Amendment to the Trade Licensing Act

On May 19, 2006, Act No. 214/2006, Coll. was announced in the Collection of Laws, which amends Act No. 455/1991, Coll., the Trade Licensing Act, as amended, and certain other acts; this act became effective on August 1, 2006.

The aim of the amendment is to simplify procedures during registration of an entrepreneur in the area of small trade business activities; such simplification is to be achieved by reduction of the number of acts and visits that the entrepreneur is obliged to perform in connection with commencement of its business activities. The act also concentrates certain acts that the entrepreneur had so far to perform separately into a single location.

The Trade Register is newly pronounced by the act as a public administration information system. The Trade Licensing Office of the Czech Republic is its administrator and the Trade Register is operated by municipal and regional trade licensing offices in the extent set forth by law.

A significant change brought by the amendment is the regulation pursuant to which an individual may also together with announcement of the trade or with an application for a license at the relevant trade licensing office

• file an application for a tax registration or the relevant announcement;
• announce commencement of independent gainful activities;
• file an application for pension and health insurance; and
• announce that a vacant job was established and it has been occupied and to file an announcement pursuant to the Act on Public Health Insurance.

Legal entities may together with announcement of a trade or an application for a license at the relevant trade licensing office

• file an application for a tax registration or the relevant announcement; and
• announce that a vacant job was established or it has been occupied.

The entrepreneur is not obliged to submit documents to the trade licensing office documenting publicly known facts, such as a confirmation that an entrepreneur who is an individual has no tax underpayments registered, no underpayments of social security and state employment policy contributions. If the entrepreneur fails to present such confirmations, the trade licensing office verifies such facts itself at the relevant state administration office or at the relevant public administration information system. The Trade Licensing Office may also apply for an extract from the Criminal Register; the amendment also enables electronic applications for and handing over of the data in the manner enabling a remote access.

Further simplification concerns demonstration of legal grounds for use of the premises where the entrepreneur’s place of business is located, if it is different than his/her domicile, or where the legal entity’s registered office is located or where a branch of a foreign entity’s enterprise is located. To demonstrate the legal grounds for using the premises, it is newly sufficient to provide a written declaration by the owner of the real estate, apartment or commercial premises where the premises are located or, as the case may be, a declaration by the person entitled to otherwise handle the real estate, apartment or commercial premises that such owner agrees with location of the premises. If the announced address of the legal entity’s registered office or a branch of the foreign entity’s is already entered in the Commercial Register or any other register, such declaration need not be demonstrated.