In the Czech Republic the most important legal text dealing with companies' rights is the Commercial Code.
Before starting a business you must obtain a business licence - either a trading licence or another type of business licence. The process and requirements for issuing a trading licence (for a trade) or concession document are set out in the Trade Licensing Act.
Legal forms of business
The legal form of a business specifies the form of business under which the entrepreneur will operate. In the Czech Republic people may engage in business in two ways - as a natural person or as a legal entity. The second part of the Commercial Code lays down the following legal forms of business: trading company or cooperative. The Trade Licensing Act regulates the businesses of persons operating on the basis of a trade.
The legal forms of business are as follows:
- sole trader (belonging to one person);
- joint-stock company;
- limited liability company;
- public company (with no obligation to generate registered capital);
- limited partnership;
Setting up is the first phase in establishing a company, preceding its "formation". During this phase, you have to generate the registered capital (or at least some of it) by means of investments made by you and your partners.
Business activities and related rules
Among business activities we include trades, which are regulated by the Trade Licensing Act and other business activities, which are regulated by the specific legislation.
The Trade Licensing Act identifies the following types of trade:
- notifiable trades (these include skilled, restricted and free trades);
- concession trades.
The Trade Licensing Act sets out the general conditions for pursuing a trade that are common to all types of trade:
- a minimum age of 18 years;
- legal capacity;
- good character.
It also sets out the specific terms and conditions for pursuing a trade:
- evidence of completion of training or evidence of length of experience in the field in question, and the certificates and licenses required under the specific legislation on skilled, bound and concession trades.
Other business activities
Business activities that do not comprise trades include the pursuit of the so-called. liberal professions, for example the activities of lawyers, doctors, vets, notaries, patent agents, tax advisors, experts, interpreters, stock market valuers, stockbrokers etc. These activities are regulated by specific laws.
Business plans and assessments
Information regarding business plans can be found on the following websites:
To succeed, a new business needs a sound commercial strategy and secure financing.
Some standard requirements to be completed when setting up a business are the same as when opening a branch.
Single point of contact
In municipal trade licensing offices there are the so-called Central Registration Points (CRP). Here, when notifying a trade or submitting a request for a concession, you may also make notifications to other administrative bodies, for example the tax authority, social security authority, health insurance company or work office.
"Single points of contact" (SPC) have been established for businessmen at 15 selected trade licensing offices. They provide information and assistance in relation to starting up a business in the Czech Republic or other Member States of the EU and the EEA. An important role of the SPCs is to forward applications for licences in the area of services to the relevant offices - the permit-issuing bodies. All the necessary information for obtaining a business license is provided on the online single point of contact. Since 2011 the SPC services have been connected with another two services for businesses - ProCoP (product information point) and SOLVIT (assistance in appealing against erroneous decisions handed down by the administrative bodies of other Member States).
Getting a business licence
If you want to get a business licence (trade licence or concession), you must submit a request to the Trade Licensing Office (or at a so-called Czech Point). These function as a contact point between business owners and the public administration.
Registering a company
The Trade Licensing Office will enter your application in the Trade Register within five days and provide you with confirmation of registration. This document will be appended to your trade licence or concession (concessions without confirmation documents are not valid).
Trade licences may still not be considered valid at this stage, as you still have to register in the Commercial Register. Once this is done, companies and cooperatives become legal persons, with all the rights and obligations that this entails.
Entry in the Commercial Register
For proceedures relating to the Commercial Register the relevant court is the so-called Court of Registration, which is usually the Regional Court in the area where the head office of the legal person is located or the place of business of the natural person who is applying for registration in the Commercial Register. In Prague the relevant court is the Prague Municipal Court.
In most procedures the person in question must submit the application for entry in the Commercial Register. When submitting an application for entry in the Commercial Register an administrative fee is charged. The fee amounts to CZK 5,000 for a first-time entry, i.e. if you are requesting the registration of a company not previously registered.
Applications for entry in the Commercial Register and applications for changes to entries may be submitted only on the specific forms. Samples of these forms for all types of company can be found on the website of the Ministry of Justice.
Information on the submission of tax declarations may be found here:
Further information and useful services can be found here:
Many business owners offer to sell companies that have been set up only in order to be sold on.
A number of programmes and subsidies are there to help you when you are setting up a new business.