Taking Over a Business

Aside from establishing a new company, an entrepreneur can also acquire a share in an already existing company. The most typical options are acquisition of a business share in a limited liability company, acquisition of stock or other participation securities in a joint stock company and/or actual take over of a specific part of business of a company without acquiring an interest in it, by a contract for transfer of a business without changing the corporate structure.

Legal requirements

The most important legal regulation for this area is the Commercial Code and the Act on Transformation of Commercial Companies.

All changes related to the structure of a company that occur during the course of acquiring participation in a company need to be entered into the Commercial Register.

Acquiring a participation in another company is typically a very comprehensive process requiring good contractual background for the safety of both parties; typically, the parties involved in the transaction are represented by legal representatives. Law offices also frequently carry out a detailed legal audit per request of the transaction participants. The goal is to find out if there are any legal or economic risks related to acquiring a participation in the company.

Transferring and passing over a business share in a limited liability company

This is the most frequent acquisition of a participation in a company. The current partner transfers his/her business share to another partner and/or a person outside of the company in the form of a contract for transfer of a business share.

Acquiring participation in a joint stock company

This is completed based on a contract for transfer of stock, or other participatory securities (if shares have not been issued, yet). With respect to the fact that the shares represent securities, specific conditions of the transfer are based on the form and type of such securities and their other characteristics. At variance with a business share, where the partner is always entered into the Commercial Register, the anonymity of the company''s ownership structure can be secured in case of bearer stock.

Transformation of a companyTransformation of companies of the merger type, transfer of ownership to a partner or division of a company are operations that are difficult from the legal and organisational point of view and that are practically impossible to complete for a non-professional. For this reason, such operations are the domain of experienced attorneys. Regulations related to transformations of companies and their types are stipulated in Act 125/2008 Coll. on Transformation of Commercial Companies and Cooperatives, as amended.

Changes in the structure of a company typically impact the company''s founding deed, which is why they are carried out in the form of a notarial record that can only be completed by notaries.

Contract on sales of a company

A contract on selling a company does not establish acquisition of participation in another company. The subject of the transfer is only the company, as a set of tangible, personal, and intangible parts of business. The business also includes things, rights, and other property values that belong to the entrepreneur and are used to operate business or are supposed to serve such purpose with respect to their nature.

Resources

The following governmental and non-governmental institutions and web portals offer other information and useful services.

Programmes

Programme of investment incentives for starting up business intended mostly for foreign companies.

Personalised help and advice

The Enterprise Europe Network is an extensive network (with 600 host organisations and 4 000 full-time staff) providing information and advice to entrepreneurs through its local partners.

Legal texts

Document created in co-operation between Your Europe - Business (EU portal for companies) and BusinessInfo.cz.