An exercise in patience
Written by: René Jakl
Photo by: Věroslav Sixt
Any entrepreneur who has ever established a limited liability company, increased the equity of a joint-stock firm, or just changed executives has had the “honor” of becoming acquainted with the efficiency of the Business Register. Even the two-year-old amendment to the law has not brought any significant progress.
Delays in the courts that maintain the Business Register have resulted in uncertainty as to business relationships in many companies, thus preventing their economic development. At the end of the 1990s the situation became intolerable, and an amendment to the civil court code, effective as of 1 January 2001, stipulated an unambiguous obligation of the registry courts: to react to every application within 15 days of its submission. According to Denisa Přibylová of the Dvořák & Přibylová law offices, such reactions should consist of the execution of acts aimed at resolving the matter. And how do things actually look more than two years after the amendment took effect? “It’s terrible. It’s as if the fifteen-day deadline had never been set by law,” complains Přibylová. “Some courts completely ignore it.” An unnamed registry court outside of Prague allegedly failed to react to her registration application until six months later, and then she only received a request for additional information that the law does not call for.
Although bribes for accelerated registration are a well-known secret, hardly anyone dares to publicly criticize the system. One of the few was member of parliament Hana Marvanová, but the only response she received was a demand for evidence by the offended courts. Přibylová proposed to resolve the delays by numbering submitted applications in the order they are received and requiring that they be resolved strictly in chronological order. That would have eliminated the possibility of accelerating a particular registration, also thus reducing the motivation to put off other applications. A radical solution could be the transfer of the registry courts’ agendas to state-accredited private entities. But until then, Přibylová advises patience – because although an entrepreneur/plaintiff may well win any dispute about an unreasonable delay on appeal, this could lead to blocking any changes in the register for years.
This article was prepared in cooperation with the law offices of Dvořák & Přibylová.