ILN: BUYING AND SELLING REAL ESTATE - AN INTERNATIONAL GUIDE

[BUYING AND SELLING REAL ESTATE IN CZECH REPUBLIC]

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x. Tax registration is to be carried out with the local tax authority. y. The company must establish a website containing the obligatory information concerning the company without undue delay after its registration into the Commercial Register. b) Structure – 2 options z. There are two options regarding the company's structure: (i) the monistic structure, (ii) the dualistic structure. Neither option is implemented in Czech law in their pure forms. The company may freely change its structure by changing its Articles of Association. aa. The monistic structure is a relatively new option afforded under Czech law. The structure is typical in European countries such as Italy, France and Switzerland, and this structure is also used in European Companies (Societas Europaea). bb. In a Czech Joint-Stock Company with a monistic structure, the Management board fills both the supervisory and executive roles and is the company’s only corporate body. Members of the Management board are appointed by the General Meeting. cc. The dualistic structure, which was originally the only structure used for a joint-stock company in the Czech Republic before 1 January 2014, which is also currently used in Germany, is the more common structure of corporate governance in a joint-stock company in the Czech Republic. dd. A company with a dualistic structure has a Board of Directors and a Supervisory Board. The Board of Directors is the company's statutory (executive) body which is in charge of the company's business management. Nobody is authorized to instruct the Board of Directors as regards matters linked to business management. The Supervisory Board is the

controlling corporate body supervising the performance of the Board of Directors and the undertakings of the company. Nobody is authorized to instruct the Supervisory Board in controlling matters regarding the Board of Directors. ee. The General Meeting is the third body of the a.s. in both types of corporate structure. It consists of all company shareholders. Its most important rights consist of (i) electing new members of the Board of Directors in the dualistic structure if the Memorandum of Association does not delegate this right to the Supervisory Board; (ii) electing new members of the Management Board in the monistic structure; (iii) deciding on the distribution of profits and amendments to the Articles of Association. c) Liability ff. Only the company is liable towards the company's creditors, not the shareholders. Note: Persons acting on its behalf are liable for the obligations which arise before the company's incorporation in the Commercial Register. If there are more persons acting together, they are liable for such acting jointly and severally. The company can assume the effects of such acts no later than three months from its incorporation and then it is bound by such acts as if it was bound by them from the very beginning. 3. Other types of entities There are two other types of Companies under Czech law, a Limited partnership company (k.s.) and an Unlimited partnership company (v.o.s.), these are, however, not often used in real estate transactions. The same applies to private law associations that are not considered to be legal entities and where the liability of the members is unlimited.

ILN Real Estate Group – Buying and Selling Real Estate Series

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