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Company Formation Czech Republic



Company Act in the Czech Republic

Updated on Monday 11th December 2017

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The Business Corporations Act, the new law (as of 2014) on trading co-operatives and companies in the Civil Code, has at its core the idea of facilitating business enterprises and of addressing various features of the investment environment. Some changes are brought to the conduct of business in the Czech Republic which will also shift current legal and business relationships.

New Rules of the Czech Company Act

The new regulations of this act are generally seen as having the qualities to provide a more business-friendly, flexible environment for foreign investors who wish to establish companies in the Czech Republic. Some of these changes are as follows:
  • - new requirements for the founding deeds of corporations which must comply with the Corporations Act's provisions, thus, companies have to abide and then file the new version with the Czech Commercial Register within half a year from the date the act came into force;
  • - in case a lawyer engages in legal transactions on behalf of a client requiring a notary's record (special form), the power of attorney must be granted in the same form of a notary's record which would have to be drawn up by a notary in the Czech Republic; 
  • - cancellation of the rule that made it mandatory to establish a statutory reserve fund from net profit for companies in this country;
  • - allowance of choice between complying to the new Corporations Act or remaining governed by the old Czech Commercial Code; companies must decide until the first month of 2016;
  • - joint stock companies will be free to decide if their properties and business activities are to be administered by a board of directors and a supervisory council or by an administrative one.
Our specialists in company formation can help you with setting up a company in the Czech Republic and comply with the new rules of the Company Act.
More details on the Czech Company Act are available in the following video:


Regulations for the LLC in the Czech Republic

The new law introduces the new minimum registered capital to incorporating a limited liability company of only CZK 1, comparing to the old CZK 200,000 (about 8,000 euro).
The memorandum of association could allow the representation of ownership interest through a common certificate ("kmenový list"). For transferring a certificate of this kind you only need an oral agreement, endorsement and hand-over.
The in-kind (non-monetary) contributions will not need to be appointed by the court anymore.
If you need guidance through the process of opening a company in the Czech Republic, feel free to ask our agents for counsel.


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