What is a €100 company?

EUR 100 – ideal for a one-person business where the client does not plan to take on additional shareholders (společníci) in the future. The founder's deed (zakladatelská listina) contains only the basic company details required by law. It is not possible to include any provisions beyond the mandatory minimum, such as share certificates (kmenové listy), special ownership interests (interests with voting rights only, with a profit share only, etc.), a quorum for adopting general meeting (valná hromada) resolutions other than that set by law, restrictions on managing directors (jednatelé) when acting externally subject to prior approval of the general meeting for certain acts, managing directors as a collective body, a legal entity as managing director, exclusion of the inheritance of an ownership interest, pre-emption rights of shareholders on the transfer of an interest, or a social enterprise.

A problem may arise where the company has several shareholders who wish to amend the memorandum of association (společenská smlouva); in this case a general meeting cannot be held (amending the memorandum of association falls within the powers of the general meeting only if the founder's deed so provides) and an agreement of all shareholders must be drawn up.

A practical example – clients with a €100 company want to replace a managing director and change the registered office. We have no choice but to draw up 2 notarial deeds (notářské zápisy): with the first we record the general meeting, which decides on the change of managing director, and with the second the agreement of the shareholders, which decides on the amendment of the founder's deed. (If the company has a single shareholder, we always draw up a decision of the sole shareholder and there is no such restriction.)

Clients therefore save on the company formation, but the subsequent corporate changes are likely to cost them more in the future.

Where to go next:
What is a memorandum of association?
Set up an s.r.o.