Legal news

The Act on Provisions provides for the creation of various kinds of legally recognized adjustment items. For most companies, however, the following three types of adjustment items will have by far the greatest relevance allowances for receivables towards debtors in insolvency, allowances for non-lapsed claims payable after 31 December 1994, and allowances for "small" receivables of up to CZK 30,000.

Official e-mail addresses must be established by the end of August and registered on the Company portal. With introduction of electronic administration, companies must register a so-called “Company portal”, an online mailbox for electronic communication. Instead of the postal address, this will be the official address of companies for all correspondence with the authorities.

Liquidation is becoming an ever more popular method for getting rid of companies in which the owner/shareholder is no longer interested. In the past, obsolete companies which no longer pursued any operations were relatively frequently allowed a continued existence as an empty shell, but an increasing number of entrepreneurs nowadays prefers to voluntarily liquidate any company which they no longer need, and to delete it from the Commercial Register. The following article addresses the process for liquidating the most popular form of companies in the Czech Republic – the limited liability company pursuant to Czech law ("s.r.o.").

New rules on fiduciary collaterals introduced

One of the reasons for passing the amendment – in force from 1 July 2017 – was the uncertainty of application of certain provisions in connection with enforceability of claims secured by fiduciary transfer of ownership or assignment of claims (fiduciary collaterals).

The Czech Supreme Court found that managing directors who have been recalled continue to be liable for legal transactions which they take on behalf of the company after having been recalled, by the same standards as apply during their time in office. In this respect, it is of no concern whether or not the affected managing director knew of the fact that they had been recalled. The same legal consequences apply after a managing director has stepped down from his or her office.