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What will change in a monistic joint-stock company, incorporated according to Czech Law, after the amendment to the Business Corporations Act?
When will the amendment to the Czech Business Corporations Act (“BCA”) be effective?
The majority of changes incorporated by the amendment of BCA will come into effect on 1st January 2021.
According to the existing legislation, two bodies are required to be established in a monistic joint stock company, namely the Administrative Board (in Czech “správní rada”) and the Statutory Director (in Czech “statutární ředitel”).
What statutory bodies will form the internal corporate structure in a monistic joint stock company when the amendment comes into force?
The main change will be the dissolution of the body of statutory director. Under the amendedment, the sole statutory body of a monistic joint stock company will be the Administrative Board. It shall have three members, unless otherwise provided by the company´s Articles of Association. After the amendment of the BCA comes into effect, the position and powers of the statutory director will be transferred to the Administrative Board, which will become the true and only statutory body of the monistic joint-stock company with management and control functions. The function of the Chairman of the Administrative Board will also be abolished.
Is it possible to assign different business management roles to the individual members of the Administrative Board after the amendment to BCA?
No, it will not be possible to divide the powers of business management among the Administrative board members according to certain areas of focus. The Administrative Board shall be responsible for business management and accounting of the company, and it shall be also liable for submission of the financial statements at the General Meeting of the company for approval, and for proposal of distribution of profits of the company.
Who elects the members of the Administrative Board of Trustees after the amendment to BCA comes into effect?
New members of the Administrative Board are explicitly elected and removed by the General Meeting, unless the Articles of Association stipulate that the right to appoint or remove one or more members of the Administrative Board is attached to a share.
What about employee participation in the Administrative Board after the amendment to BCA?
The amendment to the BCA does not provide for the employee participation in the Administrative Board (monistic system).
What is the deadline for the monistic joint-stock companies to bring their Articles of Association in compliance with the amendment?
All the monistic joint-stock companies concerned are obliged to suitably modify their statutes to be in compliance with the amended version of the BCA no later than 1 year from the effective date of the amendment, i.e., by January 1, 2022. After that date, all parts of the statutes that conflict with the amendment shall cease to be valid and effective.
If you are planning to transform your company to the monistic internal structure, the best time is to do it from 1.1.2021. If you already have a monistic joint stock company, you need to harmonize the statutes from 1.1.2021 onwards.
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Jasper Brinkman
Jasper Brinkman
"Following a devastating hotel fire in Prague, the law firm Holubová advokáti, led by attorney Klara Dvorakova, successfully represented our extended family as a group of victims. The firm navigated complex international insurance and compensation laws to defend our rights.
I would like to acknowledge the extraordinary efforts the firm had to make to bring our case to a successful compensation under extremely difficult circumstances."
Stewarts
Stewarts
"A visit to her daughter in London turned Eva's life upside down when she says she stepped into a crossing on a green light but was hit by a car. Despite her remarkable bravery, she faced a long treatment due to fractures in her pelvis, and the associated limitations and pain are likely to persist for the rest of her life. Regular headaches and impaired concentration compound her challenges.
Eva contacted us through an organization temporarily helping her manage her difficult living situation. At that time, she was destitute, relying only on subsistence payments. We were able to assist her because we specialize in personal injury and have contacts with proven colleagues abroad.
We worked with Stewarts, a UK law firm, on this case. Attorneys Klára Dvořáková and Rebecca Huxford helped Eva with the documentation in her case, explaining her options and the differences between the Czech and British systems of healthcare and social benefits reimbursement. Within a few months, thanks to the professional cooperation between the two offices, an offer of compensation from the insurance company of approximately CZK seven million was achieved. The client accepted this settlement because she did not want to deal with courts in the United Kingdom.
Subsequently, we assisted the client with related tax issues and contacted Auditone, a tax consultancy firm, which arranged for the filing of a tax return. Compensation for lost income is taxable, unlike most personal injury compensation.
'No one has done as much for me as you,' Eva said.
The fact that we were able to help Eva gives our work meaning and brings us great joy. We are very happy that, thanks to our many years of active involvement in the international professional organization PEOPIL, we can cooperate on such cases."