Coronavirus and business corporations

On 17 April 2020 the Senate of the Czech Republic approved a bill dealing with the current coronavirus situation in respect of business corporations. The bill states that during the emergency measures (but not later than by 31 December 2020) making it impossible or much more difficult for corporate bodies to hold meetings (and if not stated in a particular case otherwise), the following will be applicable: 

  • decisions of company bodies by letter (“per rollam”): the statutory bodies of legal entities can make decisions without physically meeting, either in written form or by using other technological means, even if this is not allowed in the company’s founding legal act. This mainly concerns the general meeting, board of directors, administrative board and supervisory board. 
  • automatic prolongation of term of office: if a term of office of a member of an elected body of a legal entity expires after the Act becomes effective, it shall be extended until the expiry of three months from the day following the end of the emergency measures (this will also apply if the term of office expires within one month of the day following the end of the emergency measures). If the member of the body does not agree, they must communicate this before the end of the term of office. 
  • renewal of the term of office with the consent of the member of the body: if the term of office of the member of the elected body of the legal entity expired between the day the emergency measures were adopted and the day the Act was adopted, the member’s term of office will be renewed, if they so agree and if no other person is appointed as a new member. The term of office will be renewed from the delivery of the consent to the renewal of the term of office and will be terminated three months after the day following the end of the emergency measures. 
  • co-optation: if the number of members of the elected body of the legal entity does not decrease below half, the body can with the consent of all members name alternate members of the body until the next meeting of the body authorized to appoint or elect the members, even when this is not allowed in the company’s founding legal act.
  • prolongation of six-month period to approve financial statements: if the statutory period for discussing the financial statements of a limited liability company, joint-stock company or cooperative should expire earlier than three months after the end of the emergency measures, it shall expire three months after the end of the emergency measures (but no later than 31 December 2020). This measure has no effect on tax liabilities. 

The aforementioned changes will come into effect after being signed by the President on the day of promulgation of the Act.

If you require further information, please contact Jiří Absolon or your contact person in our office.

This document is a general communication and does not constitute legal advice on a specific matter.

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