Again, we follow up on our article on the general legal implications of the current state of emergency by devoting this blog to measures for the functioning of legal persons.
Again, we follow up on our article on the general legal implications of the current state of emergency by devoting this blog to measures for the functioning of legal persons.
At the beginning of April, the government submitted a bill to the Chamber of Deputies on measures to mitigate the impact of the SARS CoV-2 coronavirus epidemic. This law also introduces several important rules for the operation of legal entities, including companies.
Certain bodies of legal persons, typically general meetings of some companies, may, according to the law and the constituent legal act (e.g. the articles of association), take decisions outside the meeting (in writing or using technical means of remote communication). However, such possibility must always be approved within the legal entity and this method of acting must be made available to the body in question.
The law now also allows the bodies to take decisions outside the meeting, although such a possibility did not previously exist within a particular legal entity. However, if such decision-making is subject to any conditions, either by law or, for example, by the articles of association, these must also be complied with. If no conditions have yet been laid down, they are determined by the statutory body in the case of the supreme body of a legal person, and by the supreme body in the case of another body. These conditions must also be communicated to the members of the body well in advance of the decision
The law also extends the term of office of members of the so-called elected bodies of legal persons, should this term expire during the current epidemic. If the term of office of a member of an elected body of a legal person expires, his term of office is extended until 3 months after the day following the end of the emergency measures during the epidemic. If the term of office expires within 1 month from the day following the end of the emergency epidemic measure, this rule shall apply equally.
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However, if a member of an elected body does not agree to the extension of his or her term of office, he or she shall deliver his or her dissent to the legal entity before the expiry of the term of office. In such a case, the term of office of the member of the elected body shall not be extended.
It is also important for legal persons that if the number of members of the elected body of the legal person falls below half, the body may appoint replacement members until the next meeting of the body entitled to elect or appoint its members. This possibility is normally conditional on the fact that this method of election is expressly allowed by the constitutive act of the legal person. However, the law now allows it for a transitional period even if the constitutive legal act of the legal entity does not otherwise allow it.
The law also relaxes the obligation to discuss the company’s annual accounts. Similar to the case of functional periods, if the time limit for the consideration of the financial statements should expire during or before 3 months after the end of the governmental measures, the time limit is extended.
The deadline will now be 3 months after the end of the extraordinary measures, but no later than 31 December 2020.
If the term of office of a member of an elected body has expired between the date of the emergency measures for the epidemic and the date on which the Act comes into force, it is possible for the member to resume office. However, this shall be subject to the former member of the body agreeing to do so and to the absence of another member of the elected body being elected, appointed or otherwise called in his place at the same time.
It also applies to the decision-making of bodies outside the session that, if their decision-making under this Act has already begun (in the case of decision-making outside the session in writing) or has been convened (for cases involving the use of technical means), they will complete their decision-making in this “mode” even after the end of the emergency measures.
The law is now still being passed in the Parliament and will have to be reconsidered by the Chamber of Deputies after the Senate’s consideration. Given that, according to the draft, it is to come into force already on the day of its promulgation, these measures can be expected within a relatively short period of time.
Our team of experienced attorneys will help you solve any legal issue. Within 24 hours we’ll evaluate your situation and suggest a step-by-step solution, including all costs. The price for this proposal is only CZK 690, and this is refunded to you when you order service from us.
Ondřej is the attorney who came up with the idea of providing legal services online. He's been earning his living through legal services for more than 10 years. He especially likes to help clients who may have given up hope in solving their legal issues at work, for example with real estate transfers or copyright licenses.
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