Commercial law (including business corporations)
Framework
Act No. 90/2012 Sb. (zákon o obchodních korporacích, ZOK) governs business corporations; Act No. 304/2013 Sb. governs the Commercial Register. The old Commercial Code still applies to certain obligations of entrepreneurs. The exam tests company forms, governance, liability of directors and transformations.
Company forms
- Sole trader (OSVČ) is not a corporation.
- General partnership (v.o.s.): all partners liable jointly and severally with their whole property.
- Limited partnership (k.s.): limited partners liable up to their contribution; general partners fully.
- Limited liability company (s.r.o.): minimum capital 1 CZK; shareholders liable only for unpaid contributions; executive director (jednatel) is the statutory body; general meeting is the supreme body; supervisory board optional.
- Joint-stock company (a.s.): minimum capital 2,000,000 CZK (or 80,000 EUR); shares; board of directors and supervisory board, or a management board if monistic.
- Cooperative: at least three members, or two legal persons.
Governance and liability
Directors must act with care and in the company’s interest; the business judgment rule (§ 51 ZOK) protects informed, loyal decisions. Conflicts of interest must be disclosed. A director is liable for damage caused by breach of duty; the company may claim. A de facto director may be liable. Insolvency must be addressed in time; late filing can trigger liability.
Worked example
The executive director of an s.r.o. concludes a contract for CZK 5 million without the general meeting’s approval required by the articles. The company is bound unless the third party knew or should have known of the limitation; internal restrictions do not generally affect third parties. The company may then claim damages from the director for breach of duty. The analysis separates external validity from internal liability.
Traps
Mixing ZOK with the old Commercial Code; forgetting that s.r.o. capital is not the same as a.s. capital; treating “jednatel” and “prokura” as identical; and ignoring the business judgment rule or conflict-of-interest rules.