Membership of legal persons in elected corporate body –April 1, 2021 deadline

Membership of legal persons in elected corporate body –April 1, 2021 deadline

New requirements for legal persons exercising the function of a member of elected body of capital companies (in Czech kapitálové společnosti) and cooperatives (in Czech družstva) were introduced by the Amendment of the Act No. 90/2012 Coll., Business Corporations Act, with effect from January 1, 2021. Legal person shall newly authorise one and only natural person who will represent such legal person while performing the function in the elected corporate body.

Please be advised that pursuant to the intertemporal provisions of the Amendment granting authorisation and registration of natural person in the Commercial Register shall occur on April 1, 2021 at the latest (!), otherwise the legal person’s function exercised in the elected corporate body is automatically terminated by the law.

If the above-mentioned membership of the legal person in the corporate body is established on January 1, 2021 or later, legal persons shall empower a natural person as well - registration in the Commercial Register shall be done within 3 months following election of the legal person to the elected corporate body. In case of a failure to meet described legal requirements, the function of the legal person in the elected body is terminated.

We highly recommend you to check membership of your legal persons in elected bodies of capital companies and cooperatives and take respective steps if necessary.