Closing your business in the Czech Republic

Closing your business in the Czech Republic
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A company’s existence is terminated on the day of its erasure from the Commercial Register, however each such termination is preceded by a dissolution process, consisting of several sub-stages depending on whether the corporation is to be dissolved with or without liquidation.

Dissolution process

The dissolution of a company without liquidation is generally understood as its smooth transition to its legal successor, whereas liquidation refers to such activities of a business corporation that follow the decision on the termination of its business activities.

Reasons for dissolution

Here are the general reasons for dissolution of activities of company whether voluntary or involuntary.

  • Expiration of the period, for which the company was founded.
  • A decision of the relevant body of the company on its dissolution.
  • Achievement of the goal for which the business was established.
  • A decision of the relevant body of the company on its merger, transfer of assets to a shareholder, division of the company or its transformation to a different form of trading company or cooperative.

Involuntary dissolution

Closing your business in the Czech Republic

Involuntary resolution on termination of activities of a business corporation is decided by court at the proposal of the person with a legal interest in the matter or even without the proposal if:

  • It carries out illegal activities.
  • It has stopped complying with the prerequisites required by law for the establishment of a legal entity.
  • For more than two years its statutory body has lacked a quorum.
  • The law so prescribes.

At the proposal of the person with a legal interest or the petition of the Public Prosecutor’s Office, the court will dissolve the business corporation and order liquidation.

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