Setting up an LLC (s.r.o.) within a week

There are two ways to start a new company:

Whether you choose one way or the other, it is a good idea to study the procedure at least in the basics, because knowledge is one of the important prerequisites for a successful business.

The most common form of company worldwide is the limited liability company (s.r.o.). In the Czech Republic, it is regulated by the Commercial Corporations Act and, thanks to the simple procedure of its establishment, it is very popular especially among start-ups and small entrepreneurs. A limited liability company is established by drawing up a memorandum of association or articles of association, but like other forms of company it is only formed when it is registered in the Commercial Register. In this case, the shareholders are liable for their obligations up to the amount of the contribution. The share capital may be only CZK 1.

In contrast, a joint stock company (a.s.) is more demanding and more worthwhile for entrepreneurs who plan a larger business from the beginning. The capital here does not consist of the shares of individual shareholders, but of shares and its minimum amount is 2 million CZK (or 80,000 EUR). Each shareholder then guarantees the liabilities with his own share. The supreme body is the general meeting (assembly of all shareholders or owners of the company).

A public company (v.o.s.) may be established by at least 2 persons who are jointly and severally liable for their obligations with all their assets. The share capital as well as the necessity to establish internal bodies of the company are not determined by law. Both points are therefore voluntary and result from the articles of association.

The Kommanditgesellschaft, a limited partnership business entity (k.s.) is not very common, but it is important to mention it for the sake of completeness. It combines elements of the above mentioned partnerships and limited liability companies and as such also has two types of partners. The former are the limited partners, who are obliged to make a deposit (the amount of the share capital is not fixed) and are liable for the obligations of the partnership up to the amount of their outstanding deposit, and the general partners, who do not have this obligation; they are also the statutory body of the partnership.

The last of the basic forms is the cooperative. It is a community of an unenclosed number of persons, which must have at least 3 members (they can be natural or legal persons) – the most famous ones are housing or production cooperatives. The main bodies of the cooperative are the members’ meeting, the board of directors, the control committee, or others according to its statutes. The amount of the minimum share capital or the lowest possible contribution for a member of a cooperative is not set by law. However, like the above-mentioned companies, a cooperative is only established by registration in the Commercial Register.

You should be clear on these basic steps before you set foot in your own business:

This is the basic condition for starting a new business. For most of them you just need to go to any trade office and after paying the fee you are practically done, but some types of trades require proof of professional competence at the same time. They are divided into the following categories:

The most common type is the limited liability company, but as we have noted above, other variants are also available (a.s., v.o.s., k.s. or cooperative). And the conditions associated with incorporation, such as the amount or the need to deposit the share capital, will also vary accordingly. While for an LLC you can get by with 1 CZK, for a joint stock company you must have at least 2 million CZK.

Previously, the decision was clear, as a physical office was practically the only choice. Today, however, many activities can be carried out easily remotely and therefore more and more entrepreneurs (IT professions, e-shop operators, etc.) choose virtual offices. Their main advantage is the saving of funds that do not have to spend on high monthly rent and equipment.

Moreover, with good providers, you get such a virtual office at a prestigious address in the centre of major cities, which is an important indicator for many business partners and clients when deciding whether or not to do business with you.

If you are serious about your business in the future, you should set aside enough time to come up with a name or ideally invite an expert. For many of today’s successful products, it is the name that carries the most value.

Make sure your name doesn’t clash with existing brands in our online verifier.

As the saying goes, it’s better for two and if you choose a good provider, you can at least save dozens of hours of your time when setting up a company, not to mention the stress and worry of going to the authorities. However, no matter how you go about it, it doesn’t hurt to study the relevant laws, which will help you get a better understanding of the whole company issue. Important ones include:

You can handle the vast majority of the steps from your desk, then run to the post office once and have the company ready to go within a week. For one price and for 10 years. You can get started by filling out an introductory form. We’ll take care of all the other paperwork and run the offices for you.

Prepare for a long administration and ideally also arrange a lawyer to help you prepare the basic documents and contracts. Make a note of the notary’s address as well, as this will be one of the first places you will need to head to for the drawing up of the articles of association (or the articles of incorporation if you are the founder yourself).

What else awaits you? 

And remember that although a company is established by drawing up a memorandum of association, its formation occurs only upon registration in the Commercial Register.

You will come across a lot of advice on the internet about starting a company, but it doesn’t always contain the right information. Therefore, if you rely on the online environment, always check everything from at least a few independent sources.

You may also come across templates for contracts and documents, but they may suffer from the same problems and contain errors. They serve well as a template, but at the very least a check with a professional is definitely in order.

We believe that there are still a majority of reputable providers, but we still occasionally come across offers that are not exactly fair. What is it? One indicator may be prices that are too low, but they usually only cover the basic service, which is subject to additional fees. But for those, you either have to read at length or look for them hidden below the line. In the case of company formation, for example, it may be that the price does not include notarial deed, stamps and other necessary items that screw up the final price considerably.

Another trick is to make the price or discount conditional on the purchase of other services that you don’t really need. For example, you have to buy a package of accounting or legal advice in addition to simply setting up a business, which may not be of the quality you would require if you needed it.

Sounds great at first glance. The company is ready and you don’t have to do anything complicated. If you come across a reputable provider, this may indeed be the case, but it is far from always the case and buying a ready-made company can sometimes be quite expensive. Here are three common situations:

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