Recodification Guide for Entrepreneurs No. 4

Limited liability companies (S.R.O.) are the most popular form of business company in the Czech Republic. There are about 20 000 new ones incorporated every year. Hence, there’s no wonder that the comprehensive recodification contains regulation of their legal status as well. The new Civil Code and, in particular, the Business Corporations Act, change a wide range of currently valid and familiar rules of corporate governance of limited liability companies, legal status and decision-making of their Managing Directors, as well as the concept of business shares and their dispositions. Our previous Recodification Guide outlined in detail the general regulations of incorporation, the acting on behalf of a company, business enterprise and dispositions, as well as the status, rights and obligations of corporate officials. Based on information from previous issues, this issue highlights the most important changes in the regulation of limited liability companies,. We describe not only those changes affecting the existence of these companies that cannot be avoided, but also those that are voluntary and which can be used by companies to make their functioning and decision-making more efficient.

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