Legal Representation of a Company and the Commercial Register

According to the transitional provisions of Business Corporations Act (Act No. 90/2012 Coll.), any provisions in a memorandum of association which were in conflict with mandatory provisions of the Business Corporations Act were repealed by act of law with effect as of 1st January 2014.

The Superior Court in Prague concluded in its decision as of 1st December 2014, Reference Number 7 Cmo 273/2014, that also such provisions in a memorandum of association which were in conflict with mandatory provisions of the Civil Code (Act No. 89/2012 Coll.) were repealed by act of law with effect as of 1st January 2014.

One of these provisions is Article 164 Section 1 of the Civil Code (legal representation of a company by a member of a governing body). As the legal nature of legal representation of a company changed with effect as of 1st January 2014, if a memorandum of association of a limited liability company contained a provision according to which “The company acts through its Managing Director”, this provision was repealed by an act of law and replaced by the provision “The company is represented by its Managing Director”. Therefore it was sufficient if a company only issued a consolidated version of its memorandum of association; no decision of the General Meeting about the change of the way of legal representation of a company in the form of the notary deed was needed.