Liquidation of a Czech company means the liquidation of assets of a legally dissolved entity to pay debts of creditors and to present a liquidation balance sheet to partners.
The purpose of the liquidation is to extinguish the property of the liquidated legal entity, to settle debts to creditors, and to dispose of the balance of net assets resulting from the liquidation-liquidation balance sheet.
A legal entity shall be subject to liquidation on the day of its liquidation or invalidation. When liquidating, a legal entity shall use its name with the addition “in liquidation”.
The liquidator shall, within a month since the date of completion of liquidation, submit a proposal on removal of the legal entity from the public register. Upon its removal from the public register, such legal entity shall cease to exist.
Such a filing by the liquidator is made if the legal entity is registered in the commercial register. The commercial corporation has to apply for the tax administrator’s consent to delete the company from the commercial register, with whom the corporation is registered. Before giving consent to the removal, the tax administrator will also verify that tax was not withheld and remitted on the liquidation balance paid.
Voluntary liquidation of a Czech company
Liquidation of a company is defined as the process by which a legal entity winds up its activities and is struck off the commercial register after a fair settlement with the creditors. In the Czech Republic, the conditions for such a process are provided within corporate law and strictly procedural in nature for the purpose of legality and fair settlement with the interested parties.
Stages of voluntary Liquidation
The main stages of the Czech company’s voluntary liquidation are at least a few, with each step requiring serious preparation and being carried out extremely accurately. Key steps of voluntary liquidation of a Czech company include the following:
| Step | Description |
| 1. Adoption of a Decision on Liquidation | Liquidation starts with a decision by the shareholders or founders during a general meeting, requiring a qualified majority according to the constituent documents. |
| 2. Processing of Documents | Preparation and filing of relevant documents, including a notice to the commercial register and other regulatory authorities, confirming the company’s intentions and liquidation plan. |
| 3. Supporting Inspections by Regulatory Authorities | Allow regulatory authorities access to financial and corporate records for inspection, confirming the correct and legal performance of the liquidation. |
| 4. Closing of Accounts and Settlement of Creditors | Closing all bank accounts and liquidating other financial instruments while settling liabilities to creditors. The liquidator must inform creditors about the liquidation and ensure debts are paid. |
| 5. Removal from the Commercial Register | Once liabilities are discharged and confirmations from regulatory authorities are received, the company is deleted from the Commercial Register, marking the end of its legal existence. |
Role of the Law Firm Regulated United Europe
Regulated United Europe provides the full scope of relevant legal services for the purposes of the voluntary liquidation of the Czech Companies. The respective services include, inter alia:
- Advisory on all issues of liquidation: interpretation of the corporate law, plan of actions for liquidation.
- Preparation and support of documentation: correctness and completeness of documents required for registration and control authorities.
- A possibility of remote support: carrying out all needed procedures remotely substantially simplifies everything for clients who are not located in the Czech Republic.
- Settling troubles with creditors: support in organizing and holding negotiations with creditors, drafting of a payment plan.
Liquidation of a company in the Czech Republic is a very complex but at the same time quite feasible process which should be well-planned in details and fully comply with the legislative requirements. Regulated United Europe has sufficient experience and resources to secure the liquidation process as effectively and legally perfect, thus giving the clients full confidence in successfully finalizing all the procedures.
Winding up of a Czech company
Liquidation of a legal body in the Czech Republic is a multistage and laborious process that requires knowledge of Czech law, correct preparation of documents, and strict adherence to the sequence of actions. If the court decides to liquidate the company, there are a number of problems to be solved competently. For this purpose, you need an experienced lawyer who will protect your rights and help you to smoothly liquidate the legal entity, especially when the owner is a foreigner.
Closing a company is a rather complicated and time-consuming process. Various procedures are required, a number of documents must be collected, and it is necessary to deal with debts so as not to be fined and prosecuted by state authorities in the future.
There are a few options when it is decided to go out of business:
| Option | Description |
| 1. Re-registration of the Company | A change of founders and directors where current directors and owners lose their shares and responsibilities. This is the easiest and fastest method but not always possible. |
| 2. Bankruptcy | Recognition of insolvency, allowing debts to be written off through court, closing the activity with minimal losses. This complicated procedure occurs when unable to repay debts to at least two creditors within one month. Mistakes can lead to financial losses and criminal liability. |
| 3. Share Acquisition by One Owner | One of the owners takes over the shares belonging to others, reducing the number of founders and removing them from the books. |
| 4. Direct Liquidation | Complete cessation of a company’s activities with removal from the commercial register. This may be voluntary through owners’ decisions or compulsory due to regulatory violations and claims from authorities. |
In the case of a voluntary liquidation, the business owners can reconsider their decision and change their mind, but only until such time as the liquidation balance is distributed among the founders. At the same time, liquidation according to the court’s decision provides for compulsory closure of the company, regardless of the wishes of the owner. Such a decision can be taken to court. And for that you need a good lawyer.
Liquidation of an enterprise means the settlement of relations of the business with third parties without violation of the rights of creditors or founders, making an inventory, valuation of the property, assets monetization, paying all debts and distribution of the remaining sum among the partners.
In other words, starting from the very moment when the liquidation decision is taken and a liquidator is appointed and an application is filed with the Commercial Register, the beginning of winding up the company takes place, and the company keeps the status of a legal entity in liquidation until it is struck off the State Register.
What documents must be prepared for the liquidation of the legal entity in the Czech Republic?
The liquidation of a legal entity in the Czech Republic is of great importance from a legal point of view; therefore, it requires a cautious approach and strict observance of the law. This means that it is not just a matter of the termination of the company’s activities but also a complete settlement of its obligations to creditors and state authorities. Proper execution and filing of the relevant documents provide for the legal execution of the procedure and exclude all possible legal consequences in the future.
Documents required
A number of specific documents are required to successfully liquidate a company in the Czech Republic:
| Step | Description |
| 1. Power of Attorney | Prepare a power of attorney authorising a lawyer or other person to perform all actions related to the company’s liquidation. The document must comply with Czech law and be notarised. |
| 2. Decision on Liquidation | Document recording the shareholders’ or founders’ decision to liquidate the company, including the date and place of the meeting, vote counts, and a full description of the decision. |
| 3. Application for Registration of Changes | File an application with the commercial register to formally notify the company of its liquidation. Include company information, the liquidation resolution, and details of the liquidator. |
| 4. Extract from Criminal Record | Obtain an extract to confirm there are no legal impediments to the liquidator’s appointment, ensuring no legal offences that could affect the process. |
| 5. Accounting Report | Prepare an accounting statement showing the company’s current financial position to determine total assets and liabilities, as of the date closest to the decision to liquidate. |
| 6. Plan for Distribution of Residual Funds | Draft a plan for distributing remaining funds to shareholders or founders after satisfying all creditor claims. The plan must be approved by the founders’ meeting and included in the registration documents. |
Counselling services
The process of company liquidation in the Czech Republic requires not only the preparation of the above documents, but also a thorough understanding of local corporate law. It is recommended to seek professional advice from qualified lawyers specialising in corporate law. This will help to avoid mistakes and ensure that all necessary procedures are followed.
RUE customer support team
“Hi, if you are looking to start your project, or you still have some concerns, you can definitely reach out to me for comprehensive assistance. Contact me and let’s start your business venture.”
“Hello, I’m Sheyla, ready to help with your business ventures in Europe and beyond. Whether in international markets or exploring opportunities abroad, I offer guidance and support. Feel free to contact me!”
“Hello, my name is Diana and I specialise in assisting clients in many questions. Contact me and I will be able to provide you efficient support in your request.”
“Hello, my name is Polina. I will be happy to provide you with the necessary information to launch your project in the chosen jurisdiction – contact me for more information!”
CONTACT US
At the moment, the main services of our company are legal and compliance solutions for FinTech projects. Our offices are located in Vilnius, Prague, and Warsaw. The legal team can assist with legal analysis, project structuring, and legal regulation.
Registration number: 08620563
Anno: 21.10.2019
Phone: +420 775 524 175
Email: [email protected]
Address: Na Perštýně 342/1, Staré Město, 110 00 Prague
Registration number: 304377400
Anno: 30.08.2016
Phone: +370 6949 5456
Email: [email protected]
Address: Lvovo g. 25 – 702, 7th floor, Vilnius,
09320, Lithuania
Sp. z o.o
Registration number: 38421992700000
Anno: 28.08.2019
Email: [email protected]
Address: Twarda 18, 15th floor, Warsaw, 00-824, Poland
Europe OÜ
Registration number: 14153440
Anno: 16.11.2016
Phone: +372 56 966 260
Email: [email protected]
Address: Laeva 2, Tallinn, 10111, Estonia
Please leave your request
