On 1 October 2022, the amendment to the UBO Act came into effect in the Czech Republic, which places obligations on Czech companies regarding their UBOs and specifies penalties for companies, which fail to comply with these obligations.
Under the amended UBO Act, the UBO of a Czech company is now any individual who ultimately owns or controls the company. This includes any individual who directly or indirectly, through another person or legal arrangement,
- holds an ownership interest or a share representing more than 25% of voting rights in the Czech company;
- has a right to a share exceeding 25% of the profits, other funds or liquidation balance distributed by the Czech company;
- exercises a controlling influence in a corporation or corporations, which, individually or jointly, have an interest in the Czech company exceeding 25%; or
- exercises decisive influence in the Czech company by other means (e.g. by a side-agreement).
Contrary to the previous legal rules, the option of Czech entities to register their local directors as the UBOs in the UBO register, which to some extent is publicly accessible, is now very limited.
This article was written by CMS partner Lukas Janicek and was first published on CMS Law-Now on October 13, 2022, available here.