Glossary

A person who is granted the power of attorney.

Ready made JSC

A document that informs on the company performance during the fiscal year.
The company"s annual report provides information on its financial situation, business activities and financial results for the past financial year. Annual reports are required from the companies that have to submit their financial statements audited.
The annual report is a marketing communication tool through which companies present their goals and plans. Well-prepared annual report helps to build corporate image, increas its credibility and strengthens its market position.

Setting up a JSC

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Prerequisites for the formation of trade license can be met only by individuals. The institute of authorized representative is a natural person appointed by an entrepreneur who

• is responsible for the proper operation of the trade and compliance with the trade licensing regulations,
• must satisfy both the general and special conditions of a trade by type of business activity,
• must participate in a trade to the extent required,
• must have permanent residence in the Czech Republic

Obligation to appoint a representative to § 11 Trade Licensing Act

• entrepreneur who is a natural person and does not meet the specific conditions of a trade (§ 7), unless the reporting industrial trades,
• entrepreneur who is a foreign natural person and not allowed to stay in the Czech Republic,
• entrepreneur who is a legal person established in the Czech Republic - to the function of authorized representative shall appoint a statutory authority or statutory body which satisfies the conditions for this function under the Trade Licensing Act. If it is not possible to appoint a authorized representative of the persons mentioned above, the entrepreneur establishes authorized representative of other persons,
• entrepreneur who is a foreign legal entity - appoints for a authorized representative head of branch located in the territory of the Czech Republic, who fulfills the conditions for the function under the Trade Licensing Act, if the head of the branch does not meet these conditions, provides business representative responsible for other people.

However, a representative may be appointed also optionally (voluntarily).

Legal person established in the Czech Republic, founded as a joint stock company, which
a) accepts deposits from the public and
b) provides loans
and that to pursue the activities referred to in points a) and b) possesses a banking license

Ready made JSC

All banking transactions and financial services of banks, including account balances and deposits are covered by banking secrecy.
Banking secrecy is the obligation of banks to maintain confidentiality of the above matters, if the client does not give consent to their disclosure. The law stipulates who the bank can convey information without the client"s consent.

Ready made JSC

A security which does not bear the name of the holder. For these securities, a change in holder is possible by simple handover of the security or through a transfer in accordance with the Securities Act. The advantage is the ease of trading on secondary markets. Bearer shares are always freely transferable.

As at 27 June 2013 there was a change in the Business Act dealing with anonymous certificated bearer shares. Specifically, the Act on certain measures to increase the transparency of joint stock companies entered into force. On that date, a new joint stock company can not issue bearer shares in certificated form. This ends the anonymity of the owners of the shares - the company"s shareholders.

If you remain interested in the preservation of anonymity of the property, read more about the foundation or sale of offshore companies.

Managing Authority of executive and administrative nature (therefore sometimes referred to as "the Board").

The authority that decides on all matters except for matters reserved for the General Meeting or Supervisory Board.
The Board of Directors consists of:

• business management - management of the company in economic, industrial and organizational terms
• secretary/agent - makes legal acts on behalf of OJSC externally (articles, General Meeting or Supervisory Board may restrict it, limit, however, is not effective outside), each member of the Board of Directors acts separately on behalf of the company, unless the statutes provide otherwise.

Board of Directors manages the company between sessions of the General Meeting, it is a collective body (at least 3 members, from their elected chairman; does not apply to one-member JSC) and elected (by General Meeting or Supervisory Board, for the maximum term of 5 years - assessed for each member of the Board of Directors separately, repeatability possible) , its members may be appealed ny the body that elected them, they can withdraw (§ 66/1 col. law).

For the purposes of the Commercial Code, the business is a set of tangible, intangible and personal components of business. Following components belong to the business: things, rights and other assets owned by an entrepreneur and used to operate a business or due to their nature they serve this purpose:

• material component (buildings, equipment, materials and other things)
• personal component (depending primarily on the level of entrepreneurs, executives and structure, qualifications and experience of staff and other persons involved in the business)
• intangible component (consisting of rights and other property values)

Systematic activities carried out by an entrepreneur independently, in his own name and on his own responsibility for profit.

independence - the entrepreneur himself makes business decisions, is not subject to command of anyone else, is in no relationship of subordination, is not personally subordinate to its trading partners (in many business professions certain dependence on the instructions of the customer is evident); independence, however, does not remove the obligation to follow the law and the liabilities assumed; the results of its activities are carried out by contract, ie by selling products, providing services, etc. - the business should be distinguished from the work under an employment relationship where the employee performs work within the employer"s organization, according to his disposition, usually in its premises and through its production and labor resources

consistency - for example, may be a seasonal activity, activity with certain breaks or special occasions - but it must not be unique activity, performed only rarely and randomly - a prerequisite for consistency is repetition of individual actions

carry out in his own name - excludes such action by companions on behalf of shareholders or employees activities on behalf of the employer, includes activity based on the contract of mandate (commercial lawyers, lawyers)

on its own responsibility - anyone else in not resposible for the entrepreneur, he is responsible for his liabilities, if he commits a breach of a legal obligation, he bears responsibility associated with such a violation; that is not the case, if an employee commits a breach of a legal obligation when performing tasks of his employer - responsibility to a third party arises the employer and the employee is responsisble to that employer, the infringement is therefore attributed to his employer - entrepreneur

for profit - an entrepreneur tries to get material benefit, profit is the motive of business; fact that this effort has not been satisfied yet does not change the fact that this is a business, the same applies to loss of earnings; law admits, in some cases, an entrepreneur and companies, which became not established for business purposes, in practice, it raises the question whether this benefit must have a pecuniary nature

A business is defined so that it is an activity performed by an entrepreneur - it must be an activity performed by a person under the list referred to in § 2, second paragraph, this list, however, is to some extent dependent on whether these people actually do business, and from that point of view, the provisions of § 2 of the Commercial Code is a circular definition: An entrepreneur is one who undertakes, but business is activity done by entrepreneur.

Participation of a partner in a company and the resulting rights and duties.

Share in the business always has two sides:

1) Quantitative page - partner"s share, can be defined in general

2) qualitative - rights and duties associated with the share, different for each company

a) property rights

• right to share in profits
• the right to settle the shareholder and the company

b) non-material rights

• right to participate in the control and management of the company
• right to information on matters of the company

  c) equity obligations

• deposit obligation
• obligation to compensate for loss of the company

  d) non equity obligations

• to refrain from competitive behavior
• other obligations - are usually based by social contract and under the specific circumstances of that company

Forms of dissolution

1) without liquidation

• assets transferred to the legal successor (conversion of the company) - 52
• when filing for bankruptcy if:
• 
  
  • dismissed for lack of assets,
  • cancellation of bankruptcy after the fulfillment of the resolution or
  • cancellation of bankruptcy if the bankrupt"s property is insufficient to cover the costs of bankruptcy, on condition that the company has no assets (excluding items excluded from the estate); deleted from the Commercial Register here does not require the approval of the tax administrator;

2) in liquidation - a company is dissolved already upon entry into liquidation.

Ways of dissolution

Voluntary - upon agreement of all shareholders or a decision of a company"s authority (dissociation decision) - these may withdraw their decision until the distribution of the liquidation value started (the effective date of such decision ends the office of the liquidator, to this day the company needs to build an interim account statements)

receivership - a court decision (proposed of state authority or interested person; regional courts)

• inaction - in the last 2 years there has not been a general meeting or in the past year were not elected members of the body of the company, who have completed term of more than 1 year, or a company does not operate any business for more than two years
• loss of business license
• termination of the qualifications required by law for the establishment or company can not carry on business for the insurmountable contradictions among partners
• infringement to create a reserve fund
• breaches of the duty to carry out business activities by individuals specifically authorized
• breach of the obligation to sell part of its business or part imposed by the Authority for the Protection of Competition
• bankruptcy - see here above (if the petition for bankruptcy for reasons other than lack of assets, the company shall not be dissolved; if there is some asset left aftero the bankruptcy, the liquidations shall be executed)
• court set a deadline for removal the reason for cancellation if possible

The Company shall terminate on deletion from the Commercial Register (similarity with its creation - incorporation of the company in the Commercial Register).

The Central Credit Register (CCR) is an information system that pools information on the credit commitments of individual entrepreneurs and legal entities, and facilitates the efficient exchange of this information between CCR participants.
CCR participants are all the banks and branches of foreign banks carrying on business in the Czech Republic, as well as other persons where so provided in a special legislative act. CCR participants are required to update the CCR database on a monthly basis. Each of the participants has access to the information in the system, as does the Czech National Bank as the CCR operator.

Ready made JSC

Share certificate is a security and should be protected against counterfeiting. Share certificate must also include the serial number and the signature of a member or members of the Board who are authorized to act on behalf of the company to the issue date. The documentary includes share coupon sheet to pay dividends. Coupon to share may be issued to bearer, so the bearer coupon may be someone other than the owner of the shares. It is in the own interest of any company to limit the possibility of counterfeiting shares.

Commercial Register is a public list which shall contain the statutory information concerning the enterpreneurs or organizational units of their companies for which it provides law. Commercial Register is is kept by a court appointed by a special law (registration court). Commercial Register is a public list of entrepreneurs (but not all) and of basic and legally relevant data about them (the data that are important for flexible and secure business transactions).
The main function of Commercial Register is to provide basic information on business partners in business, this is actually a communication channel of persons registered in respect of an unspecified number of people and institutions, arising from the principle of formal publicity.

The process consisting of interrelated activities leading to the establishment of the company; mostly limited liability company or joint stock company, but also other forms of companies. Company establishment in Czech Republic is considered a very time-consuming and burdensome process, and therefore more and more customers use for this purpose specialized consulting firms or law firms.

The address that is registered as a seat in the Commercial Register or other legal records. The entrepreneur is obliged to state to the Commercial Register, a priori, his actual place of business. The seat of the organizational unit of the enterprise is the address of its location. Registered office is of fundamental importance in terms of the nationality of a legal person. It determines the law applicable to that person, juridical and defines who will give it diplomatic protection. The four criteria are distinguished - the seat, the state constitution, state of business, nationality of partners (directors).

Concern arises as a formal grouping of autonomous entities, some of which are in spite of their legal personality subordinate to another subject so that the group acts as a centralized entity comprising a single organization and unity of management.

Concern is defined by Commercial Code § 66a, paragraph 7: a group consists of a single business group of at least two persons, one of which is against the other person in controlling position. A concern may arise based on the simple fact of the existence of a controlling and controlled entities (rebuttable presumption) - then we are talking about a de facto concern. The group may be constituted on the basis of the controlling agreement - then we are talking about contracting concern.

Defining element of concern is the merger of several legally autonomous persons to the system allowing common management. Individual group companies are managed in the interests of the whole, which may not lead to the simultaneous benefits of each of the group companies.

The term of concerted practices is regulated by the provisions of § 66b of the Commercial Code. The essence is to capture by existing legislation factual phenomenon of the increase in the number of votes available to a person in another company also for votes held by other persons acting in concert with the company. Acting in concert is acting of independent persons made in mutual understanding to acquire, assign or exercise voting rights on determinate person for the purpose of enforcing a common influence on its management, running a business, occupation statutory or supervisory body or else influence the behavior of such a person. Those who act in concert are obliged to fulfill the obligations arising therefrom jointly and severally.

Concerted practices must be active, it may not be concluded a special agreement and must follow the legally relevant target. Not every action is automatically acting in concert.

Acting in concert is thus a deliberate alignment that may not be permanent. The law does not define exactly acting in concert, but establishes a rebuttable presumption.

1. persons who have a relationship with the company, i.e. legal person and its statutory authority, persons in their direct control scope, a member of the supervisory board, liquidator, bankruptcy, arrangement or forced administrator
2. controlling and controlled entities
3. persons controlled by the same person
4. entities constituting the Group
5. Ltd. and its partners, public trade company and its partners, limited partnership and general partners. These partners act as persons in concert
6. relatives - as Civil Code defines in § 116
7. investment company and its investment fund or pension fund

The burden of proof that the persons mentioned above are not acting in concert carries any person who testifies presumption.

Concerted practices have, according to the Commercial Code, inter alia, the following legal consequences:

1. constitutes control of the company, if the persons acting in concert have votes enough to promote decisive influence over the management and operation of the enterprise,
2. excludes the right to claim damages for non-payment of the harm that was caused by the implementation of the instruction of the controlling entity if all shareholders were acting in concert,
3. excludes the exercise of voting rights at the AGM in cases provided by law (when deciding whether to him or another person acting in concert to be excused duty or whether he or person acting in concert to be removed from office for the infringement) unless all shareholders are acting in concert,
4. constitutes an obligation to make a takeover bid for control of the company with registered participating securities except for exceptions set by law
5. consitutes reporting duty of voting rights

The provisions of § 66a paragraph 7 characterizes the controlling agreement (agreement on dominant influence) as a contract under which different entities undergo a common management. In the legislation concerning the joint-stock company, the controlling agreement is further defined in § 190b - controlled entity is committed to the managing person to undergo common management.

The component of the contract may also be a clause on liability of the controlled entity to convert gain or its part to the managing entity - refers to the profit transfer agreement - § 190a.

Controlling agreement must be in writing. Cancellation may only be to the end of the reporting period, but not retroactively. Controlled entity may withdraw from the contract - if the controlling party failed to fulfill its obligations, or if the court deems compensation standing outside shareholders as unfair. Controlling agreement must be approved by the General Assembly by ¾ majority (or higher - according to the Articles of Association) - the decision of the General Assembly must be a notarial deed. Controlling agreement shall become effective on the date of publication of the notice that the contract is based in the collection of documents at the Registry Court. From this day, the time limit starts to exercise the rights standing outside shareholders to compensation if the contract restricts the option to exercise such rights by time limit.

Community of non-restricted number of people.

The cooperative is a community of non-restricted number of people which was founded for the purpose of securing business or social, economic or other needs of its members. (eg housing association, credit union).

It is established under the Constitution of the Czech Republic and carries out its activities in compliance with Act No. 6/1993 Coll., on the Czech National Bank (pdf, 137 kB) and other regulations. The primary objective of the CNB is to maintain price stability. The CNB supervises the banking sector, the capital market, the insurance industry, pension funds, credit unions, bureaux-de-change and payment system institutions.

Dematerialized shares must contain numeric designation in cases where the law so provides. This kind of security has no material form.

Are you interested in a JSC? Read more on our service setting up a JSC!

DIČ is a tax payer identification. Tax number consists of two letters identifying the country code and tax number. In the Czech Republic, the country code is CZ and the rest is identification number of a legal entity. DIČ indicates the identity of the taxpayer and should be used whenever dealing with the tax authority.

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The part of the profits of a joint stock company which is distributed among shareholders at the decision of the General Meeting. 

For shareholders, it constitutes their income from the holding of shares. The amount of the dividend is determined by the General Meeting and expressed as an amount per share on the face value of the share. The amount of dividend is determined as a pro rata share (the ratio of nominal value of shares to the shareholders aggregate par value of all shares; other rules may be for the preference shares) on that part of the net profit of the joint-stock company for the accounting period, which is approved by the General Meeting and within the law to be distributed.

We can distinguish several ways of division of companies:

1) the formation of new companies - a company ceases to exist, its assets are transferred to the acquiring company and its shareholders become shareholders of the successor company (A canceled> formation of B and C) only the cancelled company is concerned

2) the division by merger - company ceases to exist and is divided, and these parts passes to other existing companies (A canceled and divided into two or more parts> parts will be merged into existing companies B and C) merging and acquiring companies are involved

3) a combination - being acquired and the acquiring company must have the same form

Entrepreneur is a person who is authorized to carry out a business, or is registered in the Commercial Register.

Entrepreneur - according to the definition contained in § 2 of the Commercial Code. A business is defined as a systematic business activity conducted by an entrepreneur independently in his own name and on is own responsibility for profit. Second paragraph contains an additional criterion, making the list of four groups of entrepreneurs:

entrepreneur is any person registered in the Commercial Reggistry - commercial companies, cooperatives, other legal persons as provided by law and foreign persons. According to § 3 paragraph 2, a natural person may be registered in Commercial Registry at his own request
entity running a business under a trade license
entity running a business on the basis of other than trade license
natural person engaged in agricultural production by optional rules
Entrepreneur is not a person who carries out a particular profession as an employee or as a companion of commercial company - does not carry it independently. With regard to the representation of another legal entity, our legislation does not solve the problem, whether an agent is an entrepreneur. On the one hand, defines the business, on the other hand, sees entrepreneurs as well as those who represent another (agency agreement, contract of commercial representation are regulated as relations between businessmen).
Summary: Entrepreneur is a person who is authorized to carry out a business, or is registered in the Commercial Register. It should be noted, however, that a joint-stock company and Ltd. can be established without the business objective. They are registered in the Commercial Registry - they are entrepreneurs by legal form.

The room in which certain business activity is carried out.
Definition of the Commercial Code is very broad, the establishment in this definition means (any) space "within which the business activities are carried out" - there"s no connection with the authorization to do business in this space (resulting from the ownership or lease, etc.) and could mean that the establishment could became the space illegally occupied by entrepreneur.

In a similar way, the establishment is defined by the Trade Licensing Act, § 17 paragraph 1, although it is defined only for a trade - specifically declares a establishment also stand, mobile shop and similar devices used for the sale of goods or provision of services. Establishment within the meaning of the Trade Licensing Act does not include an establishment in which the activities other than those of the tradesmen take place. For example, physician or lawyers offices, tax consultants, etc. are not trade licensing establishments, but will be establishments within the meaning of § 7 of the Commercial Code - public obligations of the Trade Licensing Act are not applicable for other than trade establishment.

The establishments must be marked by the firm of the entrepreneurs, which may be completed by the name of the establishment or other distinctive signs.

This term is used in business practice promiscue with the term company establishment. In reality, the term establishment of the firm is broader and includes not only establishing the company as a legal entity, but also the physical entry of the person in the Commercial Register, which is also for individuals in certain cases mandatory. The term "firm" is not equal to the term "company", but it is the name under which a person (whether natural or legal) is registered in the Commercial Register.

Euro interbank offered rate

The rate at which a prime bank is willing to lend funds in euro to another prime bank. The EURIBOR is calculated daily for interbank deposits with a maturity of one week and one to 12 months as the average of the daily offer rates of a representative panel of prime banks.

Ready made SE

European joint stock company.

SE is a joint stock company incorporated under the laws of the European Union. The legal regime for this company is multi-layered and resources come from the Regulation on the Statute of the company articles of association or the laws of a Member State. Methods of establishing a European company as defined in the relevant regulation - mergers, the establishment of holding companies, the establishment of a subsidiary or a subsidiary transformation.

Based on the Council Regulation No 2137/85 establishing a European Economic Interest Grouping (EEIG). It is effective from 1 July 1989, with the exception of Articles 39, 41 and 42 which entered into force as from the entry into force of the Regulation. In the Czech Republic effective from 1 May 2004.

The basic purpose of regulation is to facilitate cooperation between entrepreneurs from different Member States (no need to set up a company under national law, reporting directly to European law).

EEIG differs from cooperatives and commercial companies in the CR by activity, which must meet the following conditions:

1) Positive definition of the activity:

• the activity is intended to alleviate or develop the economic activities of its members, as well as to improve and increase the results of those activities, 
• the association"s activities must be related to the economic activities of its members, 
• activities of the association may be only ancillary activities in relation to the economic activities of its members

2) The negative definition of the purpose of the association:

• purpose of the association is not to achieve its own profit, but to support profit growth of members, the association can generate profit, but it should be divided among the members, 
• association may not exercise executive or supervisory power over the actions of its members or other business activities (can not be controlling person within the meaning of § 66a of the Commercial Code), an association may exercise in relation to its members and other persons EEIG coordination activities.

The Association can not carry out the activity instead of its members, but at the same time its activity can not be independent of the activities of its members. Eg. association whose members are lawyers, can not practice law itself but only ancillary activities, such as organizing training, clients seek etc. Most EEIG were founded in services, 90% are private sector.

The association may or may not be a legal entity, it depends on the legislation of a Member State, it is always possible participant in substantive and procedural relationships.

Europen cooperative is the youngest trans-national form of business.

The Europen cooperative in many respects follows the European society, which brings the concept of classical company. The mandatory requirement of European co-operative company is the appendix "SCE". The basic principle of SCE is set by the Council Regulation No EC 1435/2003. It assumes issuance of national legislation to implement it in areas which are expressly referred to. The share of employees in the management of SCE is regulated by Directive 2003/72/EC. Both regulations take effect three years after the date of their publication in the Official Journal of the EC - the date of August 18, 2006.

The financial statements are set of financial reports compiled by an accounting entity for the accounting period, usually once a year, as of the last day of the accounting period.

These financial statements disclose the company performance during the given period.
The financial statements are:
Balance sheet (an overview of the financial position of the company)
Profit and loss account (an overview of the financial performance of the company)
Statement of Cash Flows
Statement of Changes in Equity
Notes to the Financial Statements

Professional bookkeeping

A firm - business name - is the name under which the entrepreneur is incorporated and which therefore must be used in his business. The term firm is commonly used as a synonym for the term business or for the term company, although it may not always be the same (the firm has a physical person, if he is registered in the Commercial Register).

Firm consists of a business name and supplement (for example Ltd. or, in the Czech Republic, a. s. for joint-stock company).

Foundation methods

• system of free foundation - the company is founded and established as a legal entity simultaneously with the signing of the social contract (SS)
• concession system - valid foundation requires authorization
• normative system (registration) - conclusion of the social contract is sufficient to found the company, but the company as a legal entity is created by registration in a public register
• establishment in the Czech Republic - a legal act of creating a basic substantive prerequisite for the formation of a legal entity

Legal act by which the company is founded is

• Social Contract
• Memorandum and Articles of Association (joint stock company),
• Deed (Ltd., joint stock company, if one founder, in the form of a notarial deed)

The essential elements of these documents must be the same, must be the official verification of the authenticity of signatures of persons who based company (legalization; social contract - Ltd. and Memorandum of Association - JSC must be in the form of a notarial deed - Notary Code introduces a new type of notarial record of the decisions of a legal entity which establishes the responsibility of the notary for compliance of notary recorded facts with the law). It is possible that the social contract shall be signed also by the founder"s agent, if it has a written power of attorney with notarized signature of the principal.

Establishment of the company - the company is estableshed on the day on which it was registered in the Commercial Register (first registration of the company).
Between the foundation and the establishment it is a so called preliminary society.
The application for registration must be submitted within 90 days from the foundation of the company, eventually, from receipt of the trade license or other business license - after a missed period the entrepreneur can not be registered (it is a substantive condition of the company establishment).

Mergers or fusions of companies (OS).

Legal effects of mergers occur on the date of entry into the Commercial Register.

• merger - extinction of the company (preceded by dissolution without liquidation), its assets transferred to another company (A, B> B canceled and the property passed to A> A), shareholders of the acquired company become shareholders of the acquiring company, both acquired and acquiring companies are being involved
• fusion - extinction of 2 or more companies, assets transferred to the acquiring company (A, B> both canceled> C rise), partners remain, only acquired compaies are involved.

The highest authority of the joint-stock company carrying out the most important decisions.

A body through which shareholder applies his rights. The General Meeting shall meet at intervals determined by the statutes, collective agreement or charter, at least once a year, up to six months after the end of the previous accounting period. It must be duly convened, shall be a quorum. Regular - Annual General Meeting:

• Decides on the annual financial statements, on how to deal with profit or loss
• Evaluates the activities of the bodies
• Discusses the annual report on the activities of OJSC and its Assets

An extraordinary general meeting may be summoned by a statutory body (committee, board of directors) or by minority shareholders if necessary. Attended by members of the company - the shareholders.

The General Meeting is the highest authorityof a Ltd.

The General Meeting decides in particular on conceptual issues and controls the other authorities. The shareholders exercise through the General Meeting their right to participate in governance of the Ltd. The General Meeting is the body of a collective nature, the presence of all partners is not required.

The power of attorney, which applies to all legal acts. This power of attorney is not limited by time.

Ready made LLC

The parent company is a company that stands on the top of a holding company and controls the subsidiaries.
The net holding is called a case where the sole scope of business of the parent company is the holding and management of ownership interests and control of subsidiaries.

Holding company represents the most common use of offshore company in Great Britain

The IBAN (International Bank Account Number) is an account number format defined in the ISO 13616 international standard. In 2007 this standard was aligned and harmonized with the European Standard EBS204 (pdf, 211 kB) issued by the ECBS (European Committee for Banking Standards) in 1996.
The specific form of an account number in IBAN format is generated by the bank which maintains the account.
The international account number format is defined by the standard in the following way:
The IBAN can consist of digits and capital letters
The IBAN has the following structure:
2 characters - ISO country code (CZ for the Czech Republic)
2 characters - check digits allowing program control of the account number - protection for situations where the account number is entered incorrectly
max. 30 characters - bank code and account number
The IBAN has two formats - electronic format (without blanks) and written representation (with groups of 4 characters separated by blanks) Each country stipulates its own structure by
assigning fixed positions for the bank code (or bank branch code)
assigning fixed positions for the account number The IBAN was introduced in order to support automatic processing of cross-border orders, to accelerate, simplify and reduce the costs of cross-border payments, and, finally, to reduce the occurrence of mistakes due to account numbers being entered incorrectly.

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An industrial design consists of the creation of a shape, configuration or composition of pattern or color, or combination of pattern and color in three dimensional form containing aesthetic value. An industrial design can be a two- or three-dimensional pattern used to produce a product, industrial commodity or handicraft. Legal protection of an industrial design by its registration in the industrial design register is intended for designer solutions.

Industrial design is understood to mean appearance of a product or its part, consisting particularly of signs of lines, contours, colors, shape, material structure of the product per se or ornamentation. It involves a visually perceivable feature or component of a product. It does not involve engineering, structural, functional, material or another nature of it.

The interest is the monetary reward for lending money. The lender, who may temporarily lack some amount of money, lends this money to the debtor. In other words, a lender makes a loan to the debtor. To the agreed period, the loan amount - called the principal – must be returned along with the increase, which is called interest.

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An interest rate is the amount of interest due per period, as a proportion of the amount lent, deposited or borrowed (called the principal sum). The total interest on an amount lent or borrowed depends on the principal sum, the interest rate, the compounding frequency, and the length of time over which it is lent, deposited or borrowed.

Company establishment

An investment company is a legal entity whose scope of business is the collective investment.

Collective investment of and investment company is based on:

• Creation and management of mutual funds, or
• Management of investment funds under the management contract.

The investment company must have a permission of the Czech National Bank (CNB), the firm contains designation "investment company". The CNB shall grant authorization only to such a JSC which, among other things, issues only registered shares, whose headquarters and real seat is in the Czech Republic, which submits a business plan and design of the organizational structure of the investment company, has paid up share capital. Investment company may not issue bonds. An investment company may manage assets in a mutual fund or other investment company or property of an investment fund, which has not concluded a management contract.

A summary of the values entered in the company to acquire or increase participation in the company.
The contribution may be tangible or intangible asset, which is capable of being the subject of ObčPr relations, is transferable, and is appreciable in money.

Contribution can be:

• financial
• non-cash - only estate which can be of economic use in relation to business activities of the company and the economic value of which is not identifiable

Contribution may also be:

• real estate (only if the company will have the seat or workshop there or it is real estate agent etc).
• business (part; contract for the investment to the company)
• know-how
• security (company must be a bank, investment fund, dealer in securities, etc.)
• receivable

The company, whose capital is divided into a 
determinate number of shares.

The property is divided equal parts - tradable shares. They are traded on the capital markets. Purchasing the shares a person becomes a shareholder in a joint stock company. Thus he obtains a part of the company"s value and shareholder rights: the right to dividends and vote at the General Meeting. Shareholder shall be liable for the loss of the company only up to the amount of its share. The joint stock company belongs to the most common forms of business.

Under Czech law, in determining which courts hear and decide a particular thing, the terms judicial or official powers and jurisdiction are used.

In international law, the term jurisdiction usually means individual states (based on their sovereignty). In the case of federation it can also be a single province. There are also countries like the United Kingdom, where there are four countries and three different jurisdictions (England and Wales, Scotland, Northern Ireland). In international law, there are two types of jurisdiction, territorial (each is subject to the power of the state where they reside) and personal (citizen subject to the jurisdiction of the home country, even if not exactly in its territory).

The jurisdiction can also be spoken on in case of international organizations (eg the jurisdiction of the International Criminal Court) and multinational organizations (eg the jurisdiction of the European Union).

Our professional legal services can be used while setting up a company, buying a ready made company or founding an offshore company in one of tax havens.

The simplest type of capital company.

It can have from 1 to 50 members. The minimum share capital is CZK 200,000, each shareholder may participate only by one deposit at minimum amount of CZK 20.000, - (10% of capital).
Shareholders are liable jointly and severally for the liabilities of the company up to the sum of the outstanding contributions of all shareholders in accordance with the registration in the Commercial Register.

A process regulated by law in which an extrajudicial settlement of property relations of an expiring legal entity.

Started obligatorily, unless the law expressly determines that it is not necessary (legal successor). The purpose is to clarify the financial situation of the trade company.

Liquidation is carried out by the liquidator and after its termination, it may result in deletion from the Commercial Register.

Statutory authority of a limited liability company.

Duties of the managing director are to provide proper management of mandatory records and bookkeeping, of a list of members and to inform the members about the company. The managing director may be a partner or another person appointed by a General Meeting.

A document founding the business company

In case of one founder the memorandum is replaced by the founder"s deed.

Setting up a tailor made JSC

A mutual fund is a collection of assets that belong to all owners of mutual fund shares, the shareholders, in proportion to shares owned.

Finances to the mutual fund are collected by an investment company. Mutual fund share is a security that represents a shareholder"s share in the assets of a mutual fund and other rights. A mutual fund may be open or closed.
a) open mutual fund
It does not limit the number of issued shares, which are connected with the right of redemption by the investment company at the request of its owner, it doesn"t have to have a nominal value. In the case of purchase, the investment company will purchase a mutual fund share for its current value announced to the date on which the shareholder has received a request for redemption.
b) closed mutual fund
Investment company does not redeem mutual fund shares. The name of the fund consists of the name of the managing investment company and of identification of closed mutual fund. The closed mutual fund is set up for a fixed period, which must be stated in the statute.

A natural person is the term used to describe one of the two types of legal entities, which must be distinguished from those in the usual meaning (people) from other types of persons that the law recognizes as a separate entity (legal person). E. g., an individual may be a shareholder if the shareholder is a natural person, and shall, on receipt of stock certificates, show a valid identity document.

When starting your business, you can use our service of setting up a tailor made LLC

The service of nominee director - an authorized agent - means providing of a person who performs legal acts for the company pursuant the instructions of the shareholder (owner).

The relationship between the nominee director and the real owner shell be based on a contract to eliminate the risk of damage to one of the parties in case of unreliable negotiation of the counterpart. The provider of the service is fully responsible for any activity of nominee directors, it is of his own interest to choose for these positions exclusively reliable and proven people. Relations between the owner and nominee persons are treated by contract, each step of nominee persons is carried out only on the instructions of the beneficial owner of the company.

Nominee services are usually constituent part of offshore services

The principle of nominee services is to provide credible, respectable and trusted persons into the statutory and supervisory bodies. For a limited liability company a managing director is provided, for joint stock companies it is a member of the Board of Directors and Supervisory Board members.

The nominee service provider is always fully responsible for any activity of nominee directors, it is in his own interest to choose in these positions a reliable and proven people. Relations between the owner and nominee persons are treated by contract, each step of nominee persons is carried out only on the instructions of the beneficial owner of the company.

Are you interested in setting up an offshore company in one of tax haven?

Nominee shareholder is a credible, proven person who contractually agrees that he gives up all shareholder rights and declares that he will only act in accordance with the instructions of real shareholder.

Services of nominee shareholders can be used to protect the direct connection to the offshore company.

After the establishment of the company, the authorization decision of the company in Commercial Register can not be cancelled and you can not seek a declaration that the company did not incur.

Nullity may be declared by a court (without proposal) for the following reasons:

• absence of a social contract, memorandum of agreement or articles of association or not respected their required form
• real business is illegal, or contrary to public policy
• the social contract, memorandum of agreement or articles of association do not contain information about the company or the shareholders or the amount of basic capital (if it is prescribed by law) or info on line of business
• was not observed minimum repayment of deposits
• all the founders are incapacitated
• number of founders is contrary to the law (sole)

By that decision the company enters into liquidation, such decision shall be entered in the Commercial Register and published in the Commercial Bulletin. Legal relationships that a company has entered invalid, are not affected by the invalidity and are therefore valid.

Offshore companies are companies that are based in a tax haven because of the anonymity or protection of property, tax optimization and efforts to reduce the tax burden.

Originally offshore company comes from the Anglo-Saxon business law used in most of the countries that were under the English colonial administration. (most of the destinations that offer the possibility of establishing this kind of business are located on the island = offshore).

Advantages of offshore companies:

• - basic capital is not required
• - rapid establishment of the company
• - tax advantages - if the company does not develop its activities in the home country, the tax liability is fulfilled by flat annual fee
• - anonymity - the possibility of using nominee services

The most popular structure is a foreign offshore company as the sole shareholder of Czech companies, other structures are possible and there are many, depending on the needs.

see Warrants - options

1) The power of attorney is a unilateral act (usually in the form of a declaratory instrument), by which the principal (represented) gives note to third parties that the authorized (representative) is authorized to act for him in particular matter.

2) The agreement, which is concluded between the principal (represented) and agent (representative) and empowers the agents to act in particular matters for the principal (represented).

Virtual office for your company

A company that was already founded (by the founding document), but that was not incorporated yet (registered in the Commercial Register).

Who acts on behalf of the company before its foundation, is committed from this decisions, (more people then jointly and severally) - if companions (or organs of the company) approves this decision within three months from the date of the company incorporation, then these decisions have been committed since the beginning of business company.

Liabilities that are not related to the creation of the company, and liabilities that are not at the expense of the founders, the company may not assume (unless they are signed with a suspensive condition of the company and approved by the shareholders, or authority) > founders must provide a list of these negotiations and submit them for approval to the shareholders (the authority within 3 months).

Persons who take over on behalf of the company other commitments are committed from this decision and responsible for damages.

Prague Interbank Bid Rate shall mean the reference interest rate on the interbank deposit market calculated (fixed) by the calculation agent for the Czech Forex Club from the quotations of reference banks for the purchase of deposits (bid).

Setting up a company

Prague Interbank Offered Rate shall mean the reference interest rate on the interbank deposit market calculated (fixed) by the calculation agent for the Czech Forex Club from the quotations of reference banks for the sale of deposits (offer)

Ready made companies

A person who has authorized another person the power of attorney to represent him in certain matters.

Ready made SE

The principle of formal publicity is based on the fact that the Commercial Register is accessible to everyone regardless of the presence or absence of his legal interest (§ 27/1 of the Commercial Code).

Everyone has the right to inspect, make copies and extracts, on request, the registration court issues a certified complete or partial copy of the entry or document stored in a collection of documents, statement or confirmation of a particular entry or confirmation that the Commercial Register does not contain some records.

The case file regarding the company (not the file that is based on the procedures for some entries, there can be consulted only with power of attorney) or to the Commercial Registry can be viewed at the court and copies or extracts of them can be obtained during office hours under the supervision of an authorized court staff; room for this purpose must be clearly marked and placed on the orientation board of the court (§ 8 of Decree No. 37/1992)

The law does not absolutely set right to the court to limit in any way the accessibility of the collection of documents - such court procedure would not only be contrary to the law, but also in violation of the Constitution because of the Charter states in Article 2, paragraph 2 clearly: "State power can be exercised only within the limits set by law and in the manner prescribed by law. "- Court action belongs clearly within the scope of state power and is fully subject to the law.

The manifestation of the principle of formal public is the obligation of the registration court to disclose records - the scope and manner of publication of the deposit of the document in the collection of documents is regulated by implementing regulation - Government Regulation 503/2000 Coll., on the Business Journal; the Business Journal is issued by the Ministry of Justice via publishing house.

It is a principle of public trust (faith) = data entered in the Commercial Register are legally effective externally even if they do not correspond to the actual state, providing that conditions of the principle of publicity material (§ 27/2 of the Commercial Code) are applied.

positive side of the principle of publicity - records are legally enforceable against everyone (even the governmental agencies) from the date of publication of registration, but at the same time a person who knew about these facts previously, can apply them from the date of registration; the burden of proof of good faith of third people lies with the registered entrepreneur

declaratory entries - it is possible to actually apply from the time the third person hears them, but can not be relied upon prior to publication, or the end of the sixteenth day after publication (the enforceability of the special treatment given to the effectiveness of the registered facts - so if a certain fact is already effective because of the publication of the entry, but has not passed 16 days from publication of the entry and a third person proves that she could not know about it, it is not possible to enforced it against her)

constitutive entries - legal effects occur only at the time of publication, before the publication of the entry that effects cannot occur, but even here can not be relied upon up to the sixteenth day, if a third party proves that she could not know the facts. In other cases, the effectiveness starts from the date of disclosure

if there is a discrepancy between registered and published data or stored and disclosed documents, it is not possible to argue the published version against third parties, third parties may nevertheless rely on the published version, unless the registered person proves, that they were aware of the data entered in the Commercial Register or the contents of documents stored there

negative side of the material publicity - it is not possible to argue against a third party acting in reliance on a record that it does not reflect reality - the limits of the application of that principle is therefore trust of a third party - if such person knew or should have known about the differences between the registered data from reality, the actual situation is crutial compared to the Registry - this will be particularly the case where a third party will be the person to whom the record relates, specifically advised of the difference; burden of proof borne by the person whose registration is concerned, therefore, the written form of notice will be necessary in practice

Particularly broad and against third parties as to the effects of illimitable power of attorney, which gave permission to proxies to represent the business to a certain extent - empowering to all legal acts that occur during operation of the enterprise:

• proxy may not burden property without the express approval of the General Meeting when granting power of attorney
• procuration may only grant an entrepreneur registered in the Commercial Register
• proctor may be a natural person only

types of procurations:

• basic - no permission to burdening real estate and expanded - with permission
• individual - each proxy is entitled to act on behalf of entrepreneurs and sign separately and collective (group) - the synergy of at least two secretaries are necessary to negotiate and sign

Commitment to transfer profits can be arranged or in agreement on dominant influence, or separately - legal instrument is a profit transfer agreement - § 190a. Controlled entity has a commitment to transfer profit to the controlling person, the controlling person has the duty of annual settlement with every out standing shareholders. This settlement must be proportionate to the economic performance of dominated society. These commitments must be included in the contract, otherwise the contract is void. However, if the compensation is not adequate, the determination of the amount of settlement may be claimed in the court within three months from publication of the notice on the collection of the contract documents. Otherwise, the same as the agreement on dominant influence.

Private law prohibition, the violation of which is associated only with the responsibilities provided for in § 65 of the Commercial Code, it will be applied only on the initiative of the company itself, eventually. its shareholders, but it is not excluded criminal responsibility.
Tool that is provided to partners to protect the interests of the company. For different companies are different prohibitions of competition - for example, LLC only for agents, for public trade company for all partners, etc.
Prohibition of competition in the Commercial Code restricts business and to some extent dependent activity of members of company bodies and allows application of penalties for its violation.

If the company decides to apply sanctions can choose between a requirement that the violator gave the benefit of the trade in question, or transfer rights to the company - in the first case, the trade will be executed according to the result of the infringement (breach of contract with the non-competition) and only yield will be handed over to the Company, in the latter case, the violator shall transfer the rights arising from the resulting relationship to society - only in the second case, a change resulting from the contractual relationship will be, in either case, the result of violation of non-competition shall not be invalidity of legal actions - Company therefore can not invoke nor relative invalidity of such an act, because the law in this case provides for a specific penalty = deviation from § 39 of the Civil Code - although it is a legal act made in violation of the law, the result in this case is not nullity.

If the company suffered damage by the violation of prohibition of competition is entitled to seek compensation under the conditions of § 373 et seq. Commercial Code without regard to the aforementioned special penalty, the right to compensation may not be applied - in this sense it is a free decision, if they reach their claim, but in terms of members of the governing bodies must realize that if of its own accord law does not apply, it may cause damage to the Company, for which bear legal responsibility, it could also be the fulfillment of the crime of violation of the duty to administer foreign assets pursuant to § 255 of the Penal Code.

Ready made company is also known as Shelf company or SPV company.

Registered shares are issued in the name of a specific legal or natural persons. A type of security with regard to transferability. A registered security bears the name of the beneficiary. Transfer takes place through cession and the issuer must be notified thereof (or, as the case may be, grant authorisation). The advantage is better protection against theft.

Defined for JSC and Ltd. where it is obligatory to create the reserve fund from net income for the current accounting period after taxation. 

The reserve fund is one of the liabilities in the accounting and one of own resources of company assets. The reserve fund can only be used to cover losses.

Beyond the scope of the general provisions of the use of the reserve fund provided for in § 67 goes the provision of § 216a.

Reserve Fund may be applied under certain conditions, to increase the share capital.

The loss is if the financial statements show that the company"s costs are higher than its revenues. The company has no obligation to cover the loss using the reserve fund. The reserve fund may not be made up of funds deposited with a bank or fast liquid property values, may not be established since the establishment of the company.

The reserve fund can also be created by a partnership, then use of its funds is not earmarked.

Share (usually money) that belongs to the partner whose participation in the company expired, or his heirs or other successors (excluded for JS). The company must draw up interim, regular or extraordinary financial statements as of the date of termination of the participation of this partner in the company. The settlement amount is calculated by the equity (if the social contract does not stipulate that a check of the net assets shall be based on expert opinion), the share is payable 3 months after approval of the financial Statements (or receipt of the expert"s report to the company) - if companions or body do not approve the financial statements without a serious reason, the settlement is paid in the same period.

A security stating that the owner put a capital to the joint-stock company.

A security which gives shareholders the right to participate in the management of a joint stock company, in its profits and in the liquidation balance upon the dissolution of the company, and the pre-emptive right to newly issued shares, in accordance with the Commercial Code and the Articles of Association.

Basic capital of the company, which must be expressed in Czech currency and the amountof which varies depending on the type of company. The share capital consists of the founders" deposits (cash, respectively expressible by money) or during the operation of other deposits by their owner.
The creation of share capital is mandatory by law for limited partnership, for limited liability company (minimum 200.000, - CZK) and for join-stock company (the minimum amount of 2,000,000 CZK without a public offering or at least CZK 20 million with public offering of shares).

The shareholder of the company is the owner of shares to which are attached rights of the shareholder. According to its share of the total number of shares may be minority or majority. Greater number of shares held is greater opportunity to influence the activities of joint-stock company (a. s.). The rights of shareholders may be exercised even before issuance of shares or interim certificates - from the date of registration of the share capital in the Commercial Register. The rights of shareholders are proprietary - the shareholder participates in the profits and in the liquidation balance upon the dissolution of the company, and the pre-emptive right to newly issued shares. He has the right to participate in the management of a joint stock company.

Ready made joint stock company

Legal entity authorized to organize at a designated location at a specified time and through authorized persons demand and supply of registered securities, investment instruments that are not securities, respectively other capital market instruments, to the extent permitted by § 2 of the Securities Exchange Act.

Tailor made LLC meeting exactly your business needs

A security replacing temporarily share.

Security replacement share when the Company increased the share capital by subscription of new shares, the underwriter fully repay the issue price of shares subscribed, but the capital increase has not yet been entered in the Commercial Register.

The supervisory authority with supervisory powers.

Collective body, its membership is at least 3 and to be divisible by three of its elected chairman. Supervisory Board is incompatible with membership of the Board clerk or a person authorized to act on behalf of and Members are elected for a term according to the statutes, a maximum of 5 years (the first term of office is one year from the date).

Profits of foreign companies (offshore companies) are taxed only negligibly, dividends of these companies are not subject to tax. Companies with leadership outside the country are generally exempt from income tax and have other tax advantages. Offshore society must comply with certain conditions: the company"s activities must be limited to business activities outside the country, the holders of shares must be foreigners, and the company can not obtain finance from domestic sources. The aim is to attract foreign capital and make the country become major financial and business center.

Founding offshore company

Trade means the business under the Trade Licensing Act, it is therefore a narrower term than business in general, this is just the business run under the Trade Licensing Act.

Business activities excluded from the scope of Trade LicensingAct by special regulations is not a trade.

Activitiy excluded from the scope Trade Act or activity uncontrolled by any law, even if the profession is not listed in Annexes of the Trade LicensingAct, is the trade and in this respect the Trade LicensingAct is subsidiary general arrangement for business conditions.

Activities that are not trades - an exhaustive list of § 3 and 4 Trade Act

• business performed only by natural persons (e.g. freelancers)
• business usually performed only by legal persons (such as state monopoly, banking, insurance, the so-called primary production)
• rental properties, apartments and commercial space is a trade, only if in addition to the rent the landlord also provids other than basic services covering the proper operation of real estate, residential and commercial space (§ 4 Trade Licensing Act)

Trade licensing supervision follows first of all the essentially fulfilling duties given by the Trade Licensing Act and other specific regulations and whether the tradesmen comply with the conditions of a trade that are stored in the concession deed.

Checks are carried out by the trade licensing office within its scope, it monitors whether and how the obligations set by the Trade Licensing Act, by the provisions of special laws relating to trade business and the conditions imposed on trade concession deed are fulfilled.

Supervisory bodies of commercial activities are trade licensing offices, which are made up of a system of district trade offices (departments of district offices), local trade offices (departments responsible for local authorities) and the capital city of Prague trade licensing departments of urban areas defined by the Statutes of Prague and the Department Prague City Hall and Trade Licencing Office of the Czech Republic.

Competitive valuable facts in running a business that are unknown to other competitors and entrepreneurs.

Trade secret is information of business, production or technical nature related to businesses that have actual or at least potential tangible or intangible value, which is not generally known or reasonably ascertainable, by which a business can obtain an economic advantage over competitors or customers. Trade secret will have to be kept secret according to entrepreneurs" will and entrepreneurs also adequately ensure their confidentiality. Entrepreneur running a company to which the trade secret relates, has the exclusive right to deal with this secrets, especially to authorize its use and to determine the conditions of such use. Against violations or threats to trade secret rights he is entitled to take legal protection as in case of unfair competition.

Know-how (application of specific knowledge and experience emerging either to new or more effective solution of a problem, than that yet known). Not always the same as a trade secret, however, to some extent, the two groups overlap.

A trademark is a designation capable of graphical representation consisting especially of words, letters, numbers, colours, drawings or product shapes or packages, which serve to distinguish goods or services on the market. The application for trademark registration can be filed by any individual or legal entity. The Industrial Property Office (IPO CZ) carries out a formal examination to find out whether the application has all necessary particulars stipulated by the law followed by a substantive examination to find out whether the designation applied for is qualified for registration, for instance if it is not identical to any already registered trademark or whether it is not a generic name or descriptive denomination, misleading or false indication and the like.

This is a private association of people who come together for business purposes, ie for the purpose of continuing business activity in their own names and on their own responsibility to gain profit. For generic character is also considered that it is a legal person.

Commercial companies can be divided into capital and personal.

Among private companies belong:

• public company (minimum 2 persons conducting business under the conjoint name, according to § 76 et seq. Com. Code.)
• limited partnership (minimum 2 persons conducting business under the conjoint name of, § 93 et seq. Commercial . the Act.).

Among capital companies belong:

• limited liability company (LLC can be founded by a single person, maximum 50, § 150 et seq. Com. Code.)
• joint-stock company (may be established by one person, but must be legal, maximum number of people is not limited, § 154 et seq. Com. Code.).

In addition to capital companies and partnerships, which are inherent to Czech law, we can still distinguish a European Company: European join-stock company and a European Economic Interest Grouping

Partners or the competent authority may decide (possibly against the will of the minority shareholders) on the company cancelation and transfer of its assets to one partner (the majority, even physical person) residing in the Czech Republic.

Legal effects occur on the date of registration of the transfer to the Commercial Register. These are called private expropriation.

Change of the legal form of the company.

Change from Ltd. to JCS and the like. The company does not cease nor its assets are transferred, but there is a change in the internal legal relations and legal status of its partners. Effects of changes occur on the date of incorporation in Commercial Register.

Legal consequences of the fact that a person carries a business illegally:

• a person carries a business without authorization
• his/her business was forbidden (eg disqualification by judgment of the court, decision on suspending trade by Trade Office)
• although the person has a license to do business, but its activity is beyond the scope of such authorization

A person who carries out an activity to which by virtue of special legislation notification or permission is required, without such notification or permission, and persons carrying out such activities on behalf of another person, shall be responsible for any damage caused thereby, this does not affect their responsibility under special legislation.

Practices of a trader in respect of other competitors are deemed to be unfair if they are contrary to the requirements of professional diligence, may be detrimental to other competitors or consumers. Unfair competition is prohibited.

Unfair competition is especially:

• misleading advertising.
• misleading labeling of goods and services,
• creating the likelihood of confusion,
• free riding on the reputation of the products or services of other competitor,
• bribery
• detraction,
• comparative advertising,
• violation of trade secrets,
• endangering the health of consumers and the environment

Option is a condition precedent in the contract on sale of securities, according to which one party may during the option period express the will to confirm the contract (the publication of the option) or on the contrary silently withdraw.

For the establishment of option rights, a payment (option premium) can be arranged, which must be paid regardless of whether declared or not an option. The right option is transferrable; if transferred, goes with it both rights and obligations under the contract on security purchase. The transitions of liabilities not requires the consent of the lender. If the options are traded themselves, separate security is issued - in the Czech Republic not yet treated by law.

Similar to options in the Czech Republic are warrants, which may be published by the JSC. It is a security which gives the right to exercise pre-emptive right to subscribe for new shares or to acquire convertible bonds or preferred or to subscribe for shares that are issued to holders of priority bonds.