Establishing a Joint-Stock Company

Establishing a Joint-Stock Company

A joint-stock company formed on the basis of a public offering of shares must have at least CZK 20 000 000 in registered capital. The amount of registered capital of a joint-stock company formed without a public offering must amount to at least CZK 2 000 000 (80 000 EUR).

General requirements

A joint-stock company can be founded by a single person either natural or legal. In this type of company the registered capital is divided into a certain number of shares with a specific nominal value. Shareholders of the company are not liable for the obligations of the company. The Board of Directors is the statutory body of the company, and it manages the company’s business activities and acts on its behalf.

As a result of the implementation of EU regulations, Czech law also permits certain European companies to be set up here (i.e. a European Company and European Economic Interest Grouping). As of October 2009 there were 431 European companies registered within the EU, whereas more than 40% of them are registered in the Czech Republic.

Characteistics of the Joint-Stock Company

Here are the basic characteristics of the Joint-Stock Company.

  • The company exists independently of its shareholders.Establishing Joint-Stock Company
  • The shareholders are not liable for the debts/obligations of the company.
  • A Board of Directors and Supervisory Board must be elected.
  • The registered capital and all in-kind contributions must be recorded in the Commercial Register.
  • Articles of Association must be prepared.
  • A trade license must be obtained from the Trade Licensing office.
  • A joint-stock company must have a minimum registered capital of CZK 2 million, however if it is established by a public offering of shares, the minimum registered capital is 20 million CZK.
  • A non-distributable reserve fund is required to set up from the first year’s net profit up to at least 20% of the net profit up to a maximum of 10% of the nominal value of the reserve fund.

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