Risks buying an old s.r.o. or ready-made s.r.o. company
Warning: Buying a previously-owned or ready-made 'off-the-shelf' s.r.o. company
Basically there are two types of 'not new' s.r.o. companies:- Previously-owed s.r.o. companies
- Ready-made / 'off-the-shelf' s.r.o. companies
Alexio.cz deals on daily basis with issues that foreigners run into, and most of them could have been avoided if only the customer would have been informed / warned.
As we provide company formation services we feel it is important to inform you before you buy, after all, owning a company is no small decision.
If you already bough an s.r.o. company and now have a problem, feel free to contact us.
Previously-owed s.r.o. companies
Old s.r.o. companies have been founded in the past, with one or more owners (jednatels), and usually are not active anymore or are in minus (Why sell it if the company makes profit?). Since the jednatels do not want to go in bankruptcy or pay their debts, they try to make somebody else the new owner / jednatel.In Czech such a person is a 'bilý kun' (a white horse) and he will be responsible for the company after the sale. Usually this is a person that doesn't have any money or doesn't even exist so it is impossible to collect the debts and the old management escapes from the whole situation without being responsible anymore.
But, instead of a fictive person, also foreigners looking for a cheap company are target for such practises.
In case a company is offered much cheaper, be aware that this can be a 'previously owned' company, including debts, missing basic capital, missing trade licenses and courtcases. Not knowing this at fist, the new owner could become a victim that now has responsibility for problems the previous management caused (!)
Ready-made / 'off-the-shelf' s.r.o. companies
Even the so-called 'off-the-shelf' s.r.o. companies are not as safe as they look.Our experience is that in more than half of the cases something is wrong with the foundation documents, the trade licenses, the registration at the taxoffice or the tax return.
There is, for example, no requirement in Prague to write the exact address in the notárský zápis (company founding documents). Off-the-shelf companies may have the full street address (or an address outside Prague), forcing you to make expensive changes when you want to move away from that address.
Another example is that the notárský zápis is not suitable more than one jednatels / shareholders, and needs to be re-written should an investor want to join the company.
A third example is that the company was formed without any trade licenses, so not only the company founding papers need to be re-written / changed, also the registration at the Trade License Register needs to take place.
If a ready-made s.r.o. company was formed in a previous year, then in most cases no tax-return has been filed for the previous years, because the company was not even registered at the 'financní úrad'. After becoming new owner, then one of the first things to do it to solve this situation with the tax office.
So, although buying an 'off-the-shelf' company is advertised as easy, quick and without problem: check, check and double-check before you buy anything else than a new s.r.o. company.
Conclusion
Our advice: Save yourself from possible trouble lateron, and found a brand-new s.r.o. companyor register a živnostenský list in case you do not have the basic capital instead of buying an old or ready-made s.r.o.
Buying a new s.r.o. company
There are many companies that will do the s.r.o. company formation for you, also we offer this serviceOn the next page you can find a checklist that -according to us- a quality service provide should confim to, see