Novelization of the Business Corporation Act
Novelization of the Business Corporation Act, i.e. the Act No. 458/2016 Coll. by which the Act No. 90/2012 Coll., the Business Corporation Act (“the BCA”) is amended, was published in Collection of Laws (Sbírka zákonů) on 30th December 2016 and became effective as of 14th January 2017.
The novelization concerns only minor changes in the representation of employees in supervisory boards of business companies. Other provisions of the Business Corporation Act remain untouched by this novelization.
The new rules apply only to business corporations with 500 or more employees (i.e. only few numbers of joint stock companies) and are following:
- the number of the supervisory board members should be always dividable by three (Section 448 (1) BCA) and
- 2/3 of the supervisory board members are to be elected by general meeting, while 1/3 of the supervisory board members must be elected by the employees of the corporation. The Articles of Association may lay down a higher number of supervisory board members which should be elected by the employees of the corporation (but not higher than a number of supervisory board members elected by the general meeting). The Article of Association may also voluntarily opt in for the possibility that certain number of supervisory board members will be elected by the employees even if the company has less than 500 employees (Section 448 (2) BCA).
The affected companies have to put their Articles of Association and the structure of supervisory boards in compliance with new regulation within 2 years from the date of its effectiveness, i.e. by 14th January 2019.