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Company Liquidation in Czech Republic

August 8, 2012, 11:16 am
BridgeWest

The Czech Commercial Code (sections 70-75b) recognizes two forms of liquidation: voluntary or enforced.

The voluntary company liquidation may be instituted if the term specified for the company’s duration has expired, if the objectives were reached, if the relevant authority decides to dissolve it or if the company is taking another legal form.

A compulsory company liquidation is ordered by the Court in certain conditions: if the bankruptcy process was instituted, if the society doesn’t have a reserve fund, if the company didn’t performed any commercial activity after registration or if the necessary capital was decrease. If it’s possible to solve the reason why the Court has decided to liquidate the Czech company, this may lead to a cancellation of the decision,but only in a timeframe settled by the law.

The decision of a company liquidation in Czech Republic must be entered in the Commercial Register and all the future actions must be made under the name of the company followed by the termination “in liquidation”. The powers of the management structure are passed to a liquidator or a committee of liquidators.

If the company is late in appointing a liquidator, the appropriate Court will designate one to handle the company dissolution. If it’s a compulsory liquidator, the Court must also appoint the liquidator. He might be a member of the company’s management and the designation can take place even without his consent. If there are relevant reasons why the liquidator is not suitable for this position, he may fill a justifying claim to the judge. The name of the liquidator must be registered in the Commercial Register. If the liquidator resigns, is recalled or dies, another liquidator must be named in the same manner as the predecessor and registered in the Commercial Register.

The liquidator appointed for the Czech company liquidation is entitled to receive a remuneration settled by the Court or by the company (depending on the organ that has appointed the liquidator). He has a major role in performing activities designed to help the liquidation of the Czech company: represent the company before the authorities, solve the company's debts, support receivables and receive their fulfillment. New contracts may be signed only if are related to the liquidation.

An announcement regarding the Czech company liquidation process must be stated at least twice and all the creditors must be announced regarding the way they can fill their claims and the maximum term they can deposit it(cannot be shorter than 3 months since the last announcement).

A balance sheet and a list with all the company’s assets must be elaborated in the same day  the liquidation decision was taken. The company must also elaborate a financial statement a day before the meeting when the decision is taken. If not, the liquidator must also fill this report. The list with all the assets must be send to all the creditors.

A report regarding the course of the company dissolution must be drawn up by the liquidator and also a plan for distributing the remaining assets among the members of the company. The plan must be signed by the competent company’s authority. After drawing the plan, a financial statement must be filled by the liquidator.

No payment is granted for the company’s members until all the entitled creditors’ requests are fulfilled.

After distributing the remaining assets between the entitled members, a liquidation reminder is sent among the creditors and debtors. Also a list with the members which received a part of the company’s shares will be elaborated by the liquidator.

Within 30 days after the Czech company liquidation is completed, the liquidator must submit a request for erasing the company from the Commercial Register.




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Company Formation in Czech Republic

Prague

BridgeWest offers company incorporation services in the Czech Republic. Our services include:

- drawing up the articles of association that can be signed through power of attorney (Czech laws require powers of attorney for any public ... [More]

Lawyers in Czech Republic

Prague

BridgeWest provides a wide range of legal services in Czech through our affiliated Czech lawyers and Law Firms in Prague and other major cities in Czech. We are mainly specialized in the main aspects of Czech Commercial Law, including Company Form ... [More]