Glossary of terms

Defined for JSC and Ltd. where it is obligatory to create the reserve fund from net income for the current accounting period after taxation.

The reserve fund is one of the liabilities in the accounting and one of own resources  of company assets. The reserve fund can only be used to cover losses.

Beyond the scope of the general provisions of the use of the reserve fund provided for in § 67 goes the provision of § 216a.

Reserve Fund may be applied under certain conditions, to increase the share capital. The loss is if the financial statements show that the company's costs are higher than its revenues. The company has no obligation to cover the loss using the reserve fund. The reserve fund may not be made up of funds deposited with a bank or fast liquid property values, may not be established since the establishment of the company.

The reserve fund can also be created by a partnership, then use of its funds is not earmarked.

The prerequisites for the establishment of a trade license are determined by the fact that only natural persons can meet them - the institute of the responsible representative, i.e. the natural person appointed by the entrepreneur who:

• Is responsible for the proper operation of the trade and for compliance with the trade licensing regulations,
• Must comply both with the general and special conditions of the operation of the trade according to the type of business operated,
• They must participate in the trade to the extent necessary,
• Must have permanent residence in the territory of the Czech Republic