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Loss of legal use title to premises does not necessitate the deletion of the company’s seat from the Commercial Register in the Czech Republic

The fact that a company no longer has proper legal grounds to use the premises where its seat is installed, does not trigger the obligation to request the deletion (or change) of the address of the company’s seat which is registered in the Commercial Register.

The complainants, as the owners of premises entered in the Commercial Register as the seat of a company, sought the deletion of the company’s seat when that company no longer had a legal title to the use of the registered premises. The register court had dismissed the motion for deletion of the company’s seat and the high court upheld this decision.

Under the current legal regime, the loss of legal title of use to the premises where the company’s seat is installed in fact no longer gives rise to the obligation to file a motion for deleting (or changing) the entry of the company’s seat in the Commercial Register. As before, so after 1 January 2014, if the company no longer has a title to using the premises where its seat is installed, the decisive fact (which determines the moment in which the composite time period pursuant to Sec. 11 (2) and (3) of the Registers Act begins to run) is the company’s own decision (or, as it were, the decision by its relevant body) on the change of its seat. However, now as then, it is true that if the legal reason for using the space in which the company’s seat is installed no longer exists, the company is under a statutory obligation to decide on a relocation of its seat, for it indeed must have a legal title to use the premises in which its seat is ostensibly located, and must retain this legal title throughout the time period during which that address is on the record in the Commercial Register as the location of its registered seat.

If the Company fails to decide on a relocation of its seat under these circumstances, the entry in the Commercial Register would be in violation of mandatory provisions of the law. If the register court were to learn of this fact, it would call upon the company to make remedies within a specified reasonable time period. Failure to remedy the situation would force the court, in the interest of protecting third-party interests, to order the dissolution and liquidation of the company.

Source:
NS 27 Cdo 2277/2020.