Not a few owners of real property have encountered this unpleasant situation: a company (which does otherwise not communicate) has registered the address of the property as their official seat. What are the owner’s options in such a case?
It may not happen not all that often – but is still far from exceptional – that the owner of a piece of real property, an apartment or commercial space (the “real property”) (or another person entitled to dispose of the real property – hereinafter the “owner”) learns of the fact that a company has registered the address of the real property as its official seat, against the will of the owner.
This may e.g. be the case if a previous lease agreement with the company in question has expired, or if a previous owner of the property consented to the installation of the company’s seat at the given address but the new owner disagrees. It is not uncommon for the company to be unreachable, not least because it does not actually (physically) reside at the address.
In this constellation, the company has installed its seat at the address of the real property without proper authorization – i.e., without the valid approval and consent of the owner. However, is this fact, taken in and by itself, enough for the owner of the real property to be able to ask the register court to remove “his” address from the Commercial Register as the purported seat of the company? Alas, it is not. The Supreme Court of the Czech Republic has in the past set a precedent when it decided that the forfeiture of legal title (i.e., a use right) to the premises on which the company’s seat is installed does not give automatically rise to an obligation on the part of the company to file a motion for the change of its registered seat with the Commercial Register. However, this loss of the use right to the premises where the company’s seat is located does oblige the company to adopt a formal decision on the relocation of its seat. In practice, though, many companies fail to properly and timely discharge this duty.
What can the property owner do, then, in order to achieve the change of address of the company’s seat as entered in the Commercial Register?
First of all, it is advisable to formally withdraw consent with the installation of the seat at the given address, and to notify the company hereof (if this has not already been done). We always recommend that the owner remind the company, in the very same notice, of its duty to resolve on a relocation and to file a motion for registration of this change of address in the Commercial Register, within a certain time period stipulated by the owner of the real property. This notice to the company may either be delivered electronically via databox, or by way of registered mail to the address of the company’s seat (with return receipt, if feasible).
If, in spite of such notice, the company still does not change the address of its seat, or if delivery of the notice via registered mail or data message fails (because the company does not communicate, and is not actually present at the registered address and thus does not accept service of process there), then the property owner may file a petition with the register court. This petition ought to be accompanied by the letter (or data message) that was sent to the company, or, if applicable, the piece of correspondence that could not successfully be delivered using the postal service provider. It is important to note that such a petition does not elevate the property owner to the status of a party to the proceedings. Consequently, the further course of events is solely in the hands of the court, which will of its own accord initiate a procedure to remedy the mismatch between the actual facts on the ground, on the one hand, and the state of affairs recorded in the Commercial Register, on the other hand.
The register court will then call upon the company to provide evidence of the legal title based upon which it is using the real property in question as its registered seat, within a time period granted by the court (usually in the duration of 30 days). The court may in fact ask the company at the same time to provide remedies with respect to the entry of its seat in the Commercial Register. This presupposes that the court was supplied with documentation to evidence the fact that consent with the installation of the company’s seat at the given address has been revoked, and that the company has been notified hereof.
If, upon being summoned by the court in this manner, the company fails to present its use title to the premises where its seat is installed or, as the case may be, fails to remedy the situation, the court may order (as per Sec. 9 (1) of the Public Registers Act) that the company be dissolved and liquidated. However, the letter of the law makes it clear that it is at the sole discretion of the court to decide whether or not it will actually order the dissolution and liquidation of the company and appoint a liquidator.
In our experience, the entire procedure, from petitioning the register court until the deletion of the liquidated company from the Commercial Register, may easily take a year, or in fact several years. With this in mind, one ought to be prepared that the successful removal of a “rogue” company seat from the Commercial Register will not be a quick affair, and property owners are thus well-advised to proactively such situations from occurring, e.g. by stipulating a duty to relocate in specific cases, within specific time periods, within their contractual relations with companies whom they allow to establish their seat on the owner’s property.
Source:
Act No. 304/2013 Coll., on public registers of legal entities and natural persons and on trust records, as amended
Supreme Court Resolution 27 Cdo 2277/2020 of 27 August 2020