Liquidation of a Czech company

Czech company liquidation is the process of liquidating the assets of a dissolved legal entity in order to pay off the debts of creditors and issue a liquidation balance sheet to the partners.

The purpose of liquidation is to extinguish the property of the liquidated legal entity (essence of liquidation), 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 submit a proposal on exclusion of the legal entity from the public register within thirty days from the day of completion of liquidation. Upon exclusion from the public register, such legal entity shall cease to exist.

If the legal entity is registered in the commercial register, it is filed by the liquidator. The commercial corporation must seek consent to remove the company from the commercial register from the tax administrator with whom it is registered. Before consenting to the removal, the tax administrator will also check that tax has not been withheld and remitted on the liquidation balance paid.

Voluntary liquidation of a Czech company

Voluntary liquidation of a company is the process by which a legal entity ends its activities, settles with its creditors and is removed from the commercial register. In the Czech Republic, this process is governed by corporate law and requires strict adherence to procedures to ensure the legality and fairness of settlements with interested parties.

Stages of voluntary liquidation

The voluntary liquidation of a Czech company involves several key steps, each of which requires careful preparation and precise execution.

1. Adoption of a decision on liquidation

Liquidation begins with a decision of the shareholders or founders of the company. This decision is taken at a general meeting, where the necessary majority of votes must be reached in accordance with the constituent documents.

2. Processing of documents

The next step is to prepare and file all necessary documents, including a notice of liquidation with the commercial register and other regulatory authorities. These documents should clearly reflect the company’s intentions, the liquidation plan and information about the liquidation committee or liquidator.

3. Support of inspections by regulatory authorities

The company should provide access to its financial and corporate records for inspection by regulatory authorities. This is important to confirm the correctness and legality of the liquidation process.

4. Closing of accounts and settlement of creditors

One of the most critical stages is the closure of all bank accounts and other financial instruments and the settlement of liabilities to creditors. The liquidator must notify creditors of the liquidation and ensure that all debts are paid.

5. Removal from the commercial register

Once all liabilities have been discharged and appropriate confirmations have been received from the regulatory authorities, the company can be removed from the commercial register. This is the last step, officially ending the existence of the company.

Role of the law firm Regulated United Europe

“Regulated United Europe offers a full range of legal services to support the voluntary liquidation of Czech companies. Services include:

• Advice on all aspects of liquidation: assistance in interpreting corporate law and planning the liquidation process.
• Preparation and support of documentation: ensuring correctness and completeness of documents required for registration and control authorities.
• Remote support: the possibility to carry out all necessary procedures remotely, which greatly simplifies the process for clients not located in the Czech Republic.
• Settlement of issues with creditors: assistance in organising and conducting negotiations with creditors, preparation of a payment plan.

Voluntary liquidation of a company in the Czech Republic is a complex but manageable process that requires detailed planning and strict compliance with the law. Regulated United Europe has the necessary experience and resources to ensure an efficient and legally flawless liquidation process, providing clients with confidence in the successful completion of all procedures.

Winding up of a Czech company

Liquidation of a legal entity in the Czech Republic is a multi-stage and labour-intensive process that requires knowledge of Czech law, correct preparation of documents and strict adherence to the sequence of actions. And if the court decides to liquidate the company, it is necessary to competently solve a number of problems. For this purpose, you need an experienced lawyer who will protect your rights and help you to liquidate the legal entity smoothly, especially if the owner is a foreigner.

Closing a company is a complicated and lengthy process. It is necessary to go through various procedures, collect a number of documents and deal with debts in order to avoid fines and prosecution by state authorities in the future.

There are several options when deciding to go out of business:

1. Re-registration of a company is a change of founders and directors, whereby the current directors and owners lose their shares and responsibilities in the company. This method is the easiest and quickest, but it is not always possible.
2. Bankruptcy is the recognition of a company’s insolvency. It allows debts to be written off through the court and the business to be closed with the least losses. This procedure is quite complicated and is carried out if the company is unable to repay debts to at least two creditors within one month. Mistakes in the bankruptcy procedure can lead to large financial losses and even criminal liability.
3. Reduction in the number of founders – one of the owners takes over the shares of the others and they are written off the books.
4. Direct liquidation is the complete cessation of a company’s activity with its removal from the commercial register. It may be voluntary by decision of the owners and compulsory if it is impossible to operate due to violation of regulations and claims of regulatory authorities.

In the case of a voluntary liquidation, the owners of the business may reconsider their decision and reverse it, but only until the liquidation balance is distributed among the founders. However, in the case of liquidation by court order, the company must be closed regardless of the owners’ wishes. Such a ruling can be appealed in court. And for this you need a good lawyer.

The purpose of liquidating a business is to settle the relationship of the business with third parties without violating the rights of creditors or founders. An inventory is made, the property is valued and assets are monetised, then all debts are paid and the remaining amount is distributed among the partners.

From the moment the decision on liquidation is made, a liquidator is appointed and an application is filed with the commercial register, the process of winding up the company begins. This means that the company is in a state of liquidation until it is removed from the state register.

What documents are required to liquidate a legal entity in the Czech Republic?

Liquidation of a legal entity in the Czech Republic is a legally significant process that requires a careful approach and strict compliance with the law. This process includes not only the termination of the company’s activities, but also the full settlement of its obligations to creditors and state authorities. Correct execution and submission of the necessary documents guarantee the legality of the procedure and avoid possible legal problems in the future.

Documents required

A number of specific documents are required to successfully liquidate a company in the Czech Republic:

1. Power of attorney from owners and board members

The first step is to prepare a power of attorney that authorises a lawyer or other person to perform all actions related to the liquidation of the company. The document must be executed in accordance with Czech law and notarised.

2. Decision on liquidation

This document records the decision of the meeting of shareholders or founders to liquidate the company. The resolution must contain the date and place of the meeting, the number of votes cast in favour and against, and a full description of the decision taken.

3. Application for registration of changes in the commercial register

In order to formally notify the company of its liquidation, an application must be filed with the commercial register. The application must include information about the company, the resolution on the liquidation and details of the liquidator.

4. Extract from criminal record for the liquidator

A criminal record extract is required to confirm that there are no legal impediments to the appointment of a liquidator. This document ensures that the liquidator has no legal offences that could affect the liquidation process.

5. Accounting report

The preparation of an accounting statement showing the current financial position of the company is necessary to determine the total assets and liabilities. The report should be prepared as of the date closest to the decision to liquidate.

6. Plan for the distribution of residual funds

Once all creditor claims have been satisfied, a plan must be drawn up for the distribution of the remaining funds to the shareholders or founders. The plan must be approved by the founders’ meeting and included in the documents for registration in the commercial register.

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.