After more than a year and a half of the effectiveness of Act No. 90/2012 Coll., on Business Corporations and Cooperatives (hereinafter referred to as “ZOK”) and Act No. 89/2012 Coll., the Civil Code (hereinafter referred to as “OZ”), courts are beginning to issue first decisions relating to the problematic interpretation of certain provisions governing business corporations. Here we offer a brief summary of some of these decisions.

Form of power of attorney for the formation, creation, amendment or dissolution of a business corporation

The disputed case with which the Supreme Court dealt concerned the formation of a limited liability company. The Regional Court refused to register a newly formed limited liability company in the Commercial Register with regard to the fact that the power of attorney for its formation and the substituted power of attorney were granted only in writing with officially verified signatures, but not in the form of a notarial deed. The Supreme Court assessed the relationship between the provisions of Section 6(1) of the ZOK and the provisions of Section 441(2) of the OZ. In its resolution of 27 November 2014, file No. 29 Cdo 3919/2014, the Supreme Court expressed the opinion that the provision of Section 6(1) of the ZOK is, as regards the requirement of the form of power of attorney for the formation of a limited liability company, a special provision which shall apply in priority over Section 441(2) in fine of the OZ. According to the Supreme Court, a power of attorney with the officially verified signature of the principal is therefore sufficient.

Many (e.g. here and here) consider the interpretation of the Supreme Court to be incorrect, for the reason that both provisions with which the Supreme Court dealt regulate two entirely different matters. The provision of Section 6 of the ZOK regulates minimum requirements for the form of legal acts, the provision of Section 441(2) of the OZ regulates the form of power of attorney. Section 6 of the ZOK does not deal with the form of power of attorney for the legal act contained therein, and therefore cannot be a special provision to Section 441(2) of the OZ. The relationship of speciality is, on the contrary, between Section 6 and Section 8 of the ZOK, where Section 8 requires for the founding legal act of a capital company the form of a public instrument, in contrast to Section 6, according to which only written form with officially verified signatures would be sufficient. It will therefore be interesting to observe whether the case law on the relationship of these provisions will continue to develop.

Registration of academic title in the Commercial Register

In practice, it not infrequently occurred that some registry courts refused to register acquired academic titles of natural persons with reference that an academic title is not reference data recorded in the register of inhabitants (Section 18(1) of Act No. 111/2009 Coll., on Basic Registers).

The High Court in Prague, by Resolution of 28 May 2014, ref. No. 7 Cmo 346/2013, did not confirm this interpretation and, on the contrary, ruled that if a natural person has acquired the right to use an academic title and decides to have this data registered with their name in the register, this right cannot be denied by any law. The High Court in Prague recognised the use of an academic title as part of the right to education enshrined in the Charter of Fundamental Rights and Freedoms. The High Court supplemented its interpretation with the argument that particularly in cases where a legal person engages in a special type of business, e.g. bookkeeping, practice of advocacy, etc., from the perspective of its position on the market and the potential interest of third parties in its services, the non-indication of a title with the name of members of the statutory body would be significantly discriminatory. This is also with regard to the fact that previously formed and registered companies had academic titles registered in the Commercial Register. An academic title can therefore be registered in the register for a natural person.

Amendment of articles of association by voting per rollam and form of notarial deed

Two decisions of the High Court in Prague relate to this topic, namely the decision of 20 October 2014, file No. 7 Cmo 171/2014 and the decision of 3 March 2015, file No. 7 Cmo 455/2014. In both these decisions, the High Court concluded that on the basis of Section 175(3) of the ZOK Act, it is possible in the per rollam regime to amend the articles of association of a limited liability company only with officially verified signatures on the statements of those voting. For all resolutions that are adopted at a general meeting in the form of a notarial deed, according to the High Court, it is thus possible to be satisfied in the per rollam regime with officially verified signatures.

However, it can be assumed that once this question reaches the Supreme Court, its interpretation will be opposite, with reference to Section 8(1) of the ZOK, which stipulates the form of articles of association, and also with reference to Section 564 of the OZ, which states that if the law requires a certain form for a legal act, the content of the legal act may be changed by a manifestation of will in the same or stricter form. This interpretation is simultaneously in accordance with Directive of the European Parliament and of the Council No. 2009/101, Article 11 of which states that in all Member States whose laws do not provide for preventive administrative or judicial control at the time of formation of a company, the instrument of constitution and the statutes, as well as their amendments, must be officially verified. Therefore, due to possible later disputes, the form of notarial deed can only be recommended even at the cost of higher momentary expenses.

Mgr. Kamil Žylka

Law Office Mašek, Kočí, Aujezdský www.e-Advokacie.cz – on-line legal counselling

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