We can help you maintain an inactive (dormant) Czech company. We will ensure that all required reports are filed, including remotely. Contact us if necessary, and we will prepare a plan of action.
What Reports Must an Inactive (Dormant) Company in Czechia File?
In short, even an inactive Czech company is required to file annual accounts showing no activity and maintain its registered office, even if the company does not conduct any business.
Annual Accounts for an Inactive Company
Even an inactive Czech company is required to file annual accounts showing no activity, reporting zero transactions and no tax payable. This is required by Czech tax law.
The director (jednatel) of a Czech legal entity is responsible for filing the company's annual tax return. At present, the tax return can effectively only be filed through the company's Data Box ("Datová schránka"), access to which is provided to every director of a Czech legal entity. The tax return itself can be prepared using the official portal of the Czech tax authorities, which provides specialised forms for this purpose. However, all interfaces and forms are, firstly, in Czech and, secondly, highly specialised. If you have never dealt with them before, it can be quite difficult to navigate them on your own without professional assistance (contact us if necessary; we provide assistance with filing annual accounts for inactive companies).
An inactive Czech company is required to file this report by 31 March each year (for the previous year as the reporting period).
Parts of the report must also be added to the Collection of Deeds ("Sbírka listin") of the Commercial Register after filing. In particular, this includes the balance sheet ("Rozvaha"), profit and loss statement ("Výkaz zisku a ztráty"), and notes to the annual accounts ("Příloha"). At present, this obligation can effectively be fulfilled when filing the annual report itself: you need to indicate that these documents should automatically be forwarded to the Collection of Deeds, and the Czech tax authority will send them there automatically.
If these annual accounts are not filed, sooner or later the company may enter so-called compulsory liquidation precisely because of its failure to comply with its reporting obligations. We have detailed information on our website about how quickly an abandoned company can be liquidated in Czechia; have a look if you are interested. In short, however, in practice this does not happen quickly and, moreover, does not always happen at all.
Maintaining the Registered Office
Every legal entity in Czechia is required to have a registered office. The owner of the property where the company is registered provides consent for the legal entity to have its official registered office at that address. In practice, in the vast majority of cases, a so-called "virtual office" is used when registering a company. This means that the property owner gives permission for the company to be registered there, although the company does not actually have an office at that location (this is legal and permitted under Czech law). Such consent is usually granted for a limited period and then renewed every year (after renewal, the registered office provider issues new consent for the renewed period).
The basic point here is that the registered office needs to be maintained (this is usually not very expensive, around EUR 100–200 per year). However, based on our practical experience, the actual situation varies considerably from one Czech company to another because providers of such "virtual offices" operate very differently. Some of them monitor renewals very strictly and, if the registered office has not been renewed, notify the Czech Commercial Register that the company's right to use the address has been terminated, which may eventually result in the company being liquidated. Others do not monitor this very closely, and companies remain registered at their addresses for many years without any problems.
We have detailed information on our website about what may happen if you do not renew the registered office of a Czech company; have a look if you are interested. Nevertheless, we strongly recommend monitoring the status of your registered office and staying in contact with the organisation or person who provides it.
Summary
If your company is inactive, file its annual accounts (even if they show no activity) and maintain its registered office, and your legal entity will remain in good standing.
