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| June 8, 2018

The government has approved stricter sanctions for not substantiating the financial statement

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On 6 June 2018, the government approved a draft amendment on business corporations and other bills presented by the Ministry of Justice on 23 February 2018. According to this draft, the sanctions for not supplying the financial statement to the collection of documents of the trade register should become stricter, among other things. In case of non-fulfilment of this duty and being contactless, a company may even be dissolved without liquidation due to not submitting the financial statement. The aim is to prevent the existence of companies, which do not do not perform any economic activity and only exist formally.

Mainly the Chamber of Commerce of the Czech Republic has objections to the draft. According to the Chamber, the current sanctions are not being used sufficiently, and yet they are becoming stricter. The draft still needs to be approved by Parliament and signed by the President.