In this contribution, we would like to briefly draw attention to the changes in the regulation of joint-stock companies brought about by Act No. 134/2013 Coll., on certain measures to increase the transparency of joint-stock companies and on the amendment of other acts (hereinafter referred to as the “Transparency Act”). The Transparency Act primarily regulates the mandatory conversion of bearer shares in certificated form, which are not immobilised, to registered shares in certificated form and related matters. The Transparency Act imposes the following obligations on joint-stock companies with bearer shares in certificated form and on shareholders.

Obligations of joint-stock companies

All bearer shares in certificated form which are not immobilised shall be converted to registered shares in certificated form as of 1 January 2014, and on that date a corresponding amendment to the articles of association of the joint-stock company shall also automatically take effect. These changes shall occur directly by operation of law and it shall therefore not be necessary to decide on the change of shares and articles of association at the general meeting. Subsequently, the board of directors of the joint-stock company shall have the obligation to bring the articles of association into compliance with the law and to file an application for registration of the change in the form of shares in the Commercial Register by 30 June 2014 at the latest. By 31 March 2014 at the latest, the joint-stock company shall have the obligation to publish, in the manner prescribed for convening the general meeting of the company, a call for the submission of shares and a notice of the consequences associated with delay. The consequences associated with delay in exchanging the shares consist in the inability of such shareholder to exercise the rights associated with the shares, including that the right to dividend associated with such shares shall not arise.

Obligations of shareholders

Shareholders shall have the obligation to submit bearer shares which are not immobilised to the joint-stock company for the entry of the necessary data or for exchange for new registered shares and to provide the joint-stock company with the data necessary for entry in the list of shareholders, by 30 June 2014 at the latest. As mentioned above, a shareholder who is in delay with the performance of these obligations shall not be entitled to exercise the rights associated with the shares in respect of which he is in delay during the period of delay.

Options for procedure

In principle, there are 4 basic options for how a joint-stock company which currently has shares in bearer form may now proceed:

• book-enter the shares before 1 January 2014;

• immobilise the shares before 1 January 2014, i.e. conclude a securities custody agreement with the central depository or with a securities dealer authorised to provide the investment service of custody and administration of investment instruments;

• change the form of shares (from bearer shares to registered shares) before 1 January 2014;

• wait until 1 January 2014, when the change in the form of shares shall occur directly by operation of law.

This text was translated from Czech to English using an AI translator.