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Czech Republic company law

Czech Republic Business Corporations Act  90/2012 Coll. –  Company Law

The Czech Republic Business Corporations Act, 2012 is the primary legislation that regulates registration and operation of companies in the  Czech Republic. You will find below the key extracts from the Czech Republic Companies Act along with the full act.

Company Name

The trade name shall include the words “společnost s ručením omezeným”, which can be replaced with the abbreviation “spol. s r.o.” or “s.r.o.”

Registered Office and Registered Agent

The registered office must be in the Czech Republic and maintained in the Czech Republic.

Memorandum of Association BVI Registered Office

The memorandum of association shall include:

  • The company’s trade name
  • The objects or activity of the company
  • Identification of the members by indication of their name and their place of residence or registered office
  • Determination of the types of business shares held by each member and the rights and duties attached thereto, where different types of business shares are permitted in the memorandum of association,
  • The amount of contribution(s) pertaining to the business share(s),
  • The amount of registered capital,
  • Number of executives and the manner in which they act on behalf of the company

Upon the company’s establishment, the memorandum of association shall also include:

  • The contribution obligation of the founders, including the deadline for its fulfilment,
  • Indication of the person(s) appointed by the founders to act as the executive(s) or, as appropriate, the members of other company bodies who are to be elected by the general meeting in accordance with this Act,
  • Appointment of the contribution administrator
  • Any contribution in kind, its description, its valuation, amount applied towards the issue price, and specification of the person appointed as the expert to value the contribution in kind concerned.

The data may be deleted from the memorandum of association once the company is incorporated and the contribution obligation has been fulfilled.

Directors

The company’s director may be individual or company who complies with the following conditions:

  • Full legal capacity;
  • No commitment of crime; for the purpose of registration the person is deemed as not committing crime in case that it has not been sentenced for a crime committed, if such crime was committed in connection with business activities, or with the subject of business which is to be registered, unless it is deemed by law as not being sentenced;
  • No legal obstacles exist which would prevent the person from carrying out trading activities according to the trade licensing regulations and no continuing court ban exists which would prevent the person to perform the function of company director.

The company’s director may be a person – foreigner. The foreigner need not have a residence permit in the Czech Republic or other type of visa for the purpose of registration as company’s director.

Shareholders

Minimum number is one. Company’s shareholder may also be natural or foreign legal person. The foreigner need not have a residence permit in the Czech Republic or other type of visa for the purpose of registration as company’s shareholder.

Share Capital

The minimum contribution of each shareholder is in the amount of CZK 1.

Dissolution and winding-up of a business corporation

A court, on the basis of a petition of a person who has a legal interest therein or a petition of the prosecutor’s office, shall also dissolve a business corporation and order its liquidation, where the court finds a substantial public interest to do so, in the event that:

  • The business corporation lost all its business licences; this shall not apply in case the business corporation was also established for the purpose of managing its own assets or for a purpose other than doing business
  • The business corporation has not been able to perform its activities and, consequently, serve its purpose for more than 1 year
  • The business corporation is not able to perform its activities because of insurmountable differences between the members
  • The business corporation, without making recourse to natural persons, carries out an activity which may only be performed by natural persons pursuant to other legal regulation
  • The final liquidation report, the proposal on the use of the liquidation balance and the financial statements shall also be submitted by the liquidator to the supreme body of the business corporation

The liquidator shall ensure that the aforesaid documents are stored for a period of 10 years after the business corporation was wound up. Where a business corporation is wound up without liquidation, the filing of these documents shall be secured by its legal successor.