Eight of the most important changes in s.r.o.
With the amendment of the Civil Code and the Commercial Corporations Act, a number of changes came into force this year. Firms had six months to bring all the state's required adjustments into practice. What is the current situation? Which changes should you definitely not forget in the s.r.o., and what practice showed in their implementation? We have selected the eight most important changes for you in limited liability companies.
1. Amount of capital and contribution
With effect from 1 January 2014, the Law no longer provides for a minimum level of core capital as it was before. The minimum amount of each partner's contribution is only CZK 1. The creation of a limited liability company has thus become significantly simplified in terms of financing, and this legal arrangement of the company is in this case much more accessible for many start-ups.
The company's non-cash deposits are newly appreciated by experts, which the company chooses from the list of experts itself, or can then make an executive. Therefore, there is no need for an expert to be appointed by a court for these purposes, which also makes the situation much easier.
2. Change of the Founding Charter
The founding charter, the social contract, must newly contain some elements that have not yet been required. The changes concern, in particular, the identification of the types of shares, their designation, the teaching of the number of directors and the indication of an expert who will appreciate a non-cash deposit.
The new wording of the founding contract should have been based on a collection of business register documents until 1.7.2014, in the worst case case, within the additional deadline laid down by the court. If not, the company is in danger of being liquidated.
3. Different types of shares and handling them
Business shares are considered to be a matter in the new legislation. Thus, the company may issue several types of shares that may be owned by one shareholder. However, the creation of such shares should be anchored in a social contract, where it should also be determined which rights and obligations are linked to a particular type of share and what value it deserves. This is not newly regulated by the law, but directly by the company's partners, which gives them considerable freedom to deal with shares.
In addition to the basic shares, they can be created as well as those which correspond to the degree of participation of the shareholder in the business and ownership structure of the company. In practice, the shares with which the preferential right to a share of the profit or the right to a fixed share, shares without additional obligation, shares without voting rights or vice versa with a higher degree of influence on the company's conduct, shares with veto rights to certain decisions of the general meeting can be expected.
The shares can be newly incorporated in the tribal sheet, but this should be carefully considered, because the new legislation allows these shares to be transferred orally after their creation. This means that the company is losing control of them and, moreover, they cannot be traded on the market as well as in the ordinary shares of equity companies.
Other principles of consent to the transfer of a business share apply newly. While it was previously true that the transfer of a share in another partner was possible only with the agreement of the general meeting, the procedure must now be enshrined in the social agreement. In the event of transfer of a share to a third party, this possibility may no longer be enshrined in the social contract. The agreement of the general meeting is only required if it is expressly stated in the contract.
4. Responsibility of the Managing Director
The responsibility of the executive, which until recently was much more limited, was also recognised by the fundamental changes. In addition to extending responsibility, some elements directly related to the function of the executive have changed. This is, for example, a social contract, additional obligations or contract for the performance of the function.
The executive is now liable for the company and for the fulfilment of the obligations of s.r.o., including his personal property. He must perform his duties with proper care and, in the case of a court, he must prove that he did so. The role also plays the necessary loyalty, diligence and necessary knowledge.
The social contract shall include the number of directors, the amount and the value of the surcharge if requested and the share to which it will subsequently be linked. The Director shall also give his consent in the case of voluntary contributions to the members and may grant it without the approval of the General Meeting.
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5. Change in remuneration
The legislative changes also affected contracts for the exercise of office. While it used to be that, if the performance of the function of the executive was not explicitly agreed, the performance of the function was paid, it is the other way around. Directly in the contract on the performance of the duties on the basis of which directors, prosecutors and members of statutory bodies in companies are paid a remuneration must be agreed on the definition of all the components of remuneration, the determination of the amount of remuneration and the method of calculating it. It is also necessary in the contract to lay down rules for the payment of special remunerations and profit shares.
6. Treatment of the prohibition of competition and the abolition of chains
The Act on Commercial Corporations has newly enabled the newly prohibited chaining of companies, where s.r.o. with a single partner is also the sole founder or partner of another s.r.o. For the establishment of a limited liability company, a form of public document is necessary, i.e. a notary registration.
The ban on chaining was very unpopular among businessmen. In addition, one natural person could have been the sole shareholder of a maximum of three companies. Now it can create and exclusively own as many companies as it wants, all restrictions have been abolished by law. Through a social contract, the new prohibition of competition can be ruled out completely, only to have the consent of all the partners.
7. Website of the Company
If the company has a website, it also has an obligation to provide all data held in the commercial documents. It is the name of the company, registered office, registration details in the Commercial Register, including section and insert. Websites for a.s. can easily be created in the service http://www.internetovestrankyproakciovespolecnosti.cz >>
8. The withdrawal of a partner from the company
One of the last major changes is the possibility to terminate the participation of a partner in a company. It may withdraw from the company if it does not agree with the decision taken by the general meeting and it is a change in the prevailing nature of the company's business or an extension of the company's duration. The necessary condition for his speech is that he voted against the adoption of this decision at such a general meeting. It may also come out if it is against the acceptance of the additional obligation which the General Assembly has voted on. The associate must also not be forced to remain in the s.r.o. against his will. It may transfer its shares to other persons or partners under new legislation.