A commercial company operating in Czech Republic will need to appoint directors and a board of directors, as prescribed by the applicable legislation. The directors of a Czech company must respect a set of requirements in order to be eligible for this position and our team of lawyers in Czech Republic can offer in-depth assistance on the legislation referring to this matter.
Legal requirements for Czech directors
When opening a company in Czech Republic, the company’s directors will need to prove that they have the legal capacity for this function. In Czech Republic, the company’s directors can be represented by both natural persons and legal entities, depending on the business form chosen for incorporation.
The main requirements that should be respected by any Czech director are the following:
• legal capacity for this position;
• the person has not committed any crimes;
• the person is entitled to perform trading activities.
The Czech company is allowed to have a director who is a resident of Czech Republic but, at the same time, the legal entity can be represented by a foreign director. In the latter case, the applicable legislation does not require the person to obtain a residence permit or an immigration visa. Our team of attorneys in Czech Republic can offer further information on this subject.
Rights and obligations of Czech directors
The directors of a Czech company are entitled to a wide range of rights, but they also have liabilities deriving from this position. According to the Business Corporation Act, which was modified and enforced starting with 1st January 2014, the executive director of the company may surrender his or her remuneration in specific conditions. The Section 62 of the new Act stipulates this requirement in the case in which the company is declared bankrupt or when the company is insolvent.
The directors of the company can be liable in terms of company’s debts, under the regulations stipulated by Section 68 of the Act. In this situation, a Czech court must issue a court order in which the director is required to guarantee payments on the respective debt.
Businessmen are invited to contact our law firm in Czech Republic for more details on the regulations referring to Czech directors.