PHONE: +420 222 315 255

MON-FRI: 9.00 - 17.00h

Glossary of terms

Select the first letter of the search phrase:

Enterprise

For the purposes of the Commercial Code, the enterprise is understood as a set of tangible as well as personal and intangible components of the business.To the enterprise belong the rights and other property values belonging to the entrepreneur and are used for the operation of an enterprise or because of their nature they should serve the following purpose:

  • Material component (buildings, machinery, materials and other things)
  • The personalcomponent (depends mainly on the level of the entrepreneur, the managerial staff and the structure, qualification and experience of the employees and other persons involved in the business)
  • Intangible (constituted by rights and other property values)

Entrepreneur

Entrepreneur - according to the definition contained in § 2 of the Commercial Code - a business is defined as a systematic business activity conducted by an entrepreneur independently in his own name and on is own responsibility for profit. Second paragraph contains an additional criterion, making the list of four groups of entrepreneurs:

  • Entrepreneur is any person registered in the Commercial Register - commercial companies, cooperatives, other legal persons as provided by law and foreign persons. According to § 3 paragraph 2, a natural person may be registered in Commercial Registry at his own request
  • Entity running a business under a trade license
  • Entity running a business on the basis of other than trade license
  • Natural person engaged in agricultural production by optional rules


Entrepreneur is not a person who carries out a particular profession as an employee or as a companion of commercial company - does not carry it independently. With regard to the representation of another legal person, our legislation does not solve the problem, whether an agent is an entrepreneur. On the one hand, defines the business, on the other hand, sees entrepreneurs as well as those who represent another (agency agreement, contract of commercial representation are regulated as relations between businessmen).

Summary: 

Entrepreneur is a person who is authorized to carry out a business, or is registered in the Commercial Register.

Entrepreneur is a person who is authorized to carry out a business, or is registered in the Commercial Register. It should be noted, however, that a joint-stock company and Ltd. can be established without the business objective. They are registered in the Commercial Registry - they are entrepreneurs by legal form.

Read more

Establishment

Establishment is the room in which certain business activity is carried out.

Definition of the Commercial Code is very broad, the establishment in this definition means (any) space "within which the business activities are carried out" - there is no connection with the authorization to do business in this space (resulting from the ownership or lease, etc.) and could mean that the establishment could became the space illegally occupied by entrepreneur.

In a similar way, the establishment is defined by the Trade Licensing Act, § 17 paragraph 1, although it is defined only for a trade - specifically declares a establishment also stand, mobile shop and similar devices used for the sale of goods or provision of services. Establishment within the meaning of the Trade Licensing Act does not include an establishment in which the activities other than those of the tradesmen take place. For example, doctors' or lawyers' offices, tax consultants, etc. are not trade licensing establishments, but will be establishments within the meaning of § 7 of the Commercial Code - public obligations of the Trade Licensing Act are not applicable for other than trade establishment.

The establishments must be labelled by the firm of the entrepreneurs, which may be completed by the name of the establishment or other distinctive signs.

Read more

Establishment of a Cooperative

Those interested in establishing a cooperative shall authorize the convener in writing (which may be only a natural person) to draw up the statute of the cooperative. The statute must be in the form of an authentic instrument (notarial deed) and must contain at least the obligatory particulars (company name, registered office, subject of business or activity, amount of the membership fee, method and term of its payment. Otherwise, the court will find it void on its own motion. The adoption of the statute and its amendment is decided by the member (or constitutive) meeting, which is always public.

 

Establishment of a European company (SE)

The SE Regulation specifies how to establish the European company. It does not allow it to be based on a "green field." Establishment is only possible within the reorganization of selected existing forms of business - in addition, it is necessary to monitor which forms of companies can participate in it and what other requirements must be fulfilled.

Ways of establishing the SE:

  • Merger two or more JSC or SE, which are based on the law of the EU Member States and have their registered office in the EU, if at least 2 of them are governed by the law of different member states (establishment via fusion).
  • As a holding company over two or more existing JSC or SE or Ltd., which were established under the law of one of the states and have their registered office in the EU if at least 2 of them are established under the law of different Member States or have at least two years a subsidiary or an organizational unit of an enterprise in the territory of a Member State other than the State by the law of which it is governed (Holding e.s.).
  • As a subsidiary of at least 2 companies within the meaning of Article 48 of the SES (including SE), which were established under the law of an EU Member State and have their registered office in the EU if at least 2 of them are established under the law of different Member States or have for at least two years a subsidiary or an organizational unit of an enterprise in the territory of a Member State other than the State by the law of which it is governed (subsidiary or joint venture es)
  • Transformation of a JSC based on the law of one of the EU Member States, if its registered office are located in the EU if it has a subsidiary for at least two years in the territory of another Member State.
  • As a subsidiary of another SE

Restrictions only form a formal barrier for entities that do not meet the prescribed conditions. Conditions can be circumvented (eg by establishing formal JSC only for the purpose of establishing the SE).

Read more

Establishment of a European Cooperative Society (SCE)

Art. (2) of the SCE Regulation deals  exhaustively with the ways in which the SCE can be established. The so-called  transnational element is needed. An SCE can be established:

  • Mergers of national cooperatives under the law of a state whose registered office and principal administration are located in the EC territory, if at least 2 of them are governed by the law of different member states.
  • Transformation of a cooperative having its registered office in the EC if such a cooperative has at least two years a subsidiary which is governed by the law of another Member State. It may arise even if the national cooperative has at least two years at least the organizational unit of an enterprise in another Member State (difference from SE)

The SCE Regulation also permits the SCE to be set up as a new entity:

  • By at least 5 natural persons in the territory of at least 2 different member states
  • By at least 5 natural persons and companies within the meaning of Article 48 of the SES and other legal entities established under the law of a Member State which are resident in the territory or governed by the law of at least two Member States
  • By at least two companies within the meaning of Article 48 of the SES and other legal entities established under the law of a State which is governed by the law of at least two different Member States.

Establishment of a European Economic Interest Grouping (EEIG)

The EEIG is established by a consortium agreement and is established on the day of its  registration. The contract must include:

  • Company name, the company must include the European Economic Interest Grouping or EEIG,
  • Domicile - on the registered office depends which law will be applicable in the alternative, it may be only in an EU Member State, it may be just the place where the main EEIG management or the main management of the member of the EEIG which is a legal person or, if a natural person, where he / she carries out his / her main activity if the EEIG also carries on business,
  • The scope of activities of the EEIG
  • The designation of a member of the EEIG - a Member State may provide that the EEIG may not have more than 20 members (restrictions are governed by the law of the association's headquarters) and that certain groups of entities may not charge membership, only under specified conditions (limitation by the law of the State to which the person concerned is subject)
  • The duration of the EEIG unless otherwise stated in the contract, is based on an indefinite period of time, the EEIG Regulation expressly prohibits the contract from adjusting in advance the amount of the rights and obligations of a member upon termination of membership.
  • Formal requirements - written form, notarial deed nor official signature verification is not required. The Member State cannot make any further requirements.

Establishment of a joint stock company

Only one person may set up a joint stock company if it is a legal person (the concentration of shares in the hands of 1 natural person is not a reason for cancellation of a JSC or the cause of its invalidity)

4 Steps to establish a JSC

  • Founding agreement (or founding document in case of only 1 shareholder)
  • Statutes of the JSC
  • Subscription and min. partial repayment of deposits
  • Collective decision on establishing JSC and on its statutes

Two ways of foundation:

  • One-off (simultaneous) - no public offer of shares
  • Gradual (successive) - with public offering of shares

Simultaneous establishment - founding of the JSC without public offers of shares

Founders will be obliged to repay the entire share capital, there is no underwriting of the shares or establishing general meeting (instead of it, the founders decide together). Founders have to pay the entire share premium (= the difference between the nominal value of the share and its selling price), 30% of all shares (when repaying with cash deposits) and fully repay the non-cash deposits prior to the registration. Here too, it is necessary to make a notarial deed (also if the simultaneous method is used by one founder), the share capital here is min. 2 million CZK.

Successive way of establishing of a JSC. - establishing JSC on the basis of a public offer of shares

Used if founders cannot, or do not want to subscribe the entire share capital. Part of the share capital, which exceeds the sum of the value of their deposits, is thus subscribed to by shares (by public offer). The share capital must be min. 20 million (if the JSC with a capital of less than 20 million increases its capital by public offer, it must be increased to this amount at minimum).

Read more

Establishment of Limited Liability Company (Founding of s.r.o., Ltd.)

Founders (associates) - natural persons and legal entities, min. 1 and up to 50 founders (members), one-person Ltd. however, ca not be the sole founder (partner) of another company, 1 natural person may be the sole shareholder of max. 3 Ltd.

Founding s.r.o. - a social contract (a founding charter - if there is only one founder)
form - notarial deed
essentials:

  • Firm (with mandatory addendum) and registered office of the Ltd.
  • Partners - firm or name and registered office of the legal entity (including ID and place of business) or name and domicile of natural person (incl. personal ID)
  • The scope of business or activity (Ltd. can be set up for non-business purposes - fictive or formal PL) - scope of business can also be activities which can be performed only through persons with special justification (§56 / 3; however, the performance of these activities in the form of Ltd. does not deprive these persons of personal and unlimited liability for the proper performance of professional activity based on special regulations - it is then a joint liability of the Ldt. and above mentioned persons)
  • Amount of share capital and the amount of the contribution of each partner (including the manner and time of repayment of the deposit, in the case of non-monetary deposits, their subject and the amount to be credited to the shareholder's contribution, and the price according to expert's opinion)
  • Names and residence of the first directors of Ltd. and the way they act on behalf of the Ltd. (in the case of other executives, how many will be and the manner of negotiations on behalf of Ltd.)
  • Names and domicile of members of the first supervisory board (if established)
  • Determination of the deposit manager
  • According to the practice and the arrangement on the reserve fund (see §124 / 1)
  • Other data according to the Commercial Code
  • Officially verified signatures of all founders

Company establishment – registration in Commercial Register - conditions:

  • Submission of the proposal
  • Business license
  • Fulfilment of the deposit obligation in the legal scope (total capital of at least CZK 1,-, non-monetary deposits fully repaid, each monetary minimum of 30%, repayment of the entire issue); if 1 founder, then in full (non-cash contributions require expert opinion of 2 experts)
  • Proof of the legal reason for the use of the premises in which the Ltd. has a registered office
  • The proposal shall be signed (officially certified) by all directors (the proposal is filed on behalf of Ltd.); with the proposal are connected data about facts recorded in the Commercial Register pursuant to §28 of the Commercial Code, incl. documents in the collection of documents (in particular the social contract, proof of fulfilment of the mandatory extent of the repayment of deposits, expert opinion valuing non-cash deposits). In OR with Ltd. enters into section C.
Read more

Establishment of Limited Liability Company (Founding s.r.o.)

Founders (associates) - natural persons and legal entities, min. 1 and up to 50 founders (members), one-person s.r.o. however, cannot be the sole founder (partner) of another company, 1 natural person may be the sole shareholder of max. 3 s.r.o.

Founding s.r.o. - a social contract (a founding charter - if there is only one founder)
Form - notarial deed

Essentials:

  • Firm (with mandatory addendum) and registered office of the s.r.o.
  • Partners - firm or name and registered office of the legal person (including ID and place of business) or name and domicile of natural person (incl. personal ID)
  • The scope of business or activity (s.r.o. can be set up for non-business purposes - fictive or formal PL) - scope of business can also be activities which can be performed only through persons with special justification (§56 / 3; however, the performance of these activities in the form of s.r.o. does not deprive these persons of personal and unlimited liability for the proper performance of professional activity based on special regulations - it is then a joint liability of the s.r.o. and above mentioned persons)
  • Amount of share capital and the amount of the contribution of each partner (including the manner and time of repayment of the deposit, in the case of non-monetary deposits, their subject and the amount to be credited to the shareholder's contribution, and the price according to expert's opinion)
  • Names and residence of the first directors of s.r.o. and the way they act by s.r.o. (in the case of other executives, how many will be and the manner of negotiations on behalf of s.r.o.)
  • Names and domicile of members of the first supervisory board (if established)
  • Determination of the deposit manager
  • According to the practice and the arrangement on the reserve fund (see §124 / 1)
  • Other data according to the Commercial Code
  • Officially verified signatures of all founders
Read more
Libroten
ProfiSídla
ProfiSpolečnosti.cz
Valian
ARSYLINE 2016
Warning

Close