Legal forms of companies are regulated in particular by the Czech Commercial Code. Under Czech law it is possible to set up six different forms of business companies, i.e. a general partnership, limited partnership, limited liability company, joint-stock company, European Company, and European Economic Interest Grouping. Establishment of the companies in Czech Republic is governed by the Civil Code (Act No. 89/2012) and the Act on Business Corporations (Act No. 90/2012).
A limited liability company (s.r.o.) is the most popular legal form of corporation in the Czech Republic.
The name of the company must be in Latin characters and must end with s.r.o to denote limited liability.
ARTICLES OF ASSOCIATION
It is necessary to adopt Articles of Association when founding a s.r.o. The company becomes a legal entity when it is formally entered in the Commercial Register. According to the Czech Commercial Code, the Articles of Association must contain the corporate name, the registered address of the company, the activities in which the Company will engage in, the amount of share capital and the share interest of each shareholder.
The number of shareholders in a Company may be from 1 to 50. A shareholder can be a physical or legal person of any nationality. Details of shareholders such as their name, address and nationality, are part of the public record, however they may avail themselves of a nominee service by appointing a nominee shareholder, which we can provide by virtue of an agreement or a Deed of Trust for a reasonable fee.
The registered capital of a company is composed of the contributions made by the shareholders. As of 1.1.2014, the minimum contribution of each shareholder to the registered capital is CZK 1, however it is recommended to set-up an s.r.o with a minimum of CZK 1,000.
A limited liability company does not issue shares. The ownership interest represents the shareholder’s participation in the company and the rights and duties derived from such participation. The size of the ownership interest is basically determined by the ratio of a particular shareholder’s investment contribution to the company’s registered capital.
A limited liability company does not have a board of directors. Its executive body is made up of one or more executive directors. The law does not restrict their number; but their number must be stipulated in the founder’s deed or the memorandum of association. The executive director is appointed by the general meeting (the supreme body of the company) or by the sole shareholder exercising the powers of the general meeting. Each executive director represents the company independently, unless the founder’s deed or the memorandum of association stipulate otherwise. The founder’s deed or the memorandum of association may stipulate that the executive directors form a collective body which will make the legal position of executive directors closer to that of the board of directors in a joint-stock company. A director does not have to visit the Czech Republic in order to complete the process of company registration.
REGISTERED OFFICE AND COMPANY SECRETARY
Czech companies must have their registered office in Czech Republic. There is no requirement for a company secretary.
Company meetings need not be held in Czech Republic.
The incorporation of a new company takes from 1 to 2 weeks.
RECURRING MAINTENANCE FEES AS FROM 2ND YEAR
Provision of Registered office.