Ready-made s.r.o. vs starting a company from scratch

Not every founder wants to, or can, wait for a company to go through the whole formation process. It is precisely for such cases that ready-made companies exist — pre-founded companies ready for immediate takeover. So the question is not only how to set a company up, but whether to set one up at all, or buy one ready-made.

Both routes lead to the same goal, but differ in cost, speed and what stands behind the company. Let's go through them.

What a ready-made s.r.o. is

A ready-made s.r.o. is a company founded in advance solely for the purpose of sale. It is already registered in the commercial register, has an assigned IČO and paid-up share capital, but has never carried on any activity — it is what is called dormant. The buyer thus takes over a fully functional company with no business history and can start invoicing with it practically immediately after the transfer.

Precisely because the company has so far existed only formally, its transfer is relatively quick — the shareholder and usually the managing director, the business name and the seat change, but the legal person itself came into existence earlier and is registered.

When a ready-made company is worth it

A ready-made company makes sense when you need a company immediately — typically because of an order, participation in a tender or a business opportunity that will not wait. For the speed and the certainty of immediate availability you pay a premium over setting up from scratch, but you get the company at once, without waiting for the individual steps of formation. An advantage is also that a dormant company has no obligations and no past.

When to set up from scratch

Setting up from scratch is cheaper and, thanks to direct registration by a notary, also a matter of a few days today, not weeks. The main advantage is that you set the company up exactly to your own liking from the start — the business name, seat, scope of business and the memorandum of association. The gap in speed is also narrowing — whereas formation used to take weeks, today it is a matter of days with a notary, so the main advantage of a ready-made company, immediate availability, carries less weight than in the past. If you are not in extreme haste, setting up from scratch tends to be the sensible and more economical choice. The procedure is covered in the article how to set up an s.r.o. in Czechia.

What to watch out for with a ready-made company

Even with a dormant company it pays to verify its history — whether it really carried on no activity and has no obligations, which a reputable provider documents with a declaration and accounting. Count also on the fact that after the purchase you will usually change the business name, seat and managing director to suit your needs, and these changes require a notarial deed and registration in the register. The advantage of immediate availability is thus partly offset by additional steps and costs.

Conclusion

A ready-made s.r.o. wins where speed decides, setting up from scratch where cost and the exact configuration of the company matter. Thanks to direct registration by a notary the difference in speed is smaller than it used to be, so for most founders setting up from scratch is fully sufficient. Whether a trade licence or an s.r.o. suits you better is covered in the article sole trader or limited company.

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