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Glossary of terms

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Investment Company

An investment company is a legal person whose scope of business is the collective investment based on:

  • Creation and management of mutual funds, or
  • Management of investment funds under the management contract.

The investment company must have a permission of the Czech National Bank (CNB), the firm contains designation "investment company". The CNB shall grant authorization only to such a JSC which

  • Issues only registered shares
  • Whose headquarters and real seat is in the Czech Republic
  • Which submits a business plan and design of the organizational structure of the investment company
  • Has paid up share capital

Investment company may not issue bonds. An investment company may manage assets in a mutual fund of other investment company or property of an investment fund, which has not concluded a management contract.

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Investment contribution to the company

A summary of the values entered in the company to acquire or increase participation in the company.

The contribution may be tangible or intangible asset, which is capable of being the subject of civil relations, is transferable, and is appreciable in money.

Contribution can be:

  • monetary
  • non-monetary - only estate which can be of economic use in relation to business activities of the company and the economic value of which is economically valuable

Contribution may also be:

  • Real estate (only if the company will have the seat or workshop there or it is real estate agent etc.).
  • Business (part; contract for the investment to the company)
  • Know-how
  • Security (company must be a bank, investment fund, dealer in securities, etc.)
  • Receivable
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Investment fund

Investment fund is a legal person whose scope of business is collective investment (later change of the scope of business is not possible). The firm includes a supplement closed-end investment fund.

Funds are collected from the public by subscription of shares. The activities of the investment fund must be authorized by the Securities  Commission (similarly to the investment company) and may only be applied for by the founders of the joint stock company that have not yet been created.

This joint-stock company must not be established on the basis of a public offer of shares. The Investment Fund may only issue shares of the same nominal value, and their transferability shall not be restricted. It may not issue, for example, interim letters, priority shares, bonds.

The share capital of an investment fund that does not have a management contract must amount to at least EUR 300,000 at the time of the license is issued.

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