Pursuant to Section 128 (1) and Section 184a (1) of Act No. 513/1991 Coll., the Commercial Code, as amended, a general meeting (or a sole shareholder) of a limited liability company or a joint stock company approving ordinary financial statements must be held no later than six months after the last day of the accounting period, unless the Foundation Deed or the Articles of Association of the company require a shorter period.

If a company’s accounting period is done by calendar year, this obligation must be fulfilled by 30 June 2013. If a company fails to meet this obligation, there is a risk that the court will impose a fine and, in certain extreme circumstances, the company could be wound up.

According to Supreme Court case law, which although followed is widely known to harbour reservations from people, the general meeting must also come to a conclusion on the profit distribution figure within the same deadline. Thereafter, the general meeting is no longer authorised to decide on profit distribution. The Supreme Court ruling includes that where the general meeting has not approved the financial statement, members of the board of directors of a joint stock company or executive directors in a limited liability company cannot decide on payment of the dividend. If the executive directors or the board of directors decide on payment of the dividend despite approval by the general meeting, they are jointly and severally liable to return the dividend.

Where the company is obliged to have its financial statements verified by an auditor, the general meeting approving the financial statements should also appoint an auditor for the upcoming accounting period.

In addition, within three months of the end of each accounting period, all companies who are a ‘controlled entity’ and who have not concluded a controlling agreement are obliged to prepare a report on relations between related parties. If the accounting period coincided with the calendar year, the deadline for the report this year was 31 March 2013.

Any annual reports, financial statements and reports between related parties (if required by the law) must be filed by the company to the collection of deeds maintained by the relevant Commercial Register without undue delay.