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Newsletter 1 / 2005
Adjustment of statutory default opinion, a summons to the pledgees to notify the ADDRESS:
interest rates company that a pledge to the participant securities Vodičkova 37
exists and a statement by the board as to whether it
On April 28, 2005, an amendment to the government considers the amount of consideration offered by the Palác Langhans
decree No. 142/1994 Coll. has come into force which main shareholder to be fair. 110 00 Praha 1
stipulates the amount of default interest and fees
The board without undue delay after adopting the Tel: +420 222 929 301
under the Civil Code (the amendment was published
general meeting’s resolution shall file a motion to
in the Collection of Laws under No. 163/2005 Coll.). Fax: +420 222 929 341
register the resolution in the commercial registry. At
Previously, the amount of default interest under said the same time the board shall publicize the resolu- e-mail:info@bnt.cz
decree was two times the [Czech National Bank’s] tion of the general meeting and the conclusions of www.bnt.cz
ČNB discount rate as at the first day of default. Given the expert opinion by the method designated for
the fact that the current ČNB discount rate is 0.75 % calling a general meeting. The right of the main Identification Number:
p.a. (i.e., the relevant twofold interest rate would be shareholder can be exercised within a time limit of 271 17 723
1.5 % p.a.), the level of the statutory default interest three months from the expiration of the time period Registered in the Commercial
failed to provide appropriate protection for creditors, in which the unconditional and unrestricted offer is Register maintained by the
or to motivate debtors to timely redeem their liabili- taken over, or three months after acquiring 90% of Municipal Court in Prague
ties. At the same time, this state of affairs was at the shares in the company, otherwise this right shall
odds with the requirements of the acquis, in particu- A 49309
terminate. This right can also be exercised during
lar the EU Directive No. 2000/35, on combating late the time limit of three months after the amendment
payments in commercial transactions. is published in the Collection of Laws (from its PARTNERS IN PRAGUE:
The new amount of default interest under the above- effective date), provided that the person is in the po- David Falada
mentioned amended government decree equals the sition of the main shareholder as of the amendment’s Lawyer
repo rate of the Czech National Bank increased by effective date.
seven percentage points (per annum rate). In each Zdenka Noack
After a short time of this amendment’s existence,
half of a given calendar year during which the deb- the Czech Parliament adopted a change to it (not
Lawyer
tor continues to be in default, the applicable amount yet signed by the president), under which a main Pavel Pravda
of default interest depends on the repo rate as at shareholder will be obliged to state in writing to the Lawyer
the first day of that half of the calendar year. This Securities Commission his intent to buy out the other
new framework applies to the calculation of default participant securities. The adoption of the general Markéta Pravdová
interest for those cases in which timely payment of meeting’s resolution to transfer the securities will Lawyer
the financial liability was defaulted, for the first time, be conditioned by the Commission’s prior consent,
after April 28, 2005. In the second half of 2005, the which may not be older than 3 months. The absence
amount of default interest will depend on that ČNB of the consent of the Securities Commission renders OUR AFFILIATES:
repo rate which is valid as at July 1, 2005. One may the general meeting’s resolution invalid. The Securi- Bratislava
expect certain issues with the thus newly defined de- ties Commission at the same time assesses whether
fault interest, especially as regards the calculation of
Budapest
the amount of consideration is an adequate value of
its actual amount for collection purposes. Moscow
the securities and if it reaches a contrary conclusi-
Tomáš Běhounek, tomas.behounek@bnt.cz on then it has the right to charge the shareholders Nuremberg
to change the proposed price within the stipulated Rīga
time limit. The Commission has 15 days to provide
Amendment to the Commercial Code Vilnius
its standpoint and if it does not provide one within
– squeeze out – this time limit it shall be assumed that it consents Warsaw
On June 3, 2005, an amendment to the commercial to the buyout of other participant securities at the
code was announced in the Collection of Laws that proposed price. COOPERATING OFFICES:
adds provisions to the commercial code relating The main shareholder will at the same time be ob- Belgrade
to the right to purchase participant securities (e.g. liged to deposit funds to a securities trader or to a
shares) by a so-called main shareholder (§§ 183i bank prior to the general meeting in the amount re- Bucharest
– 183n). A main shareholder is entitled to request quired to pay out the consideration. Payment of the Kyiv
that the board of directors call a general meeting consideration will then be made by the securities Lviv
to decide on the transfer of all other participant trader or by the bank.
securities (i.e. shares and provisional certificates) to Ljubljana
Pavel Pravda, pavel.pravda@bnt.cz
himself. The invitation to the general meeting, or the Sophia
announcement that it will take place, must also con- Tallinn
tain information crucial for determining the amount
of consideration and the conclusions of the expert Zagreb
Please note that this document and information contained herein as a guide only, and the applicability of its contents to specific situations will depend on the particular cir-
cumstances involved. Accordingly, we recommend that readers seek appropriate professional advice regarding any particular problems that they may encounter. Bnt pravda
& partner accepts no responsibility for any errors it may contain, whether caused by negligence or otherwise, or for any losses, however caused, sustained by any person.
Newsletter 1 / 2005
Amendment of the act on the lease requirement for lease agreements is e.g. the speci-
and sub-lease of commercial space fication of the line of business that will be operated
on the premises, if the lease is for business purposes.
On August 19, 2005, the Chamber of Deputies The lease agreement must also stipulate the amount
passed an amendment of act. No. 116/1990 Coll., of rent and the amount of payment for services
on the lease and sub-lease of commercial space. The related to the usage of the commercial space, or,
amendment now only requires the president’s sig- failing that, at least the method by which these are
nature to come into effect. According to the reasons ADDRESS:
calculated. Until now, it was not sufficient to merely
chapter of the amendment bill, its main objective give the method by which the rent is calculated, but
Vodičkova 37
was to liberalize the relationship between lessor and the rent had to be agreed directly in the agreement, Palác Langhans
lessee, in the light of a market in which the offer whereas on the other hand, the amount of payment 110 00 Praha 1
of available commercial space begins to exceed de- for related services (or, as the case may be, a method
mand so that a special protection of lessees is no for its calculation) were not mandatory prerequisites Tel: +420 222 929 301
longer warranted. Accordingly, the main principles of of a lease agreement. Fax: +420 222 929 341
the amendment bill are an expansion of the freedom
Provisions on the due date and terms of payment for e-mail:info@bnt.cz
of contract, especially in the area of reasons for can-
the rent are no longer material prerequisites of lea- www.bnt.cz
cellation, a more precise definition of a number of
se agreements: unless otherwise agreed in the lease
terms, the discontinuation of preferential treatment
agreement, rent and payments for related services Identification Number:
of certain entities e.g. upon a change of the lessor,
and a framework for the termination of existing
are payable monthly, as of the first of the respective 271 17 723
calendar month. Registered in the Commercial
lease relationships.
Under current law, lease agreements for commercial Register maintained by the
Compared to current law, the term “commercial
space that are concluded for a limited time period Municipal Court in Prague
space” is now defined more extensively. Under
can be canceled only for the reasons listed in Sec. 9 A 49309
the amendment, parts of a building that are acce-
of the act on the lease and sub-lease of commercial
ssible to the general public, for instance, also qua-
space. This list is considered conclusive. The amend-
lify as commercial space. However, the accessories
ment allows the contractual parties to agree in their PARTNERS IN PRAGUE:
of apartments, laundry and drying rooms, “pram
lease agreement on reasons for cancellation that de- David Falada
parks” (rooms for the storage of baby carriages and
viate from Sec. 9. If they choose not to do so, then a Lawyer
strollers), or attics continue to be outside the defini-
lease agreement on commercial space that is conclu-
tion of commercial space. Zdenka Noack
ded for a limited time period can be canceled only
The amendment also modifies the defining, so-called for the reasons listed in Sec. 9 of the act on the lease Lawyer
“material” contents of lease agreements, the comi- and sub-lease of commercial space.
ssion or non-determined nature of which renders the Pavel Pravda
Monika Nováková, monika.novakova@bnt.cz Lawyer
lease agreement null and void. A new mandatory
Markéta Pravdová
Lawyer
OUR AFFILIATES:
Bratislava
Budapest
Moscow
Nuremberg
Rīga
Vilnius
Warsaw
COOPERATING OFFICES:
Belgrade
Bucharest
Kyiv
Lviv
Ljubljana
Sophia
Tallinn
Zagreb
Please note that this document and information contained herein as a guide only, and the applicability of its contents to specific situations will depend on the particular cir-
cumstances involved. Accordingly, we recommend that readers seek appropriate professional advice regarding any particular problems that they may encounter. Bnt pravda
& partner accepts no responsibility for any errors it may contain, whether caused by negligence or otherwise, or for any losses, however caused, sustained by any person.
