It is crucial to elect a corporation that conveniences your business plan or is an inclination of the founders. The requirements consist of a minimum number of founders, the financial liability of members and internal organization of a corporation, and a minimum registered capital. Limited-Liability Company is the most commonly utilized type of entrepreneurship in the Czech Republic.
The distinctive forms of commercial companies and cooperatives include Limited Partnership, Unlimited Partnership, Limited-Liability Company, and Joint-Stock Company. All of the above corporations are registered in a Commercial Registry; no company can be established without it.
Different Types of Companies
The primary legislation of business corporations are the Civil Code (Act No. 89/2012 Coll.); Business Corporations Act (Act No. 90/2012 Coll. on Commercial Companies and Cooperatives); and, Public Registers Act (Act No. 304/2013 Coll. on public registers of legal and natural persons). Below are the forms of business and the necessary details required to know when establishing a company.
- Limited Partnership: The minimum required to start-up capital is at 0 CZK while the minimum number of founders is two, with one being unlimited and general partner of partnership’s obligations and another being a limited and exclusive partner to the degree of their unpaid endowments. All general partners automatically become managers as a default regulation.
- Unlimited Partnership: The minimum required to start-up capital is at 0 CZK while two minimum founders are necessary. The financial liability is unlimited, and there are no obligatory management bodies as all partners automatically become managers by default regulation.
- Limited-Liability Company: The minimum required to start-up capital is at 1 CZL, while the minimum number of founders is one. The partners included in this corporation have limited liability to the degree of their unpaid endowments. The management and interior organization of this corporation include General Meeting, statutory body, supervisory board (optional), one or more Directors, and many others involved in the partnership agreement.
- Joint-Stock Company: The minimum required to start-up capital is at 2,000,000 CZK (80,000 EUR) with the minimum number of founders at one. The shareholders of this corporation are not personally liable for the company’s commitments. The management and interior organization of this corporation include two distinct systems. The Monistic System: General Meeting, statutory body and Manager, and Administrative Board, Dualistic System: General Meeting, statutory body, Supervisory Board, Board of Directors, and any others included to the statutes.
- Cooperative: The minimum number required to start-up capital is at 0 CZK with the minimum amount of founders at three. The members of this corporation are not personally liable for the cooperative’s commitments. The management and interior organization of this corporation include Members Meeting, Board of Directors, statutory body, Auditing Committee, and many others involved in the statutes.
Steps for Establishing a Company
The following steps are commonly utilized for all the above corporations and have distinct requirements to which you must follow accordingly.
Step 1: Establishment
To begin, you must know that the Memorandum of Association creates corporations; when a capital company is established, there must be a type of notarial deed. The cost of preparing the deed is charged in agreement with the notarial tariff while the notarial deed is established on the facts and documents submitted by the members.
The deed of the foundation must permanently include at least the individual’s legal name, objects of activities, registered office, the form of the statutory body and the manner of its institution; there may be other requirements based on the type of corporation. Each legal acts governing the institution, modification, incorporation, dissolution, or any other business corporation must be in writing form with certified signatures which can be completed at the Post Office or the Municipal Office.
Step 2: Incorporation
Once step 1 is completed, it must be registered in the Commercial Registry. If you’re registering your company through a Register Court, the specific form for this is accessible on the website provided, then submitted in electronic or paper form. The application must be turned into the competent Register Court, meaning a Regional Court.
However, registering a company through a notary is distinctive. This method is most commonly used and highly recommended for Limited-Liability and Joint-Stock Company as these companies are required to have the Memorandum of Association in the form of a notarial deed. If the documented information established on a notarial deed, the notary should contain the incorporation in the Commercial Register. This method is cost-efficient and completed much quicker.