The amendment to the Trade Licensing Act, which was published in the Collections of Laws under No. 169/2012 on 30 May 2012, is to make life easier mainly for entrepreneurs – individuals.

In the past, the Trade Licensing Act was subject to frequent amendments that (except for a few exceptions) constituted rather minor modifications of the individual provisions of the Act, often reflecting amendments to other laws. However, the proposed amendment can be said to be clearly based on the current experience of applying the existing Trade Licensing Act and to be focused on the topical issues pertaining to business and on the limitation of the undesired effects associated therewith. This applies in particular to the intention to minimise the administrative burden of both new and established entrepreneurs by simplifying, or even cancelling, some of the administrative duties and specific acts that would, in effect, reduce the financial burden of entrepreneurs by up to 25%. Moreover, the legislators' quest for the comprehensibility and technical accuracy of some of the (so far contentious) provisions should not be left unmentioned.

Identification number of an establishment not required (1)

Specific changes will affect various areas, including the cancellation of an entrepreneur's obligation to mark his/her establishment with an identification number. The entrepreneur will be required merely to ensure that the establishment is fit for carrying on the given trade and will no longer be required to provide an identification number outside of the establishment.

On one hand, the establishment will have a specific identification number kept with the Trade Licence Register so as to comply with the formal requirements of the Czech Statistical Office; but on the other hand, each business person will decide whether to use the identification number assigned to his/her establishment. This regulation particularly reflects the (currently unfavourable) position of entities carrying on business under a trade licence compared to entities carrying on business under other laws (such as architects, notaries and attorneys-at-laws), who are not bound by current laws to have, publish and notify the identification number of their establishment. The cancellation of this duty could spare the entrepreneurs up to CZK 47 million.

No obligation to report a change of the place of business upon a change of residence

Another upcoming relief for entrepreneurs comes in the fact that, if they report their place of residence as their place of business, they can request the Trade Licensing Office to automatically change the place of business upon a change of residence2 Therefore, if an entrepreneur carries on business at home and then changes the residence, the Trade Licensing Office will change the place of business automatically and without requiring any additional information. These situations are common in frequent relocations.

All authorities can be notified at the same time

The existing law already permits entrepreneurs with a trade licence to make a filing with other public administration bodies and institutions (such as tax authorities, social security administration, employment bureaus and health insurance companies) via their competent Trade Licensing Office. Via this office as the Central Registration Place, these authorities can also be notified of any changes. However, the amendment abolishes the restrictions under which a change could only be notified to another authority if the change was concurrently notified to the Trade Licensing Office.3

Trade continuation upon an entrepreneur's death4

The Amendment also addresses changes in the event of the death of a business person. The intention is, in particular, to ensure the smooth continuation of the business of the deceased entrepreneur. The Amendment includes a list of entities authorised to continue carrying on the trade after the completion of the probate proceedings (such entities comprise: the administrator of the property of the deceased, heirs at law, beneficiaries of the will, surviving spouse or partner – even if not an heir, provided that he/she is a coowner of the property used for carrying on the trade, and, as the case may be, the insolvency trustee). In addition, the Amendment introduces an obligation on the court to provide, at the request of the Trade Licensing Office, information as to the date when a resolution of the court terminating the probate proceedings in respect of a deceased entrepreneur came into force.

The Amendment came into force at the end of June.

Footnotes

1 S. 17 (4), (5), (6) and (7) of the Trade Licensing Act

2 49 of the Trade Licensing Act, par. (4) through (6) added

3 S. 45a of the Trade Licensing Act

4 S. 13 of the Trade Licensing Act

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.