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Greek Economic and Trade Office Embassy of Greece Prague, Czech Republic |
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E-mail: [email protected] |
Website:
http://geocities.com/greek_trade |
I N V E S T I N G I N T H E
C Z E C H R E P U B L I C
Legal forms of companies
in the Czech Republic
A foreign
person, i.e. an individual whose place of residence is outside the Czech
Republic or a legal entity whose registered office is outside the Czech
Republic, can start business activity in the Czech Republic under the same
conditions as a Czech person. There is
no special Joint Venture Act.
Foreign legal entities and
individuals may form a wholly-owned business company, partnership or
co-operative in the Czech Republic, provided that it is permissible under the
Commercial Code. Foreign persons may
also become shareholders (partners) in existing Czech businesses or open their
branches here.
The legal capacity of a
foreign legal entity is governed by the legislation of the country where this
legal entity was established, such legislation also applies to its internal
relations. Foreign persons authorized
to conduct business activity abroad are considered to be entrepreneurs under
the Czech Commercial Code.
The primary source of Czech corporate entities in the Czech Republic is
Act No. 513/1991 Coll., the Commercial Code, as amended. The Commercial Code
governs the following legal entities: General Commercial Partnerships, Limited
Partnerships, Limited Liability Companies, Joint Stock Companies and
Co-operatives. All those legal entities have to be registered in the Commercial
Register administered by the Czech courts. A General Commercial Partnership and a Limited Partnership are called personal business companies.
However, majority of legal entities, organized for the purpose of carrying out
the business activity in the Czech Republic, are the capital business
companies, i.e. the Limited Liability
Companies and the Join Stock
Companies.
Limited Liability Company
A Limited Liability Company is a business company the registered capital of
which is formed by previously determined investments of its partners. This company is liable for its obligations
with its
entire property, while its partners are jointly and severally liable for company's obligations
up to the amount
of their unpaid investments registered in the Commercial Register. This type of
company can have at maximum fifty founders; it can however be founded by a
single one, a natural or a legal entity.
Establishment and Incorporation
The company is established by
Articles of Association or, in case of a sole founder, by a Foundation
Act. The Articles of Association or the
Foundation Act have to have a form of a public notary`s deed, they have to be
signed by all the partners of the company, whose signatures have to be verified
by a notary public. The company is incorporated at the day of its registration
with the Commercial Register. The
proposal for a registration of the company with the Commercial Register has to
be filed within 90 days from the day of the establishment of the company.
The existence of the company
starts from the day of the incorporation. Any legal acts made by individual
partners within the period from establishment of the company until
incorporation of the company, have to be approved by a companies general
meeting within 3 months from the incorporation, otherwise such actions on
behalf of the company engage these partners jointly and severally. Within this
period from establishment to incorporation, in accordance with the Trade
Licensing Act, the company also has to obtain all the trade licenses stated in
the Articles of Association or in the Foundation Act.
Registered Capital,
Investments of partners
Registered capital is a
financial expression of a sum of both monetary and non-monetary investments of
individual partners. Anything that may
be expressed in money and used for the given sphere of business can be used as
an investment into the company, that is to say buildings, machinery,
securities, know-how, inventions, copyrights or even claims. The minimum amount
of the registered capital is currently CZK
200 000 (approximately EUR 6 300), while the minimum amount of
one partners investment is CZK
20 000 (approximately EUR 630).
The amount of the partner`s investment must be divisible by 1000 and the
partner can participate in the company by only one investment. If the company is founded by a single
founder, the registered capital must be fully paid up before registration of
the company in the Commercial Register (incorporation). Otherwise, it is sufficient to pay 30 % of
the registered capital, provided that this amount is no less then CZK
100 000 and to pay the rest of the registered capital within 5 years from
the day of the incorporation of the company.
Each partner of the company has only one business share, but one business
share can belong to more persons. Unless the Articles of Association state
otherwise, the size of the partners business share in the company is determined
by the ratio of his investment to the registered capital to the amount of the
registered capital of the company. The
business share represents the participation of the partner in the company and
his rights and obligations resulting from this participation. The business share can be transferred to
another partner of the company or to a third party with prior consent of the
company´s general meeting, if it is permissible according to the Articles
of Association. The business share of a dissoluted legal entity, which is a
partner of the company, shall pass to its legal successor and upon death of a
partner it shall pass to his heir. Such transitions could be, however, excluded
by the Articles of Association.
It is obligatory to form a
reserve fund in a sum amounting 10 % of the company´s registered capital,
which purpose is for covering losses of the company (the company is not allowed
to use it for another purposes). However, the reserve fund doesn´t have
to be formed at the beginning of the company´s business activities. Money
is transferred to the fund free from tax from profits of the current year.
Company´s bodies
The highest body of a limited
liability company is its general meeting. It is a collective body deciding all essential matters
concerning the company, with exception of its business management. General meeting
is being held at least once a year, because it is solely authorized to endorse
final economical results of the company and to close its business year. If a
company has only a sole partner, only such partner, instead of the general
meeting, takes decisions.
The statutory body of a limited liability company
is its executive (one or more
executives). Executives are appointed among company partners or other third parties
by the general meeting. Executives
ensure
business management of the company and act on behalf of the company with the
third parties.
The company may establish a
supervisory board, consisting of minimum three members. It´s function is to supervise the activities
of the executives, business and accounting books of the company and to review
final accounts statements of the company.
Dr. Athanassios Pantazopoulos
Mgr. Lucia Triebusnikova
Tel.: (+420) 222 722351
Fax.:(+420) 222 719472
E-mail: [email protected]
Visit also:
Legal
forms of companies in the Czech Republic
Real
Estate Acquisition in the Czech Republic
Ιδιωτικοποιήσεις
Τσεχία κατά το 2001