company chooses to keep accounts in EUR. There are no requirements for a minimum shareholder contribution. The company is owned by one or more individuals or corporations. Both monetary and non-monetary (in-kind) contributions are allowed, namely real or personal property, certain intangible assets, and existing and documented debts owed to the founders. The value of in-kind contributions is subject to an official valuation. Before incorporating a new JSC, the premium and at least 30 percent of the nominal value of shares must be paid up. The outstanding amount must be paid up in line with the by-laws within one year from the incorporation of the company at the latest. The company itself is wholly liable with all its assets for any breach of its obligations. Shareholders in a joint-stock company are not liable for the company's debts. Certain “qualified” shareholders may exceptionally become liable for a company’s debts by applying the rules related to company groups, namely in insolvency, e.g., if they, through their control or influence, significantly affect the conduct of the company to the detriment of the company. Every joint stock company must have a website providing information about the company’s name, registered seat, business identification number and incorporation data with the Commercial Register including the section and file and publish various documents such as invitations to general meetings. 1.3 Limited liability partnership A limited liability partnership is a less frequently used corporate form. It must be founded by at least two individuals or

companies, at least one of which (“limited partners”) must contribute to the registered capital an amount set by the foundation document. Limited partners are liable for the company’s debts up to the unpaid amount of their contribution. However, if the name of a limited partner appears in the name of the company, the limited partner’s liability for the company’s debts is unlimited. On the other hand, the other partners (“general partners”) are not obliged to contribute to the registered capital. However, their personal liability for all the company’s undertakings is unlimited. 1.4 General partnership A general partnership must also be founded by at least two individuals or companies. Registered capital is not created, and all shareholders have an equal interest in the company, unless agreed otherwise in the partnership agreement. All partners are fully and personally liable for all the company’s undertakings. In addition to monetary and non-monetary (in-kind) contributions, partners can also contribute to the company’s capital by providing work or services if agreed in the foundation document. 1.5 Cooperative This legal form is not suited to the purposes of commercial undertakings. It is a traditional legal form frequently used for the ownership of private residential property. 1.6 Branch A branch, although it can be registered in the Czech Commercial Register, is not a legal entity. As it is not treated as a legal entity all legal acts taken by a branch are considered to be taken on behalf of its founder, which may be a foreign company. This may

ILN Corporate Group – Establishing a Business Entity Series

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