Memorandum of association of a Czech s.r.o. — what it must contain

The memorandum of association is the founding document of an s.r.o. (a Czech limited liability company) — it decides who the members are, what share each holds and who represents the company to the outside world. It is not a form to file away in a drawer: Czech law sets out precisely what it must contain, and without certain details neither the notary nor the court will enter the company in the commercial register. Whatever you agree in it also applies throughout the company's life until you amend it — and every later change again requires a notary.

The rules are in Act No. 90/2012 Coll., on business corporations (the ZOK). Section 146 lists the mandatory details, and Section 8 requires the document to take the form of a public deed, that is, a notarial record. When a single founder sets up the company, it is not called a memorandum of association but a deed of foundation; the content, however, is essentially the same. This overview shows what the document must contain and what is worth adding beyond the law.

Why it must be done before a notary

The memorandum of association of an s.r.o. cannot be drawn up at the kitchen table. Section 8 of the ZOK requires the form of a public deed, which in practice means a notarial record — the notary checks the content, verifies the founders' identity and draws up the document. The notary can enter the company directly in the commercial register, so registration is usually done within hours rather than after weeks of waiting for the court.

The fees are friendlier than people expect. For a "simple" s.r.o. with a model memorandum of association and monetary contributions only, direct registration by the notary is exempt from the court fee; in other cases registration by the notary costs CZK 2,700. The notary's fee for the registration itself is added to that — we covered the whole procedure and its costs in our article on how to set up an s.r.o. — procedure, costs and timelines.

Mandatory details under Section 146

Section 146(1) lists precisely what the memorandum of association must contain in order to stand up at all:

• the business name, that is, the company's name;
• the object of business or activity;
• identification of the members by name and residence or seat;
• identification of the types of shares of each member and the rights and duties attached to them, if different types of shares are permitted;
• the amount of the contribution or contributions attributable to a share;
• the amount of the share capital;
• the number of directors and the manner in which they act on behalf of the company.

The last point deserves a pause. Whether the directors act individually or only jointly is no small matter — it decides who binds the company and how when signing contracts or dealing with a bank. With several members, precise identification of the shares is in turn crucial, because the vote at the general meeting and the share in profit both follow from it.

What is added at formation

At the company's formation the memorandum must, under Section 146(2), additionally contain a few details that set the formation in motion: the founders' contribution obligation, including the deadline for fulfilling it, identification of the person the founders appoint as director (and, where relevant, members of other bodies), and identification of the deposit administrator — the person who receives and manages the contributions before the company comes into existence.

If a member contributes an asset rather than money (a non-monetary contribution), the memorandum must contain its description, valuation, the amount credited towards the contribution, and the name of the expert who set the value. These "start-up" details lose their significance once the company exists and are usually removed when the document is later amended.

Contribution, share capital and the deposit administrator

Czech law is generous to founders: the minimum contribution is CZK 1 (Section 142 of the ZOK), so the share capital of a single-member s.r.o. can in theory be a single koruna. A symbolic capital, however, does not look credible to banks or business partners, which is why many founders choose a higher, "representative" amount. What this means in practice and which contributions pay off is something we discuss in our article on the share capital of a Czech s.r.o. from one koruna.

For smaller amounts, paying up is simple too. If the total of the monetary contributions does not exceed CZK 20,000, there is no need to open a special bank account for it — the contribution can be paid up with the deposit administrator (often the notary) in another way. For example: two members each contributing CZK 5,000 can get the company going without a trip to the bank, with the deposit administrator confirming payment.

What is worth adding beyond the law

The mandatory details are only the skeleton. The memorandum of association is also the best place to settle in advance the situations that would otherwise set the company at odds later. It is worth regulating in particular the transfer of a share (whether the general meeting's consent is needed when a member wants to sell their share outside the company), the rules for decision-making at the general meeting and the required majorities, the method of distributing profit, and, where relevant, a member's withdrawal or exclusion.

In a single-member company these provisions seem unnecessary, but as soon as a second member or an investor joins, a well-drafted document saves lengthy negotiation. A simple rule applies: the more members, the more it pays to have the rules of the game on paper from the start.

Conclusion

The memorandum of association is not a formality but your company's constitution — it sets out who decides, who is liable and how profit is shared. The mandatory core under Section 146 must be right, or the company will not come into existence; everything else is a chance to agree in advance, while relations are good. Order in your founding documents is as natural as a credible address in a carefully run house for just thirty companies.

Frequently asked questions

Must the memorandum of association of an s.r.o. take the form of a notarial record?

Yes. Under Section 8 of the Business Corporations Act, an s.r.o. is founded by a memorandum of association in the form of a public deed, which in practice means a notarial record. The notary checks the content and can enter the company directly in the commercial register. The same form is required for every later amendment to the memorandum.

What is the minimum contribution and share capital of an s.r.o.?

The minimum contribution is CZK 1 under Section 142 of the ZOK, so the share capital of a single-member s.r.o. can in theory be a single koruna. If the total of the monetary contributions does not exceed CZK 20,000, there is no need to open a special bank account for it. In practice many founders choose a higher, more credible-looking capital.

What if a single person sets up the company?

When an s.r.o. is set up by a single founder, it is not called a memorandum of association but a deed of foundation. The content is essentially the same — it must meet the mandatory details under Section 146 and take the form of a notarial record. The main difference is that provisions on the relations between several members fall away here.