At the beginning of last year, the so-called “digital-amendment” came into force, transposing the requirements of the European Directive on digitisation[1]. The amendment also affected changes to the rules on the registration of branches and simplifies the tracking of branches established by companies.

Note: The Directive uses the term branch, but in Czech law a „spin-off plant“ is understood to mean such a branch[2] within the meaning of Section 503(2) of the Civil Code[3].

Based on the new wording of Section 48(2) of the Registration Act[4], extracts from the Commercial Companies Register[5] will be extended to include information on their branches. For the sake of completeness, we would like to add that in this article we only deal with the regulation of Czech companies in relation to their branches.

1. Domestic branches

If the company has a branchwith its registered office in the Czech Republic, it is necessary to register this branch in a separate entry in the Company Register. Information about its branch is automatically entered in its extract from the Commercial Register (under “ branches ”). Therefore, the company does not have to submit a petition to the registry court to change the registered data of the company at the same time when registering the branch office in the Company Register (even in the event of a change of data or its dissolution). The registry court shall do this without proceedings.[6]

1. Foreign branches

If the company has a branch abroad, registration in the Czech Company Register is automatic in some cases, without a registration procedure. It is therefore necessary to distinguish between foreign branches:

1. Established in the EU by a capital company

If the foreign branch is located in the EU and at the same time it is a branch of a capital company (a.s., s.r.o.), after its registration in the relevant foreign company register, information about it will be automatically entered for the relevant company in the Czech company register. The Czech Company Register obtains this information from the BRIS (European Information System) register, which records all branches established in the EU.

1. EU-based partnerships and branches established outside the EU

A more complex procedure will apply to all companies with a branch located outside the EU and to partnerships (v.o.s., k.s.) with a branch located in the EU.

The Czech extract from the Company Register does not automatically include the information about the branch of the company concerned. Companies will have to have the information about their branches (name, registered office and foreign registration number) registered by the Registry Court on the basis of a classic form application for registration of changes in the Company Register.

Note: In the first two cases mentioned above (i.e. in the case of domestic branches and branches of EU-based capital companies), it is not even possible to submit a proposal for registration of these data in the Company Register. The Registry Act expressly excludes this. The registry court obtains the data for automatic registration itself from the information registered with the relevant branch. Thus, the company only needs to have the details of its branch duly registered.

In addition to the above, in the case of domestic branches, pursuant to the wording of Section 51(d) of the Registration Act, information on the entrepreneur who established the branch, his name and registered office must also be provided. It is therefore necessary to check and possibly revise this information in the Company Register.

The deadline for compliance with the obligations under the amendment has already expired, so we recommend to all entrepreneurs registered in the Company Register to make sure that they are not subject to any of the new obligations.

In the event of non-compliance with the legal requirements for the content of information in the register, entrepreneurs may face a fine of CZK 100,000 and, in extreme cases, deletion from the Company Register.

Are you unsure whether or not the amendment negatively affects you as well? Do you know what you need to enter in the Company Register? Please, do not hesitate to contact us, our team of experienced lawyers will be happy to advise you.

[1] EUR-Lex - 02017L1132-20220812 - EN - EUR-Lex (europa.eu)

[2] For the sake of consistency, in the Czech version of this article we use only the term „spin-off plant“ also in relation to foreign branches registered in the relevant register.

[3] Act no. 89/2012 Coll., Civil Code, as amended.

[4] Act No. 304/2013 Coll., on public registers of legal entities and natural persons, as amended.

[5] Company Register

[6] Section 83a(2) of the Registration Act.