The last parts of the amendment of Act No. 89/2012 Sb., Civil Code (the “Civil Code”) and of Act No. 304/2013 Sb., on public registers (the “Public Registers Act”), which introduces records of trusts in particular (the “Records”), became effective on 1 January 2018. As the amendment is bringing about significant changes in the operation of trusts in Czech Republic (the “trust”), we recommend you take a closer look.
By enacting the Records, the legislature seeks to establish a certain degree of transparency in the relationships created by a trust. The interest in raising the transparency has already been articulated on the EU level and is closely connected to efforts to prevent financial system abuse or, more precisely, to curb money-laundering, which potentially benefits from the so far opaque ownership structures.
Who keeps the Records and what is recorded?
The duty to keep the Records lies with the register (regional) courts. The Records include among other things the trust’s name, purpose, date of its formation and termination, identification number, the trustee’s identification data, number of trustees and the way they act on behalf of the trust, the founder’s identification data, and the beneficiary’s identification data.
Who has access to the Records?
The Records are only partially public, i.e. the public can only see the trust’s name, date of its formation and termination, identification number, the trustee’s first and last name and delivery address, the number of trustees and the way they act. Further data on the trustee and other registered persons (founder, beneficiary, person supervising the trust administration and other persons exerting a decisive influence) will be published only upon their consent. A full copy containing all recorded data will be provided only to the trustee and the persons who have proved their legal interest. Under given conditions, enumerated entities (public authorities in particular) will be granted remote access to these data for carrying out identifications and checks.
Joyful news to conclude with: fees and time limits
What can be viewed as rather positive news about the Records is the fact that registration and changes in the Records are exempt from court fees. On the other hand, a duty has been enacted to submit an application to register changes in the Records within 15 days from the relevant fact, and the trustee is responsible for maintaining the trust records in line with reality.
Last, it must be noted that a trust which was formed before this amendment came into effect has the duty to register in the Records within six months from the date the amendment takes effect. If it fails to do so, the trust administration will be terminated. Naturally, our team of experts specialising in this area is ready to assist you both in forming a new trust under the new regulation and in registering an already existing trust in the newly established Records.