The decision of the Supreme Court of the Czech Republic has a tangible impact on many companies

The Supreme Court of the Czech Republic stated that the subject of the company’s business „Production, trade and services not listed in Annexes 1 to 3 of the Trade Licensing Act“ can be invalid.

The Supreme Court of the Czech Republic, in its decision of 12 May 2021, Case No. 27 Cdo 3549/2020, stated that a provision of the articles of association or the articles of association, according to which the subject of the company’s business is „Production, trade and services not listed in Annexes 1 to 3 of the Trade Licensing Act“ and which is not supplemented by a list of specific fields of activity of the free trade, is vague and therefore invalid.

It is necessary to extend such an arrangement in the memorandum or articles of association to include the specific fields of activity of the free trade in which the company is actually engaged.

The imminent consequence of such an invalid arrangement is a court decision to dissolve the company and order its liquidation, if the company fails to remedy the situation even upon the court’s request and within the time limit set in the request.

Will this decision also affect your company? Please contact us with confidence.

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