Czech Business Today

In June 2008 the European Commission adopted proposal for European Private Company statute (SPE) as a part of the Small Business Act. Its aim is to allow European SMEs to use one standardized legal form for cross-border activities in the European Union. After long and detailed discussions, reports and consultations, the Commission submitted a proposal for an accessible (cheap), open and flexible statute. SPE companies will be able to set up and create branches with the same structure in any Member State. Unlike big multinationals, SMEs were waiting for the single statute for a long time. To enhance cross-border trade in the EU, SMEs should also have the possibility to use a uniform statute reflecting their needs, containing minimum of references to national laws and decreasing costs when setting up a company abroad. An unpleasant surprise came during the Council’s meeting last December, when the SPE proposal was not immediately adopted by the Member States, who instead decided to take time for its further examination. SPE was delayed. However, the Council’s (non-) action is partially positive. It gives hope to SMEs that the document will be reviewed and adapted to be more in line with the initial proposal. Advantages for SMEs contained in the Commission proposal have been reduced to a minimum in the December document, and hence it would not fully satisfy SMEs expectations. Quick action is needed now to resuscitate the initial work of the Commission before its good intentions die. 

In the Czech Republic, the SPE statute corresponds to the limited liability company statute called společnost s ručením omezeným (or ”s.r.o.”). The minimum capital required in the Czech Republic for a limited liability company is around EUR 7,400. SPE, as proposed by the Commission, could be more competitive and cheaper. On the other hand, it would bring stricter rules regarding employees’ participation. In the Czech Republic, only listed companies (corporations) with more than 50 employees are obliged to enable employees to elect their representatives in the Board of Trustees. Setting up a company in the Czech Republic costs approximately EUR 20,000 Euro and requires ten different procedures lasting seventeen days. Use of the SPE would allow the companies to save the set-up costs and also those for administration (around EUR 15 000). SPE could facilitate and enhance cross-border trade. Czech companies support the EC proposal for SPE and require: 

• Low and competitive minimum capital requirements
• The least participation of employees possible
• Possibility to have the registration and main office in a different Member State
• Minimum of references to the national laws