Act on Transformation of Companies: Relocation of a Company’s Registered Office to Another Country, Concurrent Merger and Change of Legal Form and Other Changes
Sunday, 28 July 2013 15:06

Amendment to Act No. 125/2008 Coll., on Transformations of Corporations and Co-operatives, has introduced, effective as of 1 January 2012, a number of new institutes and changes in the current regulation pertaining to transformations of companies.

The amendment has also changed several associated regulations. It is worth to mention an amendment to the Commercial Code that newly allows that a joint-stock company be established by one natural person only.

One of the new institutes is the possibility of relocation of a company’s registered office to another country from or to the Czech Republic. Until now, this process could only have been implemented either by means of liquidating the existing company and establishing a new one abroad or by means or a cross-border merger of two companies. It must be noted that the amendment only allows for the registered office relocation within the territory of the European Union, it cannot be performed in any third countries.

After the amendment, the act allows for concurrent change of the legal form of the successor company upon merger. Prior to the amendment, this process required two separate acts.

Another new aspect is the possibility to publish mandatory information regarding the change on the company’s web sites. If the prescribed conditions are met, the company is no longer obliged to publish this information in the Commercial Bulleting and a reference to the company’s web sites is deemed sufficient.

The amendment also strengthens the rights of the company’s creditors and members. Protection of creditors is reflected for example in the possibility of creditors holding non-mature receivables to request that the company provide additional security. Protection of members is reflected for example in the fact that the company is obliged to purchase the interests and shares from any members who did not agree with the company’s transformation.

 
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