Czech Republic: changes to the regulation of limited liability companies

In the framework of the coming private law re-codification, changes will also be made to the regulations regarding limited liability companies.

The new Corporations Act provides for the separate regulation of limited liability companies, and significantly reduces the number of references to the regulation of joint-stock companies of the current Commercial Code.

Some limitations have been eliminated such as the ban on a single-member limited liability company being the sole member of another limited company, and the limit on the number of limited liability companies in which an individual may be the sole member.

As any other legal entity, a limited liability company may serve as a member of a statutory body of another corporation. It is therefore possible that a legal entity may act as a director of a limited liability company.

If a limited liability company has a number of directors, the articles of association may stipulate that they comprise a collective body, a so-called board of directors of a limited liability company; such board would then take decisions in a manner similar to the board of directors of a joint-stock company, i.e. by a majority of votes, unless otherwise stipulated. With regard to the general meeting, the articles of association may freely specify the quorum as well as the majority needed to pass a resolution.Alessandro Pasut 4

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