Directors are appointed by the general meeting of the shareholders. There are no rules relating to the duration of appointment nor rotation of directors. They may be appointed for a duration of time as decided by the shareholders and may be reappointed once this expires.
Under Czech law, an s.r.o. requires at least 1 director, unless the Articles of Association of the company specify a higher number of managing directors. There is no maximum number of directors that may be appointed to an s.r.o.
A natural person or legal entity can be appointed as a director. However, if a legal entity is appointed then a real person representative should be appointed, if one is not appointed a member of the legal entity’s statutory body may represent.
Generally there are no nationality, residence, education and professional requirements. However, this can vary where the director:
Please note, where any directors permanently resides in the Czech Republic, they are required to meet some additional duties. The duties vary substantially depending on a country of citizenship, eg simple notification duties for EU citizens or an administratively burdensome permanent residence permit for certain non- EU citizens.
The following conditions may restrict an individual from acting as a director:
To pass a board resolution, a simple majority is required, ie the affirmative vote of two (2) out of the three (3) directors.
General non-compete clause
Directors may not (without the approval of all shareholders):
If a director becomes aware of a conflict between their interests and the interests of the company, they must inform the other directors and the general meeting. The same applies where a conflict of interest could occur between a person close to the director, persons influenced by the director or persons controlled by the director. The general meeting is authorised to suspend the director if it considers this an appropriate course of action.
Furthermore, the director must inform the other directors and the general meeting in cases where the director:
The same applies where an agreement is intended between persons close to the director, persons influenced by the director or controlled by the director. In such situations, the general meeting is authorised to forbid the conclusion of the agreement.
If the director fails to inform the other directors and the general meeting, the agreement in question is valid and binding to the company until it is claimed invalid by an authorised party (if any).