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Limited liability company in the Czech Republic (in Czech: Společnost s ručením omezeným | s.r.o.) is the most common form of business. This company exists independently of its shareholders, and it may be formed either by one person (a natural or legal person) or more persons (the maximum number of persons is not set).
A limited liability company (in Czech: Společnost s ručením omezeným | s.r.o.) is the most common form of business in the Czech Republic. This company exists independently of its shareholders, and it may be formed either by one person (a natural or legal person) or more persons (the maximum number of persons is not set).
|Supreme Body||General meeting; or
Sole shareholder who exercises the powers of the General Meeting
|Statutory Body||One or more executive directors|
|Supervisory Board (optional)||Optional body which supervises the executive directors, various documents, and accounts|
The incorporation procedure of a limited liability company in the Czech Republic consists of the following steps:
Adopting the Memorandum of Association / Foundation Deed by the Notary Public
Arranging consent to the provision of the company’s registered office address
Registering the necessary trade licences of the limited liability company in the Czech Republic
Opening a bank account for contribution payments
Registration of the company in the Commercial Register of the competent District Court
The incorporation time of a limited liability company in the Czech Republic is approximately 1-2 weeks after receiving the incorporation documentation.
We will prepare all the necessary documents and advise you on the formalities (e.g., notarisation, legalisation).
We will incorporate the company and proceed with all the steps under the powers of attorney granted to us.
Once the limited liability company in the Czech Republic is duly incorporated, we will guide you through all the necessary steps and registrations and help you with them.
Does an executive director of a limited liability company in the Czech Republic have to be of Czech nationality?
No, the executive director can be of any nationality.
Can we incorporate the limited liability company in the Czech Republic remotely or is your personal presence required?
All but one of the steps can be arranged remotely by a power of attorney. The only step that requires personal presence is the opening of a current bank account once the company is duly incorporated.
Is personal presence required for opening a current bank account?
Yes, the personal presence of the person who will be authorised to use the bank account (usually the executive director) is necessary. This is due to European legislation which sets strict conditions on KYC and compliance policy.
What is an Ultimate Beneficial Owner (UBO)?
The beneficial owner is every natural person who directly or indirectly owns more than 25% of participation in the capital or voting rights in the company; or who is entitled to a share of profit exceeding 25%; or who exercises actual control over the company on other grounds. Other grounds may refer to a partnership agreement, for example.
What is the time limit for registering the UBO after the incorporation, and what are the sanctions in case the UBO is not registered or is registered improperly?
The Czech law does not provide a precise time limit for the registration of UBO, however, it states that the registration should be made without undue delay. In practice, this usually means within two weeks after the incorporation.
Companies that fail to register the UBO without undue delay may face the following consequences:
What is a Data Box?
The Data Box represents a secure and state-guaranteed electronic communication portal, which can be used to communicate with authorities, courts or other entities, including private entities. It is a kind of e-mail box established upon the registration of each company. As part of our service, we can manage your Data Box and keep you informed of messages received and other necessary actions.
What is the corporate income tax for a limited liability company in the Czech Republic?
Corporate income tax is levied at a standard rate of 19%. Find out more about taxation in the Czech Republic in our dedicated tax guideline.
What is a director’s service contract on performance, and is a company obliged to conclude it with its executive directors?
The essence of this contract is to regulate the rights and obligations of the company and the members of the statutory body in their mutual relationship. In practice, this contract is usually concluded, but it is not obligatory. If the director’s service contract is not concluded, the relationship between the statutory body and the company is governed by the provisions of the Czech Civil Code.
*This list is not exhaustive
A joint-stock company is another form of business whose share capital consists of shares which are represented by securities. The company may be established by a sole shareholder. It may be formed by a private agreement to subscribe to all shares, or by a public offering.
A branch (in Czech: odštěpný závod) is a part of a company located in a different country from the parent or founding company. It is an economically and functionally independent part of the parent company, which is registered in the Commercial Register. It has its own registration number, registered office and its own accounts.