As of 1 January 2014, the Act on Public Registers, No. 500/2013 Coll., took effects. The act replaces the provisions of the previous Commercial Code, which was repealed, on the registration of companies and co-operatives, and further provides for the legal framework for the registration of societies, foundations and similar entities with legal personality and introduced several important changes for persons registered in these registers.
The changes introduced by the act are complex. Hereafter, we shall mention only the most interesting changes in our point of view.
Registration by public notaries
Formerly, only regional courts were entitled to carry out the registrations in the Commercial Register. According to the Act on Public Registers, registration may be performed also by the notaries on the basis of notarial deeds, provided such deed was drafted by the notary who carries out the registration and under the following conditions:
- The facts to be registered are confirmed by the notarial deed;
- The mentioned notarial deed includes a statement of the notary, that the legal act and the facts to registered are in accordance with the mandatory law and the corporate documents of the respective entity (who requires the registration);
- All legally required documents were presented to the notary;
- The registration is requested by an authorized person.
The registrations may be done through a remote access to the Commercial Register and, therefore, should be performed without unnecessary delay.
Unfortunately, the IT system of the Commercial Register is not yet upgraded to accommodate to the requirements for an online registration. According to the information provided by the Czech Notary Chamber, the expected commencement of the service shall not be before August 2014.
Increased penalties and supervision on fulfillment of obligations.
The Act on Public Registers also provides for more severe monetary penalties from CZK 20,000 to up to CZK 100,000 for the non-fulfillment of the prescribed obligations vis-a-vis the public registers. In case an entity breaches the obligations repeatedly, or in case a specific breach of obligations has severe consequences, the court may decide on the dissolution of the entity.
The Act on Public Registers further stipulates that the non-fulfillment of the obligations shall be deemed as a breach of the duty of due care of the statutory representative of the respective entity.
It is worth mentioning that according to the accompanying notes to the Act on Public Registers, the upgraded IT system should generate automatic notifications to the court on the non-fulfillment of the obligations, such as filing of annual reports that need to be lodged at the collection of deeds.
In relation with the breach of the obligations arising from the Act on on Public Registers, other sanctions may be assessed according to the Criminal Code, the Offence Act or the Accounting Act.
Conformation with the new Act within six months
The transitional provisions of the Act on Public Registers prescribe that the registered entities shall make necessary changes to conform with the requirements of the said act within six months from the date of effectiveness (i.e. by the end of June 2014), respectively three years in case of societies (“spolek”). In the opposite case and if the changes are not performed despite an additional notice issued by the court, such entity may be struck down by a court decision.
The purpose of this material of free distribution is to highlight the interesting current legal topics, not to provide comprehensive legal advice. Readers are advised to contact a qualified advisor in case of interest. Although the preparation of this material was given due care, we cannot assume any responsibility for actions taken on the basis of the information contained therein.