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either Czech or a foreign individual or company. As for the executive directors and members of various boards, they may be either a Czech or foreign individual or a company (except for a statutory director of a joint stock company or chairperson of the board of administrators, who must be an individual). Individuals must meet several requirements, for example, they must be 18 years of age, have a clean criminal record, consent with their registration, and fulfil other conditions imposed by law. Companies are in the performance of their function in a company’s body represented by an authorized individual representative who must fulfil the abovementioned requirements as well. Foreign nationals do not need a residence permit in the Czech Republic to be registered with the Commercial Register in a Czech company, though this may subsequently be required for non-EU nationals for living or working in the Czech Republic. 3.4 Protection of minority shareholders In a JSC, minority shareholders are those who own at least 3 percent of the registered capital if the registered capital is more than CZK 100,000,000, 5 percent of registered capital if the registered capital is CZK 100,000,000 or less, or at least 1 percent of the registered capital if the registered capital is CZK 500,000,000 or more. They are granted several minority rights, such as the right to ask the board of directors or the statutory director to summon an extraordinary general meeting to discuss issues proposed by them, or to have an issue proposed by them included in an ordinary general meeting, and the right to ask the supervisory board to examine the performance of the board of directors in matters determined by request.
They may, either through the board of directors or directly, require the payment of the outstanding part of the issue price from shareholders in default, or seek compensation for damage caused by members of the statutory body who have not acted with due diligence. They can also ask for the appointment of an expert to examine the report on relations between connected persons. They also have several rights during transformation procedures and squeeze-outs. The minority shareholders’ position may also be strengthened during elections of company’s bodies by “cumulative voting”. For the purposes of the election, each shareholder’s vote is multiplied by the number of elected members of the company’s bodies. A shareholder may then give all his/her votes to a single candidate or divide the votes among more candidates which gives minority shareholders a greater possibility of influencing the body’s composition. Additionally, shareholders in LLCs have similar rights, though the percentage limit may differ, and in certain cases each LLC shareholder is entitled to act so. 3.5 Registration of beneficial owners All business corporations are obliged to register their beneficial owners with the Register of Beneficial O wners (“ Register ”). As of 1 June 2021, a brand-new act, the Act on the Registration of Beneficial Owners, as amended (“ Act “) , became effective and brought significant changes in this area. The beneficial owner of the company is a natural person who ultimately owns or controls the company, i.e., each person who,
ILN Corporate Group – Establishing a Business Entity Series
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