Recodification Guide for Entrepreneurs No. 2
Business companies are the standard and widely used form for running business in the Czech Republic. There were more than 350,000 companies in the Czech Republic last year and these will be affected by the upcoming recodification as well. As of 1 January 2014, when the new regulation becomes effective, there will be significant changes in the founding and the functioning of business companies, as well as of other legal entities. In connection with these changes, there will be a large number of new restrictions and obligations applied to companies and their statutory bodies, primarily targeted to strengthen the protection of creditors, shareholders and companies itself (to ensure proper management of companies’ property through their bodies). In addition to various obligations, the recodification introduces many new rights and concepts that are new to Czech law and which should allow companies to adjust their organizational structure, corporate governance and management to their specific needs. For this reason, we will present the most important changes in the general legal framework of company law in this and in the following issue of our Recodification Guide. The consequences of the outlined changes will affect all existing companies. In a relatively short period of time they will be forced to bring their Deed of Association in line with the new rules. Companies should not leave anything to chance and prepare for the re-codification even now.
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- Date: 01. 01. 2014