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With effect from 15 January 2023, the registration of companies in the Commercial Register has been facilitated, in particular by the abolition of the requirement to obtain a trade licence prior to the establishment of the company and the abolition of the obligation to prove the integrity of members of elected bodies by an extract from the criminal record. It is also now possible to use the official online model articles of association for the establishment of a "simple" limited liability company.
Act No. 416/2022, approved at the end of 2022, introduced changes in relation to the use of digital tools and procedures in company law and the operation of public registers. The aim of the amendment is to facilitate the establishment of a limited liability company and the making of entries in the Commercial Register, using electronic communication.
Registration of the company in the Commercial Register independently of obtaining a trade licence
It is no longer the case that companies must prove that they have obtained a trade or other business licence before being registered in the register. It is sufficient for registration that the object of business is stated in the company's founding act.
This change will speed up the first registration of new companies and allow them to be carried out independently of the processing of business permits at the trade licensing office. It will also have the consequence that the subject of business entered in the register will not correspond to the exact wording of the trade according to the annexes to the Trade Licensing Act, but should rather reflect the real subject of business of the company.
Members of elected bodies will no longer prove their integrity by an extract from the criminal record
In order to register members of elected bodies (typically managing directors and members of the board of directors) in the Commercial Register, it will no longer be necessary to prove their good character by an extract from the criminal record. According to the amended wording of Section 13 of the Registration Act, it is sufficient to prove the eligibility to be a member of the bodies of a commercial corporation by an affidavit of the registered person.
A false affidavit may be assessed as concealment of material facts in the documents used for registration in the Commercial Register and shall give rise to criminal liability under Section 254(2) of the Criminal Code.
Incorporation of a limited liability company using an internet template
The establishment of a limited liability company must be preceded by the conclusion of a memorandum of association or, if the company has a single founder, a memorandum of incorporation.
The Ministry of Justice has created a new model deed of incorporation for the establishment of a "simple" limited liability company. The template should be available on the Ministry of Justice's website at this link: https://justice.cz/?clanek=od-ledna-2023-bude-snadnejsi-zalozit-spolecnost
The use of the template is associated with exemption from the court fee for the first entry in the commercial register by a notary and with a reduced rate of the notary's fee for the incorporation of the company. In addition to the use of the template, another condition for a cheaper incorporation is that the deposit obligation is fulfilled by cash deposits only. Since a "simple Ltd." could be established even before the amendment, this is more of a wording change, where the new entitlement to cheaper establishment is conditional on the use of the model.
The model document contains the mandatory statutory elements and, in addition, the possibility of arranging a so-called freely transferable share (without the otherwise necessary approval of the general meeting). If you wish to arrange additional details beyond the statutory requirements, it is not possible to use the model and the associated advantage of cheaper incorporation.
The blacklist excluding members of the authorities will be in place from the summer
Furthermore, from 1 July 2023, amendments to the Corporations Act regarding eligibility to become a member of an elected body of a corporation and the creation of a non-public register of persons excluded from holding office in corporate bodies will be effective.
The condition for exercising the function of a member of an elected body of a commercial corporation will not be integrity under the Trade Licensing Act and the absence of obstacles to the exercise of trade; instead, the obstacles to the exercise of the function will be defined directly in the Commercial Corporations Act. Persons who will be subject to an impediment to holding office will be listed in a newly established register of disqualified persons administered by the Ministry of Justice.
We will be happy to handle the incorporation of the corporation and changes to the commercial register for you so that you do not have to worry about anything. Contact us.
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