What does chaining mean? The provision in § 105 para. 2 Commercial Code which was introduced in 2001 and which prohibits a Czech s.r.o. to have as sole shareholder another s.r.o. (or similar legal form if it is a foreign company) with only one shareholder. Despite the almost 11 years of existence by now, thousands of Czech s.r.o. still have this illegal structure and — at least theoretically — face liquidation by decision of the Commercial Court.

The draft Act on Companies, as recently approved by the government, besides other drastic changes reduces the required basic capital of a Czech limited liability company (s.r.o.) from Kč 200,000 to Kč 1. Does this mean that the Czech s.r.o. will lose all credibility in the Czech Republic and the outside business world as protection of business partners is waived?

The Czech Republic has adopted the so-called program financing approach. Unfortunately, it has done so in a bureaucratic and inefficient manner. But this is exactly what needs to be cleared up if we want to start getting somewhere, writes Supreme Audit Office (NKÚ) vice chairman Milosalv Kala.