Business in Czech Republic
www.business-in-czech-republic.eu


How to establish a limited liability company
How to establish a joint-stock company
How to establish a co-partnership
How to establish a cooperative


How to establish a limited liability company (s.r.o.)

Basic steps for establishing a limited liability company. (s.r.o. - spolecnost s ruceni omezenym)

10 steps to a limited liability company

1. Extracts from the police record for future managing directors
2. Confirmation from the revenue authority for documents declaring that partners have no tax outstanding payments
3. Statutory declaration and specimen signatures (authenticated) of future managing directors
4. Establishment of the company's place of business (e.g. signing an occupational lease for using non-residential rooms, including documented landlord ownership by the real estate cadaster)
5. Establishment of partnership articles at the first general meeting; signing and verification by the commissioner for oaths.
6. Establishment of a bank account for basic capital deposit (the bank usually requires an original of the partnership agreement); the bank will issue a written document about the payment of deposits by each partner afterward
7. Reporting of trading at the Trade Licensing Office and license application (forms are on the Internet)
8. Within 90 days of establishing a company, theremust be an application for registration in the Commercial Register. The application has this enclosure:
- two copies of the partnership agreement signed and verified by the commissioner for oaths
- confirmation from the curator of deposits
- bank confirmation of ability to make deposits
- authorized copies of trade licenses
- documents about the legal title of using real property - occupational lease
- statutory declarations of managing directors and specimen signatures
- extracts from the police records for managing directors
- legal stamp valued at CZK 5,000
9. Registration at the Social Security Administration and a selected health insurance company no later than eight days after registering in the Commercial Register (registering may take some time, even months)
10. Registering at the revenue authority within 30 days of establishing a company

Legal regulation:

Commercial Code (§ 105 - 153e)
▲BACK ▲

How to establish a joint-stock company (a.s.)

Basic steps to establishing a joint-stock company. (a.s. - akciova spolecnost)

1. Drawing-up of memorandum of the association ("Společenská smlouva" in Czech), undersigned by all partners (proposal of the articles of the association is part of the memorandum of association)
2. Partners pay their agreed amount of contribution into the bank account
3. Extracts from the police records for future managing directors and documents about professional capability
4. Registration at the Trade Licensing Office
5. Registration in the Commercial Register

Documents neededThe following information must be included in the memorandum of association and the deed of foundation:
•  company name, place of business and subject of enterprise
•  suggested amount of basic capital
•  number of shares and nominal amount of a share (as the case may be written sort of share)
•  capital subscription of every founding partner
•  in the case of non-monetary capital: method of valuation and price of non-monetary capital

If establishing a joint-stock company by a call for subscription of shares, the memorandum of association or deed of foundation must contain the following information:
•  time and place of subscription of shares
•  procedure for subscription shares in a value higher than the basic capital
•  place and time for payment of subscription shares and the amount
•  way of convocation of foundation meeting subscribers

The code of rules is another fundamental document that is needed for founding a joint-stock company. The code of rules must by law contain the following information:
•  company name and place of business
•  subject of enterprise
•  value of basic capital and way of share payment
•  number and nominal value of shares; specification of share type – registered share or bearer share
•  way of convocation of foundation meeting, its activity and decision making
•  number of members on the executive board, advisory board or other boards and setting their duties and decision making process
•  value of beginning general reserve and value of its yearly increase
•  way of  profit distribution
•  consequences of breach of duty for share payment in time
•  way of increase and decrease of basic capital
•  way of changing or adding to the code of rules

The minimum value of basic capital is CZK 2,000,000, or in the case of a public call appeal for subscription of shares, CZK 20,000,000.

Legal regulation

How to establish a co-partnership

Basic steps for establishing a co-partnership.

Drawing up of the articles of partnership ("Společenská smlouva" in Czech) and undersigned by all partners (establishment of company) 
  1. Partners pay their agreed amount of contribution in the time scheduled by the articles of partnership
  2. Submissiong of an enrollment application at the appropriate Trade Licensing Office. The Trade Licensing Office appraises the trade licence for activities that will be inscribed in the Commercial Register as the sphere of business.  
  3.  Application for an extract from the police records (not older than three months)
  4. Application for a document about professional capability (in case the partner is a foreign person)  
  5. Application for legalization copy from the real estate cadaster (legal reason for room use)
  6. Application to the egional court of justice for the original document or legalization copy of documents proving the existence of the corporate body (with translation of interpreter registered by the regional court of justice, in the case that a partner is a foreign corporate body). In the case that documents are issued by a state with which the Czech Republic does not have a virtue agreement, then all documents must have super legalization or Apostila.
  7. Application to the revenue authority for documents declaring that partners have no outstanding tax payments  
  8. Document about a residency permit in the Czech Republic (when a partner is a foreign person and when articles of partnership declare that he/she is a statutory body) 
  9. Document about a residency permit in the Czech Republic (when a foreign person has procuration) 
  10. Proposal for company registration in the Commercial Register (company origin)  
  11. Fee of CZK 5,000 for registering the co-partnership in the Commercial Register

Legislation:
Commercial Code (§ 76 - 92e)
▲BACK ▲

How to establish a cooperative

Basic steps to establishing a cooperative.

For establishing a cooperative, a constitutive meeting is needed, which:
    • Assigns the value of basic capital
    • Approves the code of rules
    • Elects the cooperative board and control commission

The basic membership fee has to be paid within 15 days of the constitutive meeting.

  • There must be at least five members in a co-op. In the case that members include two corporate bodies, this rule does not apply.
  • Basic capital value has to be a minimum of CZK 50,000.
     
  • Upon its founding, the co-op is obliged to create an indivisible fund at least in the value of 10% of basic capital.

Legislative regulation
Commercial Code (§ 221 - 260)
▲BACK ▲

www.prague-real-estate-agents.eu | www.relocation-to-prague.eu | www.prague-rentals.eu | www.relocations-europe.eu | www.relocationexperts.eu
www.business-in-czech-republic.eu | www.businesscompanies.eu | www.businessinczechrepublic.eu | www.czechrepubliclaw.eu |
www.czechcities.eu | www.praguerealestateagents.eu