In this article, you will learn about:
- the types of business companies that can be established in the Czech Republic, and
- the procedures to follow.
Different types of business companies differ in legal obligations, the process of establishment, and liability.
For foreigners who wish to establish a company in the Czech Republic, the most common choice is:
- a limited liability company (s.r.o.).
Therefore, this article will focus on s.r.o. and briefly describe the basic steps to establish such a company.
However, it is also possible to establish:
- a joint-stock company (a.s.),
- a public trading company (v.o.s.),
- a limited partnership (k.s.), and
- a cooperative.
We will look at the remaining forms of business companies in another article.
Limited Liability Company (s.r.o.)
You can establish a limited liability company alone or with more partners. In the case you have only one partner, you need a Founding Deed. More partners establish an s.r.o. through the Articles of Association. To draft the Founding Deed or the Articles of Association, consult a lawyer or a notary.
Basic Capital
The basic capital is set at a minimum of one Czech Crown (CZK) and is composed of the business shares of the founders. Each partner participates in the business according to the amount of their share. For multiple partners, each must contribute at least 1 CZK, and each partner is liable for the company's obligations up to the amount they contributed.
Management of s.r.o.
A limited liability company is managed by a director,or directors, who are authorized to act on behalf of the company and represent it in relation to third parties. They conclude business contracts on behalf of the company, hire new employees, or make decisions about financial transactions.
Decision-Making
The company makes decisions by the general meeting, which consists of all partners. Its authority includes decisions about appointing or removing directors, changes to the basic capital, or amendments to the Articles of Association.
Establishment of s.r.o. by a Foreigner
You can become a partner and director of an s.r.o. even if you are a foreigner residing in the Czech Republic under temporary protection. Residence permits in the Czech Republic are not required. However, you must prove your clean criminal record by providing an extract from the criminal record of the Czech Republic and your country of origin (from Ukraine). An extract from criminal records is not required if you become only a partner.
First Steps
First, you need to:
- determine the type of activity the s.r.o. will engage in,
- who the partners will be,
- what their business shares will be, and
- choose the company's registered office and director.
The registered office must be located in the Czech Republic and must be properly marked with the company name and identification number (IČ), which will be assigned pto the company after its establishment.
Trade License
The company's director must apply for a trade license for the chosen type of business activity that the s.r.o. will conduct. You can find more information in the article on Business (Podnikání).
Commercial Register
Subsequently, you must submit all the documents to the Commercial Register to record the company. Once your company is registered in the Commercial Register, the Ministry of the Interior will create a data box for your s.r.o., which will be used for official communication with relevant authorities. Registration with the tax office will take place through this data box.
Source of Information:
www.businessinfo.cz - https://www.businessinfo.cz/navody/obchodni-korporace-zalozeni-a-vznik-ppbi/
https://infocizinci.cz/