Category: Czech Republic

Clifford Chance has advised Generali Real Estate on the acquisition of the IBC office building in Prague from Mint Investments. Wilsons advised Mint Investments on the deal.

The IBC office complex, which is located near the Florenc metro station and next to the Hilton hotel, is home to international companies such as Renault, Mazars, and Swiss Life Select.

Clifford Chance’s team was led by Partner Emil Holub and Senior Associate Milan Rakosnik and included Associate Tereza Rehorova.

Wilsons’ team included Partner Martin Bendik and Senior Lawyers Lucie Kyselovska and Mariana Machatova.

Kocian Solc Balastik has advised J&T Banka on project financing of EUR 27 million provided to the Julius Meinl Living Group for the development of an apartment hotel on Senovazne Namesti in Prague.

Construction began in July of 2019, and opening is targeted for the third quarter of 2021.

KSB’s team included Partner Martin Krejci, Attorney Josef Kriz, and Trainee Ota Mach.

KSB did not reply to our inquiry on the matter.

Noerr has advised Bilfinger SE on the sale of Bilfinger Industrial Services Czech s.r.o., Bilfinger Euromont a.s., and Bilfinger Slovensko s.r.o to funds advised by Deutsche Invest Mittelstand, part of Deutsche Invest Capital Partners. Havel & Partners reportedly advised Deutsche Invest Mittelstand on the transaction.

According to Noerr, “the companies are the leading providers of comprehensive and modular construction and maintenance services of industrial and energy equipment in the Czech Republic and Slovakia. Their solution portfolio includes a complete range of industrial services covering engineering, the realization of investment projects, [and] maintenance and technological turnarounds.”

Noerr’s team included Prague-based Partner Barbara Kusak and Senior Associate Michal Janicek.

Havel & Partners has advised on the sale of a Czech special purpose vehicle that owns Prime Timesheet to Icelandic IT company Tempo Ehf.

According to Havel & Partners, Prime Timesheet, which was “developed primarily by an independent programmer, contains one of the most successful add-ons enabling time tracking in the well-known Jira application, which are sold online on the Atlassian Marketplace. All activities of Tempo Ehf, with Diversis Capital, a US investment fund, as its majority owner, focus on creating and licensing software for the Jira application. In acquiring the SPV that owns Prime Timesheet, Tempo Ehf. has picked up its biggest competitor and gained a new business partner, as the founder of the company is to further participate in developing Prime Timesheet after the completion of the transaction.”

Havel & Partners’ team included Partners Jan Diblik and Pavel Nemecek, Counsel Josef Zaloudek, and Associate Monika Vnekova.

Havel & Partners did not reply to our inquiry on the matter.

JSK has advised Poland’s R22 Group on its acquisition by auction of a 100% stake in ProfiSMS s.r.o. and its two Czech fully-owned subsidiaries, Axima SMS Services s.r.o. and SMSbrana s.r.o. The sellers – Net Brokers Holding, which is owned by the Bauer Media Group – were represented by Noerr.

According to JSK, the R22 group, which is based in Poznan, Poland, “is a dynamically growing holding of technological companies … pursuing business activities in e-commerce and employing more than 150 specialists throughout [Poland]. The group focuses on scalable services offered on the basis of a subscription model and SaaS (Software as a Service). Business operations are run as part of a whole chain of values – from creating own solutions, through their technological maintenance and development, to comprehensive sales and customer service.” 

JSK described ProfiSMS as “a provider of telecommunication services in the form of text messages for authentication and advertising purposes active on the Czech and Slovak markets, specializing in the highest quality message delivery over direct operator connections and using alpha sender ID.”

JSK’s team was led by Partner Tomas Dolezil and included Senior Associates Helena Hailichova and Hana Cislerova and Junior Lawyers Tomas Benes and Sebastian Speta.

Noerr’s team included Partner Barbara Kusak and Senior Associate Michal Janicek.

Wood & Co provided financial advice to Net Brokers Holding.

Havel & Partners has advised Genesis Capital Growth on the acquisition of a 100% stake in Home Care Promedica, a home healthcare and social services provider in the Czech Republic.

Financial details were not disclosed.

Genesis Capital Growth is a development capital fund specializing in investments in fast-growing SMEs in the Czech Republic and Slovakia and the neighboring countries. 

Havel & Partners’ team included Partners Vaclav Audes and Filip Cabart, Senior Associates Veronika Filipova, Stepan Cerny, and Lenka Teska Arnostova, and Attorney Katerina Slavikova.

Havel & Partners did not reply to our inquiry on the matter.

Schoenherr’s Czech office has advised KB SmartSolutions, s.r.o. on the acquisition of an almost 25% stake in Platebni Instituce Roger a.s, from Echilon Capital s.r.o. BPV Braun Partners advised Echilon Capital on the transaction, and Setina, Komendova & Partners advised Platebni Instituce Roger’s CEO Adam Soukal and CTO Tomas Slobodnik.

KB SmartSolutions — a subsidiary of Komercni Banka, a.s, which is itself part of the Societe Generale Group — focuses on the development and growth of financial service start-ups as well as on creating its own FinTech companies.

Platebni Instituce Roger provides factoring services. According to Schoenherr, “by connecting investors with companies, especially small and medium-sized ones, it provides an innovative form of operational financing for companies whose business is affected by long invoice maturities and the associated lack of cash.” According to the firm, “in 2020, the company obtained a full PSD2 license, which will significantly expand the range of offered payment services.”

Schoenherr’s team was led by Partner Vladimir Cizek and included Attorneys Jiri Marek, Eva Bajakova, Claudia Bock, Marie Gremillot, and Natalie Rosova, and Associate Lenka Kubicka.

The Setina, Komendova & Partners team was led by Partner Pavla Komendova.

BPV Braun Partners’ team was led by Senior Associate Ondrej Ponistiak.

Havel & Partners has advised Prazska Teplarenska on the spin-off of its assets into five successor companies.

According to Havel & Partners, “the value of assets spun off from Prazska Teplarenska amounts to billions of Czech crowns.”

Prazska Teplarenska, founded in 1992, “ensures the energy supply to more than 230,000 households and thus covers 25% of the thermal energy market in Prague and its vicinity,” according to Havel & Partners. It is a subsidiary of Energeticky a Prumyslovy Holding, which was founded in 2009, and which “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.”

Havel & Partners’ team included Partners Jaroslav Havel, Ondrej Florian, and Lukas Syrovy, Counsel Josef Zaloudek, and Associates Sona Karbanova Schweizer and Adam Karban. 

Pavel Kovarik has joined the European credit insurance group Credendo in the Czech Republic as Head of Legal and Compliance.

Kovarik started his legal career as a Legal Counsel at CSOB, where he worked from March 2000 to December 2002. He joined ING Bank Czech Republic in 2003 as a Corporate Legal Counsel for two years, then spent two years as Senior Corporate Legal Counsel. He spent six years as Team Leader at Risk Management before becoming Head of Legal — a position he held for eight years until joining Credendo.

Originally reported by CEE In-House Matters.

On 1 January 2021 an extensive amendment to the Czech Business Corporations Act will enter into force. The amendment brings simplifications, but also new sanctions, the most serious of which is the possible involuntary dissolution of companies that do not file financial statements in the Collection of Deeds of the Commercial Register.

The most fundamental changes are summarized briefly below.

1. Companies – founding simplified

When founding a limited liability company with registered capital of less than CZK 20,000, it will no longer be necessary to open a designated bank account for making contributions. Cash contributions of no more than CZK 20,000 can thus be made via the deposit manager directly in cash, without the administrative burden associated with setting up a designated account. The aim of this is to make it less expensive and time-consuming to establish a new company with a small amount of registered capital. The amendment will not change the position of contribution administrator; it can still be anyone – for example a founding member or an authorized lawyer.

Also thanks to this amendment, it will be possible to establish companies with a simple structure and a small amount of share capital, ideally even in a single day.

2. Dissolution of inactive businesses

The amendment to the Business Corporations Act sets out the conditions under which a court may dissolve inactive companies, even without any petition by a third party.

The courts will be able to dissolve an inactive company, for example, if it violates its obligation to file regular or extraordinary financial statements in the Collection of Deeds of the Commercial Register for at least two consecutive accounting periods, and it has not been possible to deliver a warning to the company to rectify deficiencies. If both of the above mentioned conditions are met, the court will initiate proceedings on the dissolution of the company without any motion and enter this information into the Commercial Register. The company will be dissolved no earlier than one year after the entry of this information into the Commercial Register.

Existing companies are therefore advised not to underestimate the importance of fulfilling their obligation to file financial statements in a Collection of Deeds, usually by 31 December (twelve months after the balance sheet date). If a company does not file its financial statements, but it is possible to deliver a warning to it to fulfil such obligation, the company will “only” be fined up to CZK 100,000.

3. A legal entity as a member of the board of another company

In order to ensure greater transparency in companies’ management structure, a new obligation will be introduced for legal entities that perform the function of a statutory governing instance in another company (applies only to limited liability companies and joint stock companies) or a cooperative.

Such legal entity has the obligation to authorize a single natural person to act on its behalf in the board of the company without undue delay upon its appointment. If it does not do so, it will not be able to register the legal entity in the Commercial Register as a member of the elected board. If the representative is not registered in the Commercial Register within three months from the commencement of the legal entity’s office in a company’s board, the legal entity’s term of office automatically expires by law.

4. Alteration in management of joint-stock companies

The amendment brings a fundamental change concerning joint-stock companies with monistic internal structures.

Companies with a monistic structure will no longer have a chairman of the administrative board and statutory manager. The only board will thus continue to be the administrative board, which will be the governing body. The members of the administrative board are appointed by the general meeting. According to the law, the administrative board has three members, but the memorandum of association may deviate from the legal regulation and establish a higher or lower number of members.

The aim of the regulation is to further simplify the management of joint-stock companies by introducing a minimalist version with the option of a one-member joint-stock company, the sole shareholder of which is also the only member of the administrative board.

5. Restrictions on the transferability of registered shares upon entry into the commercial register

From 2021, restrictions on the transferability of registered shares will only take effect if they are registered in the Commercial Register.

Therefore we recommend that companies with registered shares enter restrictions on the transfer of shares into the Commercial Register.

6. Applicability of financial statements to distribution of profit and other resources

Companies will now be able to distribute profits and their other resources at any time until the end of the accounting period following the accounting period for which the profit is paid, based on the financial statements for that period. The rules for profit distribution will also apply to the distribution of the company’s other resources.

However, this does not release the board from the obligation to carry out an insolvency test before paying out any share of the profits.
 
7. Memorandum of association of a partnership

Up to now, it has only been possible to modify the memorandum of association of an unlimited partnership or a limited partnership with the consent of all partners. The amendment will make it possible to deviate from this, making partnerships able to modify the memorandum of association by only a majority vote of the partners.

8. Invitation to a meeting of a joint-stock company to modify the memorandum of association

An invitation to a meeting to modify the memorandum of association will now have to contain a description of and justification for the modifications to the memorandum of association. The full text of the proposed modifications to the memorandum of association must be published on the company’s website, and shareholders must be able to familiarize themselves with the proposal at the company’s registered office.

9. Action for liability for insufficient assets

The amendment introduces the option to sue a member of a board who, by committing a breach of duty, has contributed to the insolvency of the company. The insolvency court will thus be able to decide, on the proposal of the insolvency administrator, that a person who has contributed to the insolvency and subsequent bankruptcy of the company by violating the duty of due care will be obliged to provide compensation up to the difference between debts and company assets. Therefore higher demands will be placed on the members of boards in terms of the duty of due care, and it will be in their interest to consider taking out liability insurance.

10. Other changes

In addition to the above, the amendment also brings other changes concerning, for example, remuneration of employees who are closely related to a member of a company’s board, abolition of the rule prohibiting a member of a board to resign at an inappropriate time for the company, the requirement that the transfer of an enterprise is subject to the approval of the general meeting of both the buyer and the seller (under penalty of invalidity), the option to omit classified information from the management report, the authorization of the general meeting to give strategic instructions to the board and the introduction of various types of shares in a limited liability company.

By Barbara Kusak, Partner, Petr Hrncir, Associated Partner, and Michal Janicek, Senior Associate, Noerr