A limited liability company is the most common corporate form established by foreign investors in Czech Republic. The activity is governed by a Memorandum of Association, which is signed by all shareholders. It is essential to note that it is executed in a form of notorial deed of a Czech notary. The notary fee usually does not exceed CZK 5,000 (180 EUR) and is depending on the amount of the registered capital.

This founding deed must contain basic information about the company, and the business name must not be interchangeable with any already existing names of another company registered in the Commercial Register. The business name of the company can be searched for availability at www.justice.cz.

 

Business licence and scope of the affair

After concluding the founding, the initial executives of the company need to obtain the trade license at the Trade License Office unless the company’s business activity includes only management of own property, letting of real estate, residential units and non-residential units or a special permit is required. The administration fee for obtaining the trade license at the Trade License Office amounts to CZK 1,000 (EUR 40).

The founding deed may allow establishment of various types of business interests (shares) held by the shareholders of the company. Furthermore, the business interest of the shareholder could be represented by a common certificate issued as registered security. The shareholders of the limited liability company can own more than one business interest in the company.

 

Registered capital and payment of contributions

The minimum requirement for the registered capital of the limited liability company is CZK 1. However, it is recommended that founders agree on the higher amount of the company’s registered capital than the minimum amount.

A shareholder’s contribution into the registered capital is either in monetary or in-kind form. All contributions of the founders are managed by the first director. Monetary contributions are deposited into a special bank account established for such purpose. The in-kind contributions must be appraised by an expert. Before submitting the incorporation application, any in-kind contribution must be fully paid up.

 

Incorporation of the company

The incorporation application has to be submitted either by all executives of the company on the prescribed form or the registration can be performed through the notary who can register the company independently. The application must be submitted to the competent court depending on the location of the company’s registered office within six months from the company setting up; otherwise the founding deed becomes ineffective.

The registration court fee amounts to CZK 6,000. The fee amounts only to CZK 2,700 (EUR 100), if the registration is performed by the notary on the basis of the notarial deed which would contains only mandatory provisions and the contributions of the shareholders must be in cash.

The statutory deadline for registration of the company is five working days from submission of the application. If, within this period, the court does not approve the incorporation of the company or requests additional documents from the applicant, the company is considered as registered. The notary can incorporate the company almost immediately.