Czech Republic - Limited Liability Company

Company Type	Time to Incorporate	Cost
Sro	2 weeks	£1860

The limited liability company is the corporate forms most commonly used for the operations of foreign companies in the Czech Republic.

Limited Liability Company - Spolecnost s Rucenim Omezenym

• This type of company cannot trade on the stock exchange, but owners have limited liability up to their unpaid deposits
• The rights and duties of this type of company and its participants are regulated by the commercial code
• The main benefits include extreme confidentiality for beneficial owners
• Annual filing of accounts must be completed

Similarities

A company may be established by a single person. Furthermore, a limited liability company consisting of only one shareholder is not allowed to be the sole founder or sole shareholder of another limited liability company.

To be registered in the Commercial Register, a trade license must be obtained and must also maintain a reserve fund (which is principally a bookkeeping entry) to cover losses. A limited liability company is required to contribute 5% of its net profit annually to the reserve fund (10% in the first year of making a profit, but not in excess of 5% of the registered capital) until it reaches 10% of the company's registered capital. A reserve fund can only be used to settle a company's loss if such a loss does not exceed 10% of the registered capital of a limited liability company.

Differences

A limited liability company are not represented by share certificates. The ownership interests of a limited liability company may be transferred under the terms and conditions of the Commercial Code and the founder's contract of the company.

The minimum capital requirement for the establishment of a limited liability company is €7,600 (CZK 200,000).

A limited liability company's decision-making power is normally delegated to one or several executives appointed by the general meeting, which is the body representing the shareholders; it does not have a board of directors, but may for a supervisory board.