Having the registered office in your own home is a risk

Having the registered office in your own home is a risk

• Your address will be freely available in all registers free of charge and to anyone
• You will undergo inspections by the authorities at your home
• In the event of a distraint, there may be a significant problem with distinguishing between corporate and personal assets
• If you don’t live at a prestigious address, the office won’t look presentable either
• You must obtain the consent of the property owner (if it is not yours)
• You have to mark the company on the building (in practice, the owner, the authority or the neighbour does not have to agree to this)
• You have to receive mail and be a contact person

Who is a virtual registered office suitable for?

In principle, especially for those entrepreneurs who provide services, usually work from home, on the road, in a coworking space or are often in the field and with their clients. Many entrepreneurs don’t really need a physical office at all. It would be of no use to them, and they would waste money on rental, which would be contrary to the principles of due managerial care. Also, the argument that such an entrepreneur is out of touch would be meaningless. Mail and landline are handled by the registered office provider, and the company is supposed to be contacted primarily via a data box, namely by law.

A virtual office is perfectly legal. We quote from the judgment of the Municipal Court in Prague file No. 9 Af 21/2017, which, among other things, also touches on the court’s view of the registered office virtuality: “Furthermore, it is necessary to agree with the plaintiff that the ‘virtual registered office’ is a legal institute. With effect from 20 July 2009, the provision of Section 19c of the then valid Act No. 40/1964 Coll. (the so-called Old Civil Code) was amended by Act No. 215/2009 Coll. (now Sections 136 and 137 of Act No. 89/2012 Coll., the Civil Code), which, as a result of EU legislation, eased the requirements for the registered office of business entities."

Consequently, if doubts arise as to the actual exercise of the economic activity of a corporation which does not have its own establishment or premises of its own economic activity or storage facilities, the tax authorities cannot regard that fact as unlawful in itself or assume it as such.

Registered office and establishment are not the same thing

An establishment is a special and separately notified business premises in which a trade is carried out, i.e., where a certain business activity is directly carried out. The establishment must be identified by a person’s identification number (if assigned), a business name if it is a shop, operating hours and the person responsible for the operation must also be indicated. Unlike a registered office, the number of establishments of an entrepreneur is not limited.

There is only one registered office of a legal entity, it is determined when the legal entity is established, and the full address of the registered office is entered in the public register. The registered office must be identified by a person’s identification number (if assigned) and a business name.