the site developers were able to ensure the data was protected as outlined under European Union regulations, the Personal Data Protection Act and the constitution. They noted that full disclosure exposed company owners to crimes such as personal identity theft. In turn, that could lead to bank withdrawals and all kinds of operations on “behalf” of the owner of the data. In addition, the website was prone to crashing and needed further development, the computer specialists said.

In an open letter to Bulgarian Justice Minister Miglena Tacheva and Registry Agency chairperson Emil Stankov, the Bulgarian Industrial Association (BIA) joined the chorus of complainants. In it, the BIA said that instead of creating a uniform, quick and transparent digitised register that would ensure a simpler and quicker procedure “now local companies were subject to a ‘penal procedure’ against business”. The letter signed by BIA head Bojidar Danev said that problems of this kind did not only incur damages to business but also undermined trust in the registry reform.

Noting the complaints from registrants, the BIA mapped out its main concerns with regard to the register and provided recommendations on ways to improve the service.
The BIA said that the technology used to process applications involved the re-writing, scanning, printing, signing and finally the return to the applicant of eight pages of documentation. It took at least half an hour to process one application.

The sluggish procedure had resulted in applicants missing a seven-day deadline to re-register their company and file new circumstances. Both of which were punishable with fines of between 500 and 1000 leva.

In addition, people had seen their applications turned down for minor errors and others had been charged multiple fees for a single error.

The website had no confirmation page and e-applicants were uncertain whether their application had been processed and accepted. Going further, the website of the agency did not feature dates for companies’ general assemblies.

In other complications, some courts required a fee before they would issue a company’s current status certificate for the purpose of re-registration. The Commercial Register Act states that re-registration is free of charge. Also, some of the notaries on the justice ministry list, charged applications under the Notary Fees Tariff not as authorisation of signatures but rather as authorisation of a document, which made the application procedure even more expensive.

To resolve some of the issues, the BIA suggested the creation of a front office, which would serve clients using an entry number system. In addition, documentation could be processed in a back-office to reduce the waiting time for applicants.

Another recommendation was that agency officials should only reject applications with major errors. In addition, it advised that a legal amendment should be made, restricting the number of times documentation could be rejected for not being completed properly to one.

Finally, courts should be legally prevented from charging fees for the issue of a certificate on the current company status. Also, it should be strictly enforced that notaries charged the correct fee under the Notary Fees Tariff.

The RA has repeatedly responded to complaints in public and has already made some changes in response.

Daniela Miteva, the deputy director of the RA, told the media that the Sofia office had already added 10 new desks. The single line proposal was not viable because some services were processed faster than others. For this reason, some desks would continue to process company registration, others re-registration and a separate group would process information requests and name retention.

Miteva said allocating numbers to applicants was prone to corruption. People would start trading numbers, hence, the proposal was not useful.

Miteva asked registrants to opt for online registration to avoid queues. She said online registration was a neat procedure, although it needed patience on registrant’s part. Since the system could only register one company a second and at peak hours up to 2000 applications were being filed at one time, registrants needed to make several attempts before catching the “spare” second.

Working hours had been cut to 3pm because all applicants that went to an office prior to that time needed to be seen that day. When the working day ended at 4.30pm, Miteva said, agency officials would stay until 9pm.

She also urged registrants to read the Commercial Register Act before coming to the agency to reduce errors in filing out the documentation.

Miteva said, though, as the agency was still in its infancy that this had lead to some documentation being rejected unfairly. She promised the problems would be addressed and eliminated and when rejecting applications officials would need to present strong arguments. If the arguments were overturned, the official had no right to reject registration on new grounds.

Officials had already stopped scanning ID cards, Miteva said. At present, the RA was reviewing which personal data to leave on the site and which to keep hidden. If all data was hidden, then the commercial register would no longer be open to the public and it would not meet one of its original objectives.

In an investigation into what data from registration processes different countries make publicly available, The Sofia Echo found that Hong Kong allows access to names, home addresses, ID card numbers and personal signatures. The European business register contains the names of the proprietor, their home address and date of birth.
As Georgi Angelov said, in his blog in reference to a civic petition, the closure of the commercial register over inconsistencies held no water. “It is like saying whenever there is a problem with the pension system it is requested that pensions are not paid for several months until the problem is solved. Or whenever there is a problem with the healthcare system to halt healthcare services until the problem is solved,” Angelov wrote.

The problems with the commercial registry will not be solved by closing it, but step-by-step, resolving each issue as it is identified.