Glossary of terms

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.

The prerequisites for the establishment of a trade license are determined by the fact that only natural persons can meet them - the institute of the responsible representative, i.e. the natural person appointed by the entrepreneur who:

• Is responsible for the proper operation of the trade and for compliance with the trade licensing regulations,
• Must comply both with the general and special conditions of the operation of the trade according to the type of business operated,
• They must participate in the trade to the extent necessary,
• Must have permanent residence in the territory of the Czech Republic

Share (usually money) that belongs to the partner whose participation in the company expired, or expired to his heirs or other successors (excluded for JSC). 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.

Share is 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.

Share capital is basic assets of the company, which must be expressed in Czech  currency and the amount of which varies depending on the type of company. The share capital consists of the founder's 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 1, - CZK) and for joint-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).

Stock warrant is 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 Board is the supervisory body of the company with controlling powers.

It is a collective body with at least 3 members who elect a chairman from among their members (The number of members must be divisible by 3). Membership in the Supervisory Board is incompatible with the membership in the Board of Directors, clerk or a person authorized to act on behalf of the JSC. Members are elected for a term according to the statutes, for a maximum of 5 years (the first term of office is one year from the creation).

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

Trade secret is competitive valuable fact in running a business that is unknown to other competitors and entrepreneurs and according to the will of the entrepreneur, should remain unknown.

This includes, for example, all business  facts (e.g. lists of customers, suppliers, sales representatives, business plans, price calculations), manufacturing (e.g. procedures, methods, samples, non-patented inventions) or technical (e.g. drawings, attempts) of nature, facts related to the enterprise (exist in connection with an enterprise, its subject matter cannot be facts whose secrecy excludes the prescription or whose protection would be contrary to good morals) and others.

The trading company is a private association of persons who come together for business purposes, i.e. 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.