For the last few years, our team members have shared on LinkedIn a selection of the most interesting Supreme Court judgments affecting corporate laws manners each month. Recently, the judgment selection has been complemented with another series of LinkedIn posts providing insight into areas that all members of statutory bodies should know and keep in mind when exercising their office. If you wish to learn more about the rules and duties applicable to members of a statutory body, you can now find them in one place in the form of a brief guide. The guides are available for free download below.

The Guide reflects the special features of performing an office in the statutory bodies of all legal forms of companies in the Czech Republic. Thus, information and advice contained in the Guide may be useful both for executive directors of limited liability companies and members of the administrative board or the board of directors of joint stock companies. Each of the versions differs in part, depending on differences between these legal forms of companies. The Guide will provide you with a comprehensive overview of the activities of a member of the statutory body from appointment to termination of his/her office. The Guide covers the fundamental rights, obligations, and rules related to the performance of the office and thus provides an introductory insight into the issues that are relevant to the performance of the office of a member of the statutory body. The Guide is available in Czech and English.

The Guide brings basic information on, for example, the commencement and termination of the member’s office or the activities of the statutory body.

• For example, what does the legal term “business management” mean? How is the will to act in a certain way formed within the statutory body and how can the members of the statutory body declare it towards third parties? What happens if a member of the statutory body acts on behalf of the company in violation of the prescribed rules?
• We will present the issues relating to concluding an agreement on the performance of the office and remuneration; for example, how and why to conclude an agreement on the performance of the office and how to deal with members’ remuneration. In what cases can any remuneration be paid? Can a member of the statutory body also be an employee of the company?
• You will be provided with an overview of the fundamental duties associated with the performance of office, such as due managerial care, compliance with conflicts of interest rules, or how the shareholders or members should be kept informed about the company’s affairs.
• We will give you a brief introduction to business groups, i.e., from the informal influence through the formal control to the admitted business group (a concern). You will find answers to questions such as how the position of a member of the statutory body differs in an intra-group company from that outside the group. Can the member be given instructions by someone else? And does the participation in a group entail any additional obligations beyond those of members of the statutory bodies of other companies not being part of business groups?
• The Guide also contains a description of the basic rules for dealing with annual profits.
• We also touch on the issues related to the Register of Ultimate Beneficial Owners and the consequences of an incorrect/missing entry in the register.
• The Guide closes with a brief calendar of corporate obligations, which in general outlines obligations of a member of the statutory body recurring each year as well as information regarding the publication of corporate documents in the Collection of Deeds or the obligation to keep and maintain accounting records, etc.

It is important to bear in mind that this brief Guide serves as a basic and general summary of the issues related to the performance of the office of the statutory body and cannot replace individually prepared legal analyses and legal advice. Indeed, the Guide itself states that the statutory body “does not need to be an expert in every conceivable area. But the statutory body must correctly assess as to when it is appropriate to seek professional assistance”. When in doubt, one should seek advice from an expert in the relevant area.

In any such case, we are ready to help you at any time and our corporate team is available to review specific cases. A more detailed legal analysis addressing such cases can avert the potential risk of damage caused to the company or to you as a member of the statutory body.

THE GUIDES ARE AVAILABLE FOR DOWNLOAD HERE:

A BRIEF GUIDE ON THE OFFICE OF A MEMBER OF THE STATUTORY BODY OF A BUSINESS CORPORATION | MEMBER OF THE BOARD OF DIRECTORS

A BRIEF GUIDE ON THE OFFICE OF A MEMBER OF THE STATUTORY BODY OF A BUSINESS CORPORATION | ADMINISTRATIVE BOARD MEMBER

A BRIEF GUIDE ON THE OFFICE OF A MEMBER OF THE STATUTORY BODY OF A BUSINESS CORPORATION | EXECUTIVE DIRECTOR