Now we will tell you a little about the types of legalization of commercial activity in the Czech Republic. Here are some of the common types of legal business entities in the Czech Republic:
✔ Sole Proprietorship (Živnostenský list): A sole proprietorship is the simplest and most common form of business. It allows an individual to conduct business activities under their own name or a trade name. The individual assumes personal liability for all business obligations.
✔ Limited Liability Company (Společnost s ručením omezeným, s.r.o.): A limited liability company is a popular choice for small to medium-sized businesses. It offers limited liability to its shareholders, meaning their personal assets are generally protected. The company's capital is divided into shares, and the liability of shareholders is limited to the extent of their contributions.
✔ Joint Stock Company (Akciová společnost, a.s.): A joint stock company is a larger and more complex business entity commonly used by medium to large-sized companies. It requires a minimum share capital and can issue shares to raise capital from public or private investors. Shareholders' liability is limited to the amount of their investment.
✔ Partnership (Veřejná obchodní společnost, V.O.S. or Komanditní společnost, K.S.): Partnerships are formed when two or more individuals or legal entities join together to carry out a business activity. In a general partnership (V.O.S.), partners have unlimited personal liability, while in a limited partnership (K.S.), there are general partners with unlimited liability and limited partners with liability limited to their contributions.
✔ Branch Office (Pobočka): Foreign companies can establish branch offices in the Czech Republic. A branch office operates as an extension of the foreign company and does not have a separate legal personality. The foreign company remains liable for the obligations of the branch office.
✔ Cooperative (Družstvo): Cooperatives are formed by individuals or legal entities with the primary goal of meeting their members' economic, social, or cultural needs. Members pool resources and share profits and risks based on their participation. Cooperative members' liability is generally limited to their contributions.
It's important to note that the choice of a legal business entity depends on various factors, including the nature of the business, liability concerns, tax implications, and the desired level of complexity.
When starting a business in the Czech Republic, it is recommended to contact us for legal and professional advice in order to ensure compliance with all relevant laws and regulations.