In March, an annual legal obligation to prepare the Report on relations arises for many companies that are a part of the corporate group.
Report on relations in particular:
- describes the structure of the relations between the controlled and the controlling parties;
- lists the contracts concluded between the companies within the group;
- contains an assessment on the damage incurrence in the controlled party and the method of its compensation.
Who is obliged to prepare such report?
Report on relations shall be prepared by the statutory body of the controlled party within 3 months after the end of the accounting period at the latest and it shall be reviewed by the supervisory body (if appointed). Finally, it shall be submitted to the Collection of Deeds of the respective registry court without undue delay.
If the financial statements of the business corporation are audited, the Report on relations shall be part of the Annual Report. In case this obligation to prepare the Report is breached, the company may face a disciplinary fine up to CZK 100,000.
We would be pleased to prepare the Report on relations for you in compliance with all legal requirements as well as to provide its submission to the Collection of Deeds of the respective registry court.
Please keep in mind that if the fiscal year of your company ended in December 31st, 2019, the Report on relations shall be prepared until March 31st, 2020.