A foundation is a type of non-profit non-governmental legal entity. By definition, a certain property is provided free of charge to the foundation in order to achieve an ideal non-commercial goal. This property can be of various types, but most often it is either money or real estate. When a foundation is established through a transfer of real estate, there is one specific difficulty that should be taken into account.
Foundations are regulated mainly by the Non-Profit Legal Entities Act (NPLEA). In order for a foundation to be established, it is mandatory for at least one Bulgarian or foreign legal or natural person, to provide gratuitously, with a unilateral memorandum of association, their property for achievement of non-profit goal (Article 33, para. 1, in conjunction with Article 5 of NPLEA). A sufficient condition for the memorandum of association to be effective is that it indicates the goals and the property given to the foundation.
NPLEA introduces an explicit requirement that when the memorandum of association transfers rights over real estate, it must be duly registered by the registry judge at the district court at the location of the property (in the relevant Registry Office/Property Register). By virtue of Article 6, para. 1 of the NPLEA, the legal entity of the foundation is established via its entry in the digital register of non-profit legal entities kept by the Registry Agency at the Minister of Justice. I.e. the foundation as a subject of law becomes effective as from its entry in the Commercial Register and the Register of Non-Profit Legal Entities at the Registry Agency (CRRNPLE).
One of the obligatory documents that must be submitted as part of the registration in the CRRNPLE, is the original copy of the memorandum of association. As mentioned above, when the foundation's property is composed of real estate, the memorandum must be registered. The problem comes from the fact that the applicable legislation does not explicitly specify the time for the memorandum’s registration - whether it should be before or after the registration of the foundation itself in the special electronic register of non-profit legal entities. In this sense, the question is whether the registration in the relevant Registry Office/Property Register, is a condition precedent for registration of the foundation in CRRNPLE.
The case law is clear  that the registration in the Registry Office/Property Register should precede the application for registration in the special register of non-profit legal entities.
This conclusion is based on Article 33, para. 4 and 5 of the NPLEA. According to para. 4, the provided property is considered part of the property of the foundation from the moment when the foundation has not yet emerged as a legal entity - from the date of the memorandum of association or the opening of the inheritance in case of death. However, this is only relevant in case the foundation was subsequently registered in the CRRNPLE.
Para. 5 provides for the possibility of the founder to revoke the memorandum of association until the actual establishment of the foundation as a legal entity. Therefore, the provision of property is a prerequisite for the establishment of the foundation. And since the founder usually donates real estate for the purposes of the foundation, the memorandum of association should be registered by the registry judge at the district court at the location of the property before submitting the application to the CRRNPLE for registration of the foundation. The memorandum of association should be entered in a special personal account of the foundation in the relevant Registry Office / Property Register, despite the lack of a unique identification code (as the foundation would have if it was duly registered in CRRNPLE), noting that the legal entity (the foundation) is in the process of registration.
The resolution applied by the court should be supported, despite the fact that the first court decisions dealing with the issue were issued before the digitalization of the special register of non-profit legal entities and its inclusion in the Commercial Register. However, insofar as the registration of the memorandum of association in the relevant Registry Office / Property Register is made after verification by a registry judge, including whether the submitted act meets the legal requirements, it is possible that the lack of explicit legislation will lead to a refusal of the registration. In these cases, the intended result can be achieved by appealing the refusal to the competent court, which should render its decision in accordance with the binding case law.
 In this respect are Decision № 138 of 09.03.2004 of the CC of the Supreme Court of Cassation under case file № 845/2003; Order № 626 of 14.08.2012 under case № 820/2011 - Volume II of the Supreme Court of Cassation, Decision № 235 of 25.10.2019 under case № 376/2019 of the District Court of Ruse; Decision № 135 of 18.05.2011 under case № 116/2011 of Veliko Tarnovo Apellate Court; Order № 1362 of 13.05.2012 under the civil case № 122/2012 of the District Court of Varna; Decision № 1330 of 30.12.2020 of the Sofia City Court under case № 1773/2020; Decision № 261 of 12.05.2021 of the Sofia City Court under commercial case № 344/2021; Order № 495 / 12.05.2022 under civil case №287 / 2022 and others.