Last year's "digital amendment" introduced many changes to Czech corporate law. But one change that is often overlooked is the amendment to the Czech Public Registry Act.
For example, a crucial adjustment has been made to Section 48 (2), which now requires branch offices (including those located abroad) to be registered directly in the Czech Commercial Register together with the entry for the respective company. This amendment will make corporate structures more traceable and responds to the European directive on digitisation.
One significant element of this amendment is the automatic registration of changes within the establishment of a new branch or its modification, eliminating the need to submit additional separate applications. At the same time, there was to be an automatic registration of already existing branch offices. Information for automatic registration was obtained both from the Commercial Register and, in the case of foreign branches or companies, from the European Business Registers Interconnection System (BRIS). For businesses with branches in theEU, the BRIS system is a key element for automated information exchange betweenregisters. However, it should be noted that this system only contains information about capital companies, i.e. joint-stock companies and limited liability companies. Other types of companies (limited and general partnerships) and cooperatives cannot rely on automatic updates.
The obligation to update foreign branches also applies to branches outside the EU. Despite the mid-July 2023 deadline, we have observed that the automatic transfer of information may not have occurred correctly in all cases.
We recommend that all entities registered in the Commercial Register who may have branch offices in the Czech Republic or abroad carefully review their records and ensure they are updated.