June 10, 2021

Supreme Court of the Czech Republic: Companies Have to Include Fields of Activity in Their Articles of Association

According to the May ruling of the Supreme Court, it is not sufficient if the company’s record in the Commercial Register and corresponding provision in their articles of association state only “production, trade and services not listed in Annexes 1 to 3 of the Trade Licensing Act”. According to the court, such a state does not meet the requirement of certainty, as it does not make clear what is the subject of the activity of a particular corporation. According to NS, the requirements of the law will be met only if the articles of associaton and the corresponding entry in the Commercial Register contain the field of activity.

Containing only the name of selected trade in the articles of association and in the Commercial Register has been the common practice of a large number of Czech companies. If the Supreme Court maintains this interpretation, it will mean a forced modification of the text of articles of association and related entries in the Commercial Register for a substantial number of companies.

The text of the ruling is available in Czech at: