What does the Trade Licensing Office do and how can it help you in your business?

What is the role of the Trade Licensing Office in business

The Trade Licensing Office is an administrative body that performs state administration in the field of trade business. Its activities are primarily based on the Trade Licensing Act. Anyone who wants to run a business as a sole trader will sooner or later encounter it, even when starting a business.

The basic function of the Trade Licensing Office is the registration of trades and entrepreneurs, the control of compliance with the legal conditions for running a trade and the maintenance of the Trade Register. The Office also monitors whether entrepreneurs comply with the obligations laid down by law and can impose sanctions in the event of a breach of the law. However, it is not only a controlling institution – for traders it is primarily a place where all administrative matters related to their business are dealt with.

Setting up, changing and closing a trade

The most common reason for visiting the trade office is to set up a trade. Here, the entrepreneur submits a single registration form, which can also be used to fulfil obligations towards other institutions, such as the tax office, the social security administration or the health insurance company. The Trade Licensing Office assesses whether the conditions for running a particular trade are met, especially for craft, bound and licensed trades.

However, the office also deals with any changes in the course of business. Typically, this involves a change in the registered office, business premises, the object of the business or the responsible representative. Every trader is obliged to notify these changes within the set deadlines. Similarly, the Trade Licensing Office records the interruption or termination of a trade. All these facts are subsequently reflected in the Trade Register, which serves as the central register of traders in the Czech Republic.

Trade Register and its public part

The Trade Register is a public administration information system that contains data on entrepreneurs – both natural and legal persons. It is administered by the State through the trade licensing offices and its part is publicly accessible. Thanks to this, it is possible to consult the Trade Register without having to prove a legal interest.

The public part of the register contains basic identification data on the entrepreneur, information on the type of trade, the date of authorisation, and, where applicable, the suspension or termination of the trade. The non-public part, on the other hand, includes more sensitive data that are accessible only to authorised authorities.

The register of traders is important not only for the entrepreneurs themselves, but also for their business partners, customers or employers. It makes it possible to verify whether a particular person is actually authorised to do business and to what extent.

Extract from the Trade Register

One of the most frequently requested services of the Trade Register Office is an extract from the public part of the Trade Register. This document serves as an official confirmation that the entrepreneur is registered in the register and has a valid trade licence. The statement is often required when dealing with banks, authorities, business partners or when participating in public procurement.

Today, it is no longer necessary to go to the office in person. You can obtain an extract from the Trade Register online via the public administration web interface, in particular via the portal of the Ministry of Industry and Trade or the Czech POINT system. The online extract has the same testimonial value as the one issued physically at the counter if it is certified.

For a routine check of the data, it is often sufficient to simply consult the register without generating an official extract. This is practical, for example, when verifying suppliers or associates.

When the Trade Licensing Office cannot help you

Although the Trade Licensing Office provides basic information and administration, it is not its role to provide legal advice. If a trader is unsure whether he or she meets the conditions for a particular trade, how to set up the correct business or how to deal with an inspection or sanction, it is advisable to contact a lawyer.

A lawyer can help, for example, with assessing whether a trade is a free, tied or craft trade, with preparing documents for a licence or with resolving disputes with the authorities. In practice, it often turns out that a timely legal consultation saves the entrepreneur time and money.

At Affordable Lawyer we specialize in helping entrepreneurs and tradesmen. We can advise you quickly, clearly and without unnecessary bureaucracy – online and in person.

Where to find the Trade Licensing Office

Trade Licensing Offices operate in the Czech Republic as municipal trade licensing offices, which are usually part of municipal offices of municipalities with extended jurisdiction. This means that each trader has “his” locally competent trade office according to the place of permanent residence or registered office. However, the advantage of the Czech system is that many tasks can be handled at any trade office, regardless of local jurisdiction.

In addition, digitisation has increased significantly in recent years. Many tasks that previously required a personal visit to the office can now be handled electronically. This applies in particular to filing a notice of commencement of a trade, changes to data or obtaining an extract from the trade register online. For traders, this means less administration and more flexibility in dealing with business obligations.

Control and sanction powers of the trade licensing authority

In addition to registration and administration, the Trade Licensing Office also has control powers. It can carry out checks to ensure that the trade is conducted in accordance with the law, in particular whether it has a valid licence, complies with the declared object of business and fulfils other obligations, such as marking the business premises or keeping documents.

If the authority finds a breach of obligations, it may impose a fine or, in extreme cases, suspend or revoke the trade licence. Penalties vary according to the severity of the violation and can amount to hundreds of thousands of euros. It is precisely in these situations that the importance of legal assistance becomes apparent, as an incorrect procedure or a delayed response can have a major impact on a sole trader’s business.

Summary

The Trade Licensing Office is a key institution for every sole trader as it ensures the establishment, change, suspension and termination of trades, maintains the Trade Register and supervises compliance with the obligations set out in the Trade Licensing Act. Through a single registration form, it enables entrepreneurs to complete the basic administration associated with starting a business and records all relevant data in the register of trades, the public part of which is freely accessible online and serves to verify the authorisation of entrepreneurs. The Trade Licensing Office issues an extract from the public part of the Trade Register, which is often requested by banks, authorities or business partners and which can now be easily obtained as an extract from the Trade Register online. In addition to its registration and information role, the office also has inspection and sanctioning powers, and can carry out inspections and impose fines or suspend trade licences. On the other hand, it does not provide legal advice, so when there are uncertainties, more complex trades, inspections or sanctions, it is advisable to contact a lawyer who can protect the rights of the trader and prevent unnecessary problems in business.