Establishment and formation of commercial companies and cooperatives

In the Czech Republic, there are limited liability companies:

  • limited liability company
  • joint stock company

and partnerships:

  • public company
  • limited partnership

In addition to commercial companies, cooperatives and European forms of companies (European Company, European Economic Interest Grouping, European Cooperative Society) are also established.

Commercial corporations - a collective term for commercial companies and cooperatives.

The most commonly used form of business corporation is the limited liability company, which is a suitable form for small or medium-scale business activity. For large-scale business ventures, a joint stock company is the appropriate form.

Business corporations are formed in two steps:

  • incorporation - the taking of a founding legal act, which is e.g. a memorandum of association in the case of a limited liability company
  • registration of the corporation in the Commercial Register - formation of the corporation

Both steps can be performed in immediate succession if the founding act is adopted in the form of a notarial deed. In such a case, the notary drawing up the constituent deed shall, upon request, enter the corporation in the commercial register by means of direct access. This eliminates the need to file a motion for registration with the court, which entails a five-day period for reviewing the motion and its annexes. In the case of a limited liability company or a joint stock company, the form of the notarial deed for the constituent legal act is required by law in all cases (Act No. 90/2012 Coll., on Commercial Companies and Cooperatives (Commercial Corporations Act)).

It is also possible to incorporate a company in its entirety online on the basis of an electronically drawn up notarial deed. It is a prerequisite that the founder has an electronic ID card or bank identity.

Before incorporating a company, it is advisable to consider the basic elements relating to the company:

  • its name (professionally, a trade name)
  • registered office
  • business object
  • amount of share capital
  • designation of a deposit manager, which may typically be one of the founders
  • any adjustments to the internal relations (e.g. pre-emptive right to the shares of the other shareholders)

The notary's fee for the notarial deed of incorporation, possible registration in the Commercial Register and related acts is charged according to the notary's tariff.

The current legislation does not link the establishment of a company with the necessity of prior establishment of a trade license. This is established in the case of an announcement trade by its announcement, and in the case of a licensed trade by the legal force of the decision on granting the concession.

The individual objects of business and information on whether the trade is a declared or licensed trade is derived from the annexes to the Trade Licensing Act (Act No. 455/1991 Coll., on Trade Licensing, as amended).

Notifiable trades are further subdivided into free trades, craft trades and bound trades. In the case of a craft or bound trade, in addition to the declaration itself, proof of professional competence is required. Obtaining a trade licence can be done in person at the trade office or by electronic submission. In the case of a limited liability company with a share capital of up to CZK 20 000, there is also no need to make deposits into a special bank account.

The Ministry of Industry and Trade declares that the information contained in the Database of Information Obligations is of a general informative nature only and does not constitute a binding legal norm in itself. The Ministry of Industry and Trade is not liable for the accuracy and completeness of the information and data contained in the database or for any damage caused as a result of the use of the information contained therein.

In addition to Czech, the information on the website is also available in English, German, Ukrainian and Vietnamese. The Ministry of Industry and Trade is not responsible for the literal translation of the outputs from the DIP website into English/German/Ukrainian/Vietnamese, as this is handled automatically using the applications DeepL and Google translator.

In the future, it is planned to add additional features, e.g. connection with the Entrepreneur Portal or AI (artificial intelligence) involvement.

The Ministry of Industry and Trade is the administrator of the database, which is supported by the Expert Group of the Ministry of Industry and Trade for reducing the administrative burden on entrepreneurs. The information in the database is continuously supplemented and updated by the relevant authorities (selected ministries and other institutions) on the effective date of the changes.

The Information Obligations Database project is part of the National Recovery Plan, from which it is funded.