According to the Trade Licensing Act, entrepreneurs are obliged to indicate in the Trade Licensing Register not only the address of their registered office, but also the address of each establishment where they carry out their business activities. The obligation applies to all business premises, regardless of their nature – whether it is a shop, office, workshop or other premises intended for business. Failure to comply with this obligation may lead to the imposition of penalties by the trade licensing authority.
In this article, we will focus on the legal regulations related to the registration of a business establishment in the Trade Register, including the differences between a registered office and a business establishment, the requirements for proper designation of the establishment and the manner in which registration is carried out. At the same time, we will consider the nature of the establishment as such and the ambiguities arising from the statutory regulation. In addition, we will offer the perspective of the owner of the property in which the establishment is located and consider the related legal and practical aspects that may affect him.
Registered office and business establishment
A legal person shall enter its registered office in the public register in which it is registered, in accordance with the requirement of Section 120(1) of the Civil Code. The designation of the registered office of the legal person is a necessary element of the instrument of incorporation pursuant to Section 123 of the Civil Code, in relation to Section 136 thereof. It applies that only the municipality may be indicated as the registered office in the instrument of incorporation if the legal entity is entered in the public register. The legal entity then proposes to enter the full address of the registered office in the public register, i.e. including the descriptive number, postcode, street and district, if applicable. The legal entity shall attach to the proposal for registration of such fact a document proving the title for the use of the premises in which it has placed its registered office. The title is not required if the authorisation is derived from a public list (e.g. the Land Registry).
In the case of a natural person running a business, the legal act of incorporation is of course not relevant, so only the registration of the registered office in the Trade Register is relevant. The address of the registered office shall be given by the natural person in the declaration pursuant to Section 45 of the Trade Licensing Act and shall be accompanied by a document proving the title for the use of the premises where the registered office is located, if different from the residence.
The legal dictionary states that the registered office of a legal person is the place where its administration is located and where the public can interact with the legal person.[1] We believe that the same can be said of the registered office of a natural person entered in the public register.
If it is a place of business, the legislation already offers us a specific definition. An establishment is defined in section 17(1) of the Trade Licensing Act as the premises in which a trade is carried on. It is therefore possible to imagine an entrepreneur who, with regard to the nature of his trade, has premises intended only for internal administration (offices) and at the same time an establishment where, for example, he manufactures and sells his products. However, for some trades, the administrative and business parts may merge, and it is then a question of determining which premises should be correctly designated as the business premises. More on this below.
It is worth noting that there is no limit to the number of premises of a business and a trade may be operated in more than one premises. However, you need to have a legal title to use each of them and also meet the legal conditions for their designation.
Registration of the establishment in the Trade Register
The sole trader is obliged to notify the trade licensing authority in advance of the commencement and termination of the trade in the establishment. They must also ensure that the establishment is fit to carry on a trade in accordance with specific legislation. A person responsible for the operation of the establishment must be appointed for each establishment.
On the basis of this notification, the trade licensing authority shall give the establishment an identification number and enter it in the Trade Register.
Designation of establishment
The Trade Licensing Act stipulates that an establishment must be permanently and visibly marked externally with the business name, the company name or the name and surname of the sole trader and his/her personal identification number. The registered office of the entrepreneur must be visibly marked with the same information. In accordance with this requirement, the building – usually its façade – in which the establishment is located is usually provided with a plaque bearing these particulars. In this context, the specifics of such a building must be taken into account – in particular, the facades of protected buildings cannot be marked in this way. Here, it may be appropriate to place these information boards, for example, in the reception area of the building, which is open to the public during normal daytime hours.
The case law of the highest courts has provided more detailed conditions for the designation of establishments and residences. The Supreme Administrative Court has clarified that the visible marking of an establishment is to be understood as a marking that is clear, comprehensible, visible at first glance, and avoids misinformation about the necessary data required by law.[2] The marking must be permanently placed on the outside of the establishment, and a marking that is taken down after closing time and stored in a place from which it is not visible cannot be considered to be a properly executed designation of the establishment.[3]
Furthermore, the Supreme Administrative Court rightly points out that the law imposes stricter requirements on the designation of the establishment than on the designation of the registered office, stating that the designation of the registered office must meet only the requirement of visibility.[4]
Which premises are an establishment?
The question arises, however, as to what premises an entrepreneur is obliged to declare to the trade licensing authority as his business premises. The definition of a place of business under the Trade Licensing Act is very strict and, above all, it does not impose any requirement for the long-term or regularity of the business or the contact with the public in that place.[5] This may ultimately mean that in order to comply with the requirement under Section 17(3) of the Trade Licensing Act, the entrepreneur would have to declare in advance every place where he will operate his business, even if only once. As already mentioned above, for many trades the separation of individual activities may be relatively straightforward, but for others such an easy distinction is not an option. Perhaps the most fundamental question mark hangs over shared workplaces (co-working), which are used by many smaller entrepreneurs or start-ups, not only for internal administration and management purposes, but often also for client meetings, concluding business contracts and a number of other activities that clearly meet the definition of a trade.
In this case, are entrepreneurs obliged to register such a place as their place of business and meet other conditions that the law imposes on the designation of a place of business, even in the case of irregular or even one-off use of the premises in question?
We believe that the legislator did not intend such excessive formalism, and that the statutory regulation merely lacks a more specific corrective to the definition of an establishment, such as, for example, recurrent or otherwise regular or long-term use of the premises. It was certainly not the intention of the legislator to penalize traders, lawyers, financial advisers or other businessmen for concluding business contracts, for example, in a café or consultations and business meetings held in co-working premises, unannounced and unmarked in accordance with the statutory regulation. We cannot quite imagine how such a breach would ever be identified and proven by the trade licensing authority. On the other hand, however, we have practical experience with cases where selected trade authorities frequently inspect such premises in order to detect deficiencies in the fulfilment of the statutory obligations in question.
If the nature of the activity carried out in the premises in question is repeated or regular, it can be assumed that such premises could be regarded as an establishment with all the consequences and obligations arising therefrom. However, it should be noted that many co-working spaces in particular do not perceive this positively and explicitly reject any labelling of the premises, even in contracts. We therefore recommend that you regulate this issue directly in the contract under which you are using the premises, as it is you (the entrepreneur) who could potentially be in breach of legal obligations.
Conclusion
The issue of the designation of the establishment is not sufficiently addressed in the legal regulation and certainly lacks some corrective measures that would shed more light on this topic. However, if you operate your business in certain premises (be it public premises, co-working offices, etc.) and this is not an isolated case, it can be assumed that it is your duty as an entrepreneur to mark such premises as your business establishment in accordance with the law.
Please do not hesitate to contact us if you have any questions regarding business premises and business in general.
[1] PLÍVA, Stanislav. The registered office of a legal entity. In: HENDRYCH, Dušan et al. 3rd edition. Prague: C. H. Beck, 2009.
[2] Cf. judgment of the Supreme Administrative Court of 9 September 2010, No.1 As 74/2010-59
[3] Cf. judgment of the Supreme Administrative Court of 15 May 2023, No. 4 As 17/2023-34
[4] Ibid.
[5] However, in its judgment of 15 May 2023, No. 4 As 17/2023-34, the Supreme Administrative Court states that an establishment is conceptually intended to be visited by the public.
Mgr. Ondřej Růžička, attorney – ruzicka@plegal.cz
Mgr. Nikola Tomíčková, junior lawyer – tomickova@plegal.cz
24. 4. 2025