Authors: Ivan Rámeš, Tereza Hrabáková
Although the United Kingdom left the European Union at the end of January 2020, there is now a transitional period ending on 31 December 2020. This means that the United Kingdom continues to comply with EU rules. There are therefore no changes in the filing or scope of protection of EU trade marks and Community designs. But now the question arises as to what will happen to these rights just after the end of the transitional period.
It should be noted at the very beginning that negotiations between the United Kingdom and the EU are still ongoing, so there is still no final form of a trade agreement. In the end, the parties do not have to conclude an agreement at all (so far, all signs point to one not being concluded).
Also for this reason, in order to help its businesses prepare for Brexit, the UK government has developed legislation that is likely to enter into force on 1 January 2021, regardless of whether or not an EU-UK trade agreement is concluded.
Despite some legal uncertainty, it is already clear that, after the end of the transitional period, all already registered EU trade marks will be “cloned” into new UK trade mark registrations (the “New Registrations”). A New Registration will be comparable to a United Kingdom national trade mark and will be created automatically for the registered proprietor without any necessary steps and costs.
A New Registration will have the same legal status as if it were applied and registered under UK law. The New Registration will retain all priority or seniority data as the original EU trade mark. The New Registration will retain its existing registration number, but will be preceded by UK0009…., so that it will be easily identifiable as a United Kingdom national trade mark.
No registration certificate will be issued, but New Registration proprietors will have access to all information online. A New Registration will be a completely independent UK trade mark that can be challenged, assigned, licensed or renewed independently of the original EU trade mark.
If an EU trade mark proprietor does not wish to create a New Registration, it can apply a so-called “opt-out” mechanism. Then the New Registration will be treated as if it had never been created. The opt-out cannot be applied if the proprietor is already using the EU trade mark in the United Kingdom. This also applies if the proprietor has assigned, licensed or entered into an agreement in relation to that EU trade mark; or if, on the basis thereof, it has initiated litigation in the United Kingdom. There is also no deadline within which the opt-out mechanism can be applied.
However, the procedure will be different for an EU trade mark application not yet registered. Here, a new UK trade mark application (“New Application”) derived from the EU trade mark application will have to be filed within nine months of 1 January 2021. The New Application will retain the filing date, and priority or seniority from the EU trade mark application.
The New Application must, of course, be identical to the original EU trade mark application, both in terms of the list of goods and services and in terms of wording or appearance. The New Application will be subject to the usual registration process in the United Kingdom. The UK Industrial Property Office (the “UKIPO”) has confirmed that it will charge current administration fees for filing: GBP 170 per one class of goods/services and GBP 50 per each additional class.
As regards Community designs, the situation is almost identical to that of the EU trade mark. The UKIPO and the UK government have confirmed that in the United Kingdom equivalent registrations will be ensured for existing registrations that will be fully published, with minimal administrative burden and no additional costs.
The proprietor will also be able to apply the opt-out mechanism. For Community designs which are pending at the end of the transitional period or which are registered but not yet published (due to deferred publication), the UK government will give applicants the opportunity to apply for the same protection within nine months of the end of the transitional period, maintaining the filing date (and priority).
Holders of new rights are not required to have a correspondence address in the United Kingdom within three years of the end of the transitional period. However, local offices now offer to take over registered trade marks and designs under favourable conditions, and we believe it is appropriate to have a local representative. The representative will monitor, on behalf of the proprietor, statutory time limits, or will contact him/her if there is any problem. Therefore, we definitely recommend having a local representative for the New Applications.
We will continue to monitor further developments regarding Brexit and intellectual property rights and inform you about them on our website.
Zdroj: ESTATE (19. 10. 2020)
According to the participants of the Real Estate Forum conference, in comparison with other European cities, Brno also offers investors an exceptional opportunity for development. An example is the new modern city district, which is being built on a large area south of Brno’s main railway station.
The so-called ‘South Centre’ or ‘Trnitá’ is a unique large area immediately adjacent to the historic centre of Brno, which has not developed for decades. “This is a potential that other cities can envy,” stressed Michal Sedláček, director of the Office of the Architect of the City of Brno, in a discussion at the conference. “It is not a brownfield, it is an open area that has a river, a railway station, etc. No other city in Europe has it,” he added.
According to the developers’ plans, several mixed modern city blocks are to be built here. The new district of Trnitá will offer not only office space, but also housing for ten to fifteen thousand people. The area should be alive even after the end of working hours. Residents should have all the necessary facilities here – services, shops, parks and a wide range of leisure activities.
However, the new development was designed and planned even before the coronavirus, which has now fundamentally changed the reality on the market, especially in commercial and office space. Developers must therefore take this into account in respect of this developing site.
Lukáš Netolický of the real estate consulting firm Cushman & Wakefield pointed out at the forum that there has already been a slowdown in demand and activity on the Brno office space market. In connection with the economic crisis, he predicted that there would be up to 100,000 square meters of unoccupied space in the South Moravian capital next year, and that the increased vacancy would persist until 2023 and 2024.
And developers must adapt to this new reality. Therefore, for example, CTP Invest will reduce the share of office space in the Vlněna project in favour of residential space.
According to Prokop Svoboda, the owner of the real estate agency Svoboda & Williams, tenants of office space will now also dictate where the market will go. “We will move towards greater flexibility and other office models,” he suggested in the discussion.
The international company HB Reavis, which plans to build a multi-purpose Nová Zvonařka project with more than 120,000 square meters of floor space in the Trnitá area, therefore also wants to offer customers shared workspaces (co-working) or serviced offices in addition to classic office premises. “This is a direction that covid may have speeded up, but which we would anyway reach over time, because we see it in more developed markets,” explained Štefan Stanko, HB Reavis Group’s Managing Director for the Czech Republic.
Not every company will be able to afford long-term lease of large office space in times of crisis, Stanko warned. The ideal solution is therefore for companies to have a central administrative base and, in the case of future expansion, to rent serviced offices in the vicinity, which the company can flexibly reduce again in times of recession.
The fact that the city is an ideal transport and logistics hub can also help trigger the office space market in Brno. At the same time, it benefits from its strategic location, when it is not far to Vienna or Bratislava. Brno has the second busiest airport in the Czech Republic, which is also connected to a logistics complex with an area of more than 110,000 square meters. As part of air cargo transport, more than five thousand tons of cargo are transported through Brno every year. This has already attracted significant aces of contemporary industry to the area near Brno Airport. The rental premises here are used, for example, by DHL, Coca-Cola or Zásilkovna, said Milan Kratina, co-founder and CEO of Accolade, which owns the multi-purpose complex and also operates Brno Airport.
This suitable connection between transport and logistics can thus be the driving force of the economy in the South Moravian region even during the corona crisis and can bring other companies here. “The airport is a gateway to the city and the region, there should be basic connectivity there, because then the region grows and business grows,” Kratina noted. This subsequently goes hand in hand with the development of the office space market, Netolický also confirmed. He gave Polish regional cities as an example, where after 2012, after the last economic crisis, the office space market grew dramatically thanks to the introduction of new airlines and the completion of the motorway network.
In the experience of the clients of HAVEL & PARTNERS, transport accessibility is one of the key factors in the placement of new projects, pointed out Ludvík Juřička, a partner of this largest Czech-Slovak law firm. Therefore, if a given locality does not have a good logistics connection, it significantly limits its development, which is also the case of the very interesting locality Nová Zbrojovka. However, the construction of the necessary infrastructure is often hampered by the biggest ailment of the Czech construction sector, which is long permitting procedures.
Therefore, what could help the further development of the real estate market in Brno and its surroundings in the future is the adoption of a new Building Act, which should significantly speed up the permitting of new construction, both residential and transport. Michal Sedláček and František Korbel, a partner of HAVEL & PARTNERS who participated in the creation of the new legislation, agreed on this. However, the new Building Act has yet to go through the legislative process, and it is therefore not clear when and in what form it will actually enter into force.
The idea to organize a Real Estate Forum focused on selected real estate market trends, current and specific projects and real estate topics in Brno and the South Moravian region came out from the largest Czech-Slovak law firm HAVEL & PARTNERS. Thanks to the exceptional composition of partners and speakers, the Forum became the most prestigious real estate event in the region, and took place for the second year on 13 October 2020. Due to the epidemiological situation, the forum was held online. However, the online format of this undoubtedly important event also brings its benefits, which is openness to a wider audience.
Authors: Petr Kadlec, Jakub Kocmánek
On 13 October 2020, the European Commission published the fourth amendment to its communication of 19 March 2020 “Temporary framework for state aid measures to support the economy in the current COVID-19 outbreak” (the “Temporary Framework”).[1]
(i) direct grants of up to EUR 800,000, (ii) guarantees on loans, (iii) subsidised interest rates for loans, (iv) short-term export credit insurance, (v) aid for COVID-19 relevant research and development, (vi) aid for upscaling production of medical materials, (vii) investment aid for the production of COVID-19 relevant products, (viii) selective deferrals of tax and/or of social security contributions, (ix) aid for employment maintenance programmes, (x) recapitalisation measures.[2]
A number of these state aid measures have been implemented in the Czech Republic, such as direct grants up to EUR 800,000 for spa vouchers and under the COVID Rent programme, guarantees on loans under the COVID I – III programmes, aid for the production of medical materials, and aid for COVID-19 relevant research.
By the fourth amendment, the European Commission has extended and prolonged the Temporary Framework:
The Temporary Framework was originally intended to apply until the end of 2020.[3] The Commission has now prolonged the measures set out in the Temporary Framework until 30 June 2021 and, for recapitalisation of undertakings, until 30 September 2021. The Commission has declared that it will assess whether to further prolong the Temporary Framework before its expiration in June 2021.
The Temporary Framework now (above the EUR 800,000 limit applicable to grants) allows financial aid of up to EUR 3 million[4] for payment of uncovered fixed costs. The contribution may be provided to undertakings whose turnover declined by at least 30% compared to the same period in 2019. The contribution may apply to fixed costs which are not covered by other sources (insurance, other forms of state aid, and the like). The aid intensity will not exceed 70% of the uncovered fixed costs of medium-sized and large enterprises, and 90% of the uncovered fixed costs of micro and small enterprises.[5]
[1] Communication from the Commission of 19 March 2020, C(2020) 1863 final: HERE.
[2] We covered the Temporary Framework in the past: HERE
[3] Recapitalisation measures were to be enabled until 30 June 2021.
[4] The limit will always apply to the entire group of undertakings.
[5] Small enterprises are enterprises which employ fewer than 50 persons and whose turnover and/or balance sheet total does not exceed EUR 10 million.
Authors: David Krch, David Neveselý, Josef Žaloudek
Dear Clients and Business Partners,
Act No. 386/2020 Sb. (the “Amendment”) was promulgated in the Collection of Laws on 25 September 2020, which results in the cancelation of the real estate acquisition tax with retroactive effect for registrations of legal titles to real estate made by the Real Estate Registry from 1 December 2019.
The real estate acquisition tax is therefore cancelled for such real estate transfers for which applications for registration have been filed and respective registrations have been made by the Real Estate Registry since 1 December 2019 (i.e. the deadline for filing a tax return was after 31 March 2020). Such legal title registrations made by the Real Estate Registry since 1 December 2019 were subject to Extraordinary Measure No. 888 of the Ministry of Finance (the “Extraordinary Measure”), under which fines for late filing of real estate acquisition tax returns and late payment of such tax were forgiven. Taxpayers who have used the Extraordinary Measure no longer have to file a tax return or pay the real estate acquisition tax (if the Amendment applies to them). Taxpayers who have not used the Extraordinary Measure and filed a tax return and paid the real estate acquisition tax (if the Amendment applies to them) may apply for a real estate acquisition tax refund by submitting an application for a refund of the real estate acquisition tax overpayment.
The Amendment also includes accompanying amendments to Act No. 586/1992 Sb., on Income Taxes, among others:
The cancellation of the real estate acquisition tax also opens up space for new structures and mechanisms for the acquisition of real estate and the protection of property. If you own real estate and are interested in selling it, or if you are not sure about the tax implications of the sale that has already been made, do not hesitate to contact us.
Our experts will evaluate your specific situation and together we will find the most optimal solution.
Authors: Ondřej Florián, Radek Wejmelka
As we mentioned in the previous issue of our Guide, one of the changes brought by the amendment to the Companies Act are amended rules for the distribution of profit and other equity funds. In this context, the legislature has granted the requirements stemming from legal practice and reflected some conclusions from judicial decisions. As a result, the amendment permits the distribution of profit and other equity funds throughout the entire accounting period. However, at the same time, the rules governing the limits on the distribution of profit and equity funds payments have been unified and tightened.
A share in profit or other equity funds is determined based on the financial statements (annual or extraordinary) approved by the company’s general meeting. Although it was inferred by the practice of the courts in the past, the Act now expressly provides that a resolution to distribute profit or other equity funds may be adopted at any time during the accounting period following the accounting period for which the financial statements are prepared. As a result, it is not necessary for the general meeting to adopt a resolution on the distribution of profit or other equity funds by the deadline for approving the financial statements (i.e. within 6 months of the end of the given accounting period, the deadline for which still remains preserved).
In practice, this means that if a company does not yet want to distribute its profit, it may keep it as retained earnings and the general meeting may adopt a resolution to distribute the profit at a more opportune time during the accounting period.
In the case of a limited liability company and a joint-stock company, the total to be distributed must not exceed the sum of the company’s profit/loss for the latest account period, retained earnings/ accumulated losses, other profit/loss and other available funds (funds that may be dealt with by the company at its discretion) less additions to the reserve and other funds created in compliance with law and the memorandum (articles) of association.
If the company reports development costs in its assets, the sum to be distributed must be equal to at least the non-written-off part of the item in the company’s assets. The amount to be distributed will be then reduced by the sum of the non-written-off development costs shown in the company’s assets.
If a decision is adopted in conflict with these rules, it has no legal effect.
Profit or other equity funds cannot be distributed if the equity as reported in the latest financial statements or the equity after the distribution of profit or other equity funds falls below the level of the registered capital plus the funds that may not be dealt with by the company at its discretion. This rule in this form previously applied to joint-stock companies only. Following the amendment, it will now also apply to limited liability companies.
A share in profit or other equity funds is payable within 3 months of the date on which the resolution to distribute the share is adopted. There is no change compared to the existing regulation. However, the law or the memorandum or articles of association may stipulate otherwise. Similarly, another payment date may be determined by a resolution of the general meeting.
For example, the law prescribes a different payment date for unlimited companies and general partners in limited partnership companies where no resolution to distribute profit is adopted. Therefore, the share is payable within 6 months of the end of the accounting period.
The decision to distribute shares in profit or other equity funds is made by the company’s executive body that must not pay the share if the distribution is in conflict with law.
If the distribution rendered the company insolvent, no share in profit or other equity funds may be paid and no advance on the share in profit may be paid. The right to a share in profit that was not paid for this reason by the end of the current accounting period will extinguish and the share must be carried to the retained earnings account. This means that the payment is suspended in the event of the company’s potential insolvency due to the distribution of profit and other equity funds. If the situation is not overcome by the end of the current accounting period, the right to a share in profit or other equity funds will extinguish by the operation of law and the shares are carried to the retained earnings account. This rule does not apply to unlimited companies and general partners in limited partnership companies.
The executive body may decide to pay an advance on a share in profit based on the interim financial statements. This constitutes the provision of a part of a share in profit during the current accounting period before the profit is finally distributed based on the annual (or extraordinary) financial statements.
The amount of the share in profit may not exceed the sum of the company’s profit for the current accounting period, retained earnings and other available funds created from profit (funds that may be dealt with by the company at its discretion), less additions to reserve and other funds created under law and the memorandum (articles) of association.
If the payment of the share in profit is approved providing that the amount to be distributed also includes the paid advance, the advance need not be refunded and will be set off against the distributed profit. However, if the profit is not distributed, the advance must be refunded within 3 months of the day on which the annual (or extraordinary) financial statements were or should have been approved.
These provisions will first apply to advances on shares in profit or in other equity funds paid during the 2010 accounting period or in the accounting period beginning after the effective date of the amendment (in the case of fiscal years).
In general, gratuitous performance may be provided but only in the case of standard occasional gifts, reasonable donations for purposes beneficial to the public or, alternatively, performance that complies with moral obligation and respect for decency, and in the case of benefits provided under law.
Do not forget to keep track of our Guide to the Corporate World after the Amendment that will present other individual changes and new concepts as outlined in the previous issue.
Our corporate team is always ready to assist you in making the necessary preparations for the planned changes.
Dear Clients and Business Partners,
In connection with the state of emergency declared for a period of 30 days starting on 5 October 2020, we are bringing you an update of the impacts of the pandemic, the key changes and measures adopted in selected areas of law. A number of measures currently in place were already declared during the spring outbreak or in the fall prior to the re-introduction of the state of emergency. The state of emergency was declared on the grounds that as a result of the deteriorating epidemic situation it was necessary to adopt further stricter measures that interfere with fundamental rights and freedoms to a greater degree. This is only possible under such extraordinary regime.
Business corporations will be subject to the provisions of Act No. 191/2020 Sb., on certain measures to mitigate the impact of the SARS Covid-19 pandemic on persons participating in judicial proceedings, injured persons, victims of crime and legal entities and on amendments to the Insolvency Act and the Code of Civil Procedure, i.e. the Lex Covid. The following applies to business corporations:
The largest Czech-Slovak law firm HAVEL & PARTNERS has provided, under the leadership of Ondřej Florián, comprehensive legal advice to Pražská teplárenská a.s., which is part of the Energetický a průmyslový holding, a.s. group and has long been one of the leaders in the heat energy market, on a spin-off of its assets into five successor companies. The firm’s three partners, including its founder Jaroslav Havel, together with several professional teams, have been involved in one of the most complex business transformations the firm has completed so far this year.
The HAVEL & PARTNERS advisory group consisted of the firm’s founder Jaroslav Havel, partner Ondřej Florián together with associate Soňa Karbanová Schweizer (corporate law), partner Lukáš Syrový and associate Adam Karban (real estate law), counsel Josef Žaloudek and his team (tax law).
The value of assets spun off from Pražská teplárenská amounts to billions of Czech crowns. The transaction included not only a precise specification of the individual items of the spun-off parts of the assets and the compilation of the opening balance sheets of the participating companies, but also setting up the future legal relations between the participating companies. Thus, in addition to the standard provisions required by the Transformation Act, the demerger project also regulated ancillary arrangements concerning in-rem pre-emptive rights, the establishment of obligations corresponding to easements (both in rem and in personam) to set the future operating regime and cooperation between the parties, and registration of reservations for machinery to maintain the legal regime between the participating companies in relation to complicated operating technology. The transaction also included a demerging company’s registered capital decrease.
Pražská teplárenská a.s., which was founded in 1992 and currently has over 500 employees, ensures the energy supply to more than 230,000 households and thus covers 25% of the thermal energy market in Prague and its vicinity. Pražská teplárenská is part of the Energetický a průmyslový holding, a.s. (EPH) group. The EPH energy group, founded in 2009, associates more than 70 companies and is the largest heat supplier in the Czech Republic, the largest electricity producer and the second largest electricity distributor and supplier in Slovakia, and the second largest brown coal producer in Germany. At present, the EPH Group companies employ around 25,000 people and possess assets worth EUR 16.7 billion.
HAVEL & PARTNERS, the largest Czech-Slovak law firm, has provided comprehensive legal and tax advice to GuideVision, s.r.o., which provides consultancy, implementation, training and support to customers using ServiceNow, one of the most successful cloud platforms. The new owner of GuideVision will be Infosys Limited, an Indian IT company. The legal team for mergers and acquisitions headed by Jan Koval, a partner, was made up of senior associate Veronika Filipová and associate Ivo Skolil, while senior associate Vojtěch Katzer was in charge of labour matters and counsel Josef Žaloudek was in charge of the tax aspects of the transaction throughout the whole process. The value of the entire transaction amounts to EUR 30 million and it is, therefore, another significant IT transaction with an international dimension that the law firm was involved in.
The Prague-based GuideVision, with a team of over 240 people, is the most significant partner of ServiceNow in Central and Eastern Europe, and according to its financial statements, its last year’s sales amounted to CZK 314.2 million, marking growth of nearly CZK 71 million year-on-year. The Indian-based Infosys, with over 242 thousand employees and sales of over USD 13 billion, is one of the world’s largest IT companies. Infosys considers the ServiceNow platform to be one of the fastest growing enterprise software solutions and thanks to the acquisition of GuideVision, it intends to strengthen its position in the field in the long run.
In response to the economic effects of the crisis and the serious financial problems of many companies, HAVEL & PARTNERS, the largest and most successful Czech-Slovak law firm, is creating a unique team of specialists, which has also been extended to include experienced lawyers Jan Králíček and Vojtěch Šváb since this September. Together with the largest professional team in this area, they will be ready to provide clients in a difficult financial situation with the most comprehensive legal advice on the Czech-Slovak market.
“Unfortunately, the current development of the economy, which is facing a ten percent decline after the first wave of COVID-19, is bringing about financial problems and indebtedness for many companies. We expect an increase in corporate insolvencies and restructurings, and this trend is expected to continue throughout 2021. In response to the current situation and in an effort to help our clients in this difficult situation, a closely cooperating team of 20 experienced lawyers, including 6 partners of the firm, with its motto “Financing from A to Z”, is being created and will address comprehensively all stages of financing,” reminds the firm’s managing partner Jaroslav Havel. In addition to Jaroslav Havel, partners Marek Vojáček, Dušan Sedláček, Jan Topinka, Filip Čabart and Ondřej Majer are also taking part in leading this unique team.
“I am very pleased to welcome to this team my colleague, the lawyer Jan Králíček, who previously worked in our firm as a legal assistant during his studies, and also Vojtěch Šváb, who joins us with valuable experience in the judiciary. We have also strengthened this area of law, which is currently one of our priorities, in terms of personnel and expertise, in Moravia and Slovakia, where an experienced specialist in financing and insolvency, attorney Elena Jarolímková, has joined HAVEL & PARTNERS. We are now communicating with several other high-quality candidates about joining our firm,” says Havel. “Together with our experts from HAVEL & PARTNERS, they will help creditors and debtors by offering legal and tax advice, moreover, they will also look for alternative business solutions, including their subsequent comprehensive implementation.”
Jan Králíček graduated from the Faculty of Law of Charles University in Prague, earned a bachelor’s degree at the University of Economics in Prague and also an LL.M. degree at Maastricht University and at the University of Amsterdam. Jan worked as a lawyer for more than 4 years in the Prague office of the law firm DENTONS. There, he specialised primarily in insolvency law and represented clients in significant insolvency proceedings, both on the part of debtors and creditors.
Vojtěch Šváb earned a master’s degree in law at the Faculty of Law of the University of West Bohemia in Pilsen, and after graduating he worked as a lawyer in a law firm, and as an assistant judge of the Regional Court in Pilsen. Prior to joining HAVEL & PARTNERS, Vojtěch worked as an assistant judge in the Insolvency Judiciary Division of the High Court in Prague.
HAVEL & PARTNERS, the largest and most successful Czech-Slovak law firm, reacts to the current plunge of the Czech economy that has caused severe financial difficulties for a number of companies. The firm has merged a team of finance and banking experts with a team specialising in restructuring and insolvencies. The largest professional team of lawyers with expertise in this field will be ready to provide the most comprehensive advice offered on the Czech and Slovak market to clients in difficult financial situations.
The first wave of COVID-19 has resulted in a 10% drop in the Czech economy. A number of companies are already restructuring their debts. They either have the option to secure additional or alternative financing or address their difficulties through a total restructuring of their debts, be it in a business or insolvency regime. Another wave of restructuring and insolvencies is expected to come towards the end of the year, as a result of the end of the grace period for loan instalments this autumn. The trend is expected to continue throughout 2021.
For HAVEL & PARTNERS, the recent development is a great opportunity to help their clients in financial difficulties. “Starting in September, we are merging our financing practice with restructurings and insolvencies under a single motto ‘Financing from A to Z’. Our goal is to have a single closely cooperating team able to comprehensively address issues at all financing stages – i.e. from the actual granting of a loan, addressing issues with the loan repayment, to potential debt restructuring and insolvency,” says Jaroslav Havel, the law firm’s managing partner. Similar arrangements can also be seen in a number of leading international law firms.
The single coordinated team comprises 20 lawyers, most of whom boast experience from intranational law firms, including 5 partners – Jaroslav Havel, Marek Vojáček, Jan Topinka, Filip Čabart and Dušan Sedláček. The HAVEL & PARTNERS professionals have acquired extensive expertise in complex financial transactions; each year, they manage to carry out over 80 such transactions. They represent both creditors and debtors. In the past, the lawyers on the specialised team took part in the majority of key insolvencies in the Czech Republic, e.g. Union banka, the Vitkovice Group and Sazka, to name just a few. The team also closely collaborates with the law firm’s tax experts and professionals in bank regulation, compliance and criminal law.
To conclude, HAVEL & PARTNERS is able not only to provide assistance to creditors and debtors as part of their legal and tax advisory, but mainly to find alternative business solutions and help implement them. “In our understanding, financing and restructuring is interconnected as a single comprehensive industry which we draw on to come up with the most efficient solutions in terms of business and risk exposure. We are therefore fully prepared to help our clients in the upcoming demanding post-COVID-19 era,” adds Jaroslav Havel.
Lead by partner Jan Topinka, HAVEL & PARTNERS specialised banking team provided complete financial advice on the listing of eMan a.s. on the START stock exchange. eMan, a leading Czech software supplier, offered securities worth over CZK 45 million in total.
eMan specialises in the development of mobile and web applications and integrated solutions, being a leading Czech software supplier. It focuses mainly on solutions for the automotive industry, the banking and insurance sector and the energy sector. It clients include Honeywell, Škoda Auto, E.ON and ČSOB among others. The company operates in the Czech Republic, Europe and Northern America. It has been on the market for ten years already and completed over 200 projects. Currently it employs almost 120 people.
The expert team of HAVEL & PARTNERS that provided legal advice to eMan in connection with its listing on the stock exchange was led by partner Jan Topinka, head of the firm’s banking, finance and capital markets practice group. The team included the firm’s partner Ondřej Florián. Other experienced lawyers specialised in capital markets also participated – senior associate Monika Čermáková, associate Martin Stančík and junior associate Ivona Hladíková. The subscription of eMan’s shares drew enormous investor attention and became historically the most successful IPO on the START PX.
Authors: Ondřej Florián, Radek Wejmelka
An amendment to Act No. 90/2012 Sb., on Companies and Cooperatives (the Companies Act), as amended (the “Companies Act”), will introduce a number of major and minor changes in the life of business companies. The amendment is already set to come into effect on 1 January 2021, except for changes to the Registers Act, which will apply to companies from 1 July 2021.
Our Guide to the Corporate World explains what changes businesses should expect and how to prepare for them correctly.
The amendment gives companies an opportunity to amend their memoranda and articles of association to comply with the new regulations within one year of the effective date. Nevertheless, some changes will apply to companies immediately upon the amendment taking effect.
Besides some ambiguities and inaccuracies contained in the currently applicable law, the amendment introduces some new concepts of corporate law, while changing and amending others (already firmly fixed in practice today).
The first part of our Guide introduces you to the changes that affect corporate life and that our clients should prepare for (in advance). Other parts of our Guide will expand on individual changes in detail.
As for the distribution of profit and other equity funds, the legislature has granted the requirements stemming from legal practice and reflected some conclusions from judicial decisions. As a result, the amendment permits the distribution of profit and other equity funds throughout the entire accounting period. However, at the same time, the rules governing the limits on the distribution of profit and equity funds payments have been unified and tightened.
The most visible changes include those affecting joint-stock companies with a one-tier corporate governance structure. Under the new rules, the management board will be the only mandatorily established body and will combine the powers of the governing director and the management board. As a result, we recommend every one-tier structure company pay careful attention to the amendment to the Companies Act.
The amendment enacts some special types of shares and interests (carrying no voting rights or carrying a right to delegate a member to the company’s elected body). Shareholders will also be allowed to attend general meetings jointly with their (one) adviser.
Today, the transfer of a business (enterprise), or such a part thereof, that would constitute a change in the current structure of the business or the company’s scope of business or activities requires the consent of the general meeting. Although a concept has recently prevailed in the practice of the courts that such a part of a company’s business must be deemed to mean a branch, the amendment has diverted from these conclusions and expressly requires consent be granted to the transfer of a material part of a company’s assets and liabilities (irrespective of whether or not it is formally a branch).
The amendment permits creating a pre-emptive right, a buyback right and other similar rights with effects in rights in rem (i.e. should be of a similar nature to easements in the case of immovable assets).
The changes also affect the rules governing the execution of service agreements and resignations. The amendment has expanded the liability for a breach of the duty of due care and diligence to apply to persons acting as members of an elected body, although in fact not being such (‘shadow directors’). Material changes have been made to the rules governing the exclusion from office of members of an executive body by the court.
An interesting novelty is the opportunity granted to the general meeting to adopt principles and instructions for members of the company’s executive body (except for interventions in business management).
Even today, legal entities may become members of a company’s executive body. In this respect, the amendment imposes an obligation on legal entities that are members of a company’s elected body to appoint a specific individual as their representative to perform the office; otherwise, the legal entity cannot be entered in the Commercial Register as a member of the elected body, or alternatively, the office of the member will cease to exist if the representative fails to be appointed within 3 months of the appointment or expiry of the office of the previous representative. In respect of current entities, the representative must be appointed and entered in the Commercial Register by 1 April 2021.
Do not forget to follow our Guide to the Corporate World after the Amendment to be informed in detail about the individual changes and new concepts outlined above. Our next part will focus in detail on the distribution of profit and other equity funds.
Individual parts of our Guide will also be available on our website HERE.
Our corporate team is always ready to assist you in making necessary preparations for the planned changes.
