The new Civil Code introduced great uncertainty into the possibility of controlling companies owned by one spouse by the other. The core of the dispute lies in the fact that some lawyers claim that newly married partners can, for example, come to the general meeting and vote for the other or exercise any other rights and obligations of a partner. The others claim that nothing changes.

Illustration collage, Photo: hns

The situation affects thousands of companies across the country. The Ministry of Justice also admits the vagueness of the interpretation and is preparing a change. But until the court decides on such a dispute for the first time or the amendment to the Civil Code comes into effect, there will never be certainty.

A draw after the first half

What is it about? If you have a company and you do not have a prenuptial agreement that would regulate the property relationship to the company in any way, half of the value automatically belongs to your wife or husband. But until now it was only the value of the company's share. Due to unclear wording in the new Civil Code, lawyers are now arguing whether a husband or wife can also exercise the rights and obligations of a partner, in other words, control the company. So is my husband or wife my companion in all things or not? "The dispute is really being fought between lawyers, and in sports terminology, it's a fluke so far. But those who claim that this is really a problem have more of a game. Everyone is actually waiting to see if the mentioned passage will be amended and the situation will be clarified or if a dispute in this matter will appear in court and the jurisprudence will decide," says the specialist in company law JUDr. Ing. Jan Vych from Vych & Partners.

To whom the word falls…

The disputed situation concerns all commercial companies and housing cooperatives established after 1.1. 2014. And in principle it concerns each individual right and obligation of the partner. In practice, this means, for example, voting at general meetings, viewing the company's documentation, and of course dealing with a share in the company, whether it is a sale or a pledge. The situation also applies to the handling of securities, because even a share, for example, is a share in a joint-stock company. Taken ad absurdum, this means that the entrepreneur founded a company after marriage, the partnership falls apart and the other wants to either secure himself or just take revenge. Based on the legal interpretation that he also has the right to deal with the company like any other partner, he will block voting rights and the company will not be able to take any decisions, including, for example, approving the financial statements. In the most catastrophic scenario, based on such blocking and non-fulfilment of the company's obligations, the commercial court can decide to cancel it. "The scenario described in this way is really stretched to the stage of ad absurdum, and even more so on a theoretical level. However, the mere fact that something like this is at risk creates a high degree of legal uncertainty. In this regard, I see the Civil Code as somewhat unsuccessful, and the explanatory report on the relevant passage of the Civil Code does not really help us in this ambiguity, because it is silent," comments lawyer Jan Vych on the uncertainty.

What with this

The Ministry of Justice has admitted in the past that this is a problem. Ministry of Justice spokeswoman Kateřina Hrochova confirms that the interpretation seems to be unclear and "capable of interfering in an undesirable way with the legal certainty of persons" not only for the ministry, but also for leading figures in Czech jurisprudence. That is why the ministry decided to solve this interpretation problem with an amendment. It intends to return to the established practice before 1/1/2014, and the amendment therefore envisages supplementing the existing text with the wording that "the acquisition of a share does not establish the participation of the second spouse in this company or cooperative, with the exception of housing cooperatives". As before, the exercise of the partner's rights and obligations will belong only to the spouse who acquired the rights and to no one else. "Better than waiting for the theory to agree is to proceed with a clear and predictable change in the law. The adoption of the amendment depends on the length of the legislative process, so a specific date cannot be anticipated," adds Kateřina Hrochová, spokesperson for the ministry. Company law expert Jan Vych advises with a slight smile on his face: "If you do not want to conclude a prenuptial agreement, but at the same time want to be absolutely sure, postpone marriage or starting a company until someone else's dispute is settled or the Ministry of Justice comes up with a solution. about the interpretation and meaning of which lawyers will not argue."