Corporate disputes

Corporate law is a very broad term and disputes related to it can arise in a variety of situations. As a rule, however, corporate disputes involve disagreements between people who jointly founded a company - and whose views later diverged. Such a situation is unpleasant, since the partners then have to concentrate on each other's legal battles instead of doing business.

In order to continue to devote your time to business, it is often better to leave these unpleasant (and often legally complicated) matters to a lawyer. And what is most often dealt with in such a case?

One of the frequent cases is assessment of the validity of the general meeting. At the general meeting, the shareholders decide on the most important matters of the company. Individual decisions are voted on. And the overrated companion is not always satisfied with the result. In such a case, companion must immediately submit the so-called protest and follow it up with a lawsuit. Everything must be filed within the time limit and carefully reasoned. Preferably with reference to the decision of the Supreme Court, whose decisions guide the lower courts.

Another commonly addressed issue is the so-called Right to information. In fact, the shareholder has the right to request information about the company at the general meeting and outside the meeting, to consult its documents of the company and to check the data contained in the documents submitted. This means, for example,requesting to inspect all contracts for the last period by which the companyhas sold or bought its properties, or contracts that related to a particular value. This is a powerful means for each of the partners to have an adequate overview of the company, even if they do not participate in its daily activities and decision-making. Sometimes a request for information is used as a means of protecting the rights of a shareholder, other times a request for information is abused as a tool of pressure against the company or another (usually majority) shareholder. If the company does not comply with the request, the court again decides. And even here, too, there are a number of decisions where the Supreme Court has considered which information should be released and which should not. This is a good line to know — or at least to estimate, as it is not always completely clear.

In the event that information reaches a shareholder (either by the described request or in another way), it is necessary to assess it - whether everything that has happened or is happening in the company is in accordance with the law. That is, to execute a legal audit. Such an activity is especially important if one of the shareholders suspects that the other shareholder or another person has harmed the company. A typical situation in which this occurs is when the former management of the company leaves (or is dismissed) and the new management finds out in what condition the company was handed over to them.

The investigation described above often results in conclusions that the former management committed illegal acts that caused damage to the company - for which the relevant persons are then liable. This may include the unfavorable sale or purchase of assets, excessive compensation, suspicious transactions without economic sense, and many other variations of asset stripping. Has damage been caused? In what amount? Who exactly is responsible for it? Isn't everything already time-barred? Would it be better to file a lawsuit, or a straight criminal notice? Or pehrhaps both at the same time? All of this (and more) needs to be considered before taking concrete action.

Compensation can also be sought from other persons. Typically, these are members of the supervisory board, if one has been established by the company. This is because the damage may not only be caused by the person who acts for the company (forexample, in the case of an LLC, the managing director), but also by the personwho is supposed to supervise the company. Even neglect of such supervision mayresult in liability for damages.

Membership in the body of a company (and generally any legal entity - including, for example, associations and other non-business legal entities) generally entails a number of obligations. If someone is elected, appointed or otherwise called to such a body, he or she must perform that function with the necessary loyalty as well as with the necessary knowledge and care. It is for each person to assess whether he or she is capable of exercising such care as a good steward once he or she has taken office. If he is not capable of such care, he risks liability for damage caused by his 'inadequacy'.

This is especially true in the case of commercial corporations, typically in a limited liability company. Here, according to the law, one who was in making a business decision in good faith, could reasonably be expected to act with due care and knowledge and in the defensible interests of the corporation. There are, of course, exceptions to this rule as well, and provisions that supplement it.

Damages are far from the only sanction a member of the authority may face. In the event that a member of the statutory body of a business corporation (i.e., for example, an executive) repeatedly or seriously violates his duties, the court may disqualify the member from serving as a member of the statutory body of any corporation for up to three years. In the case of exercising the function of a member of a statutory body despite the established prohibition, such a person is threatened with expulsion from office for up to 10 years. To virtually eliminate him from the business. Quite separate (and very extensive) is the “chapter” of responsibility within criminal law. The Criminal Code knows many crimes that a member of the body can commit. And often very easily.

Even a partner, i.e. the "owner" or "co-owner" of the company, may not be safe. If, by means of its influence in that society, it exerts a decisive influence on its conduct to its detriment, it must compensate for that injury. Again, with exceptions. At the same time, the shareholder is at risk of exclusion from the company due to violation of his obligations. In some cases, he can leave the company unilaterally.

Whatever the dispute is, and however the dispute is related to the operation of a business corporation, the strategy needs to be very well thought out. Disagreements of companions can easily turn into a multitude of intertwined disputes from which only a long and very difficult road can lead. It is therefore necessary to assess one's position and the likely developments at any given moment. That is, to know whether it is better to act or to take offensive action, or to combine the two. That is what a lawyer can best help with.

časté otázky

Co je dobré vědět o této oblasti?

What is an illegal decision of the authority?

The right to compensation for damage caused by an unlawful decision has the parties (including omissions) in which a decision was issued, as a result of which they suffered property or non-property damage. However, it is not enough just to disagree with the decision or to seek its annulment or to declare it incorrect at the next instance. Compensation can only be claimed if the decision has been annulled or changed for illegality after it has become legal (or if the decision is non-final but enforceable).

What is maladministration?

The definition of “maladministration” is quite broad, but in general it can be described as a violation of binding rules prescribed by legal norms for the conduct of a public authority in its activities, to which it is obliged and authorized on the basis of generally binding legislation. However, in the case of maladministration, this is not an illegal decision, but the procedure of the authority, which was subsequently reflected in its decision. It is often an unreasonable length of proceedings, where, although the decision given is legal in itself, the time until it is issued is contrary to procedural rules or reasonableness and the parties are therefore entitled to compensation for delays in the proceedings.

It is important not to miss the deadline for filing a lawsuit

Any claim or right must be exercised in a timely manner, that is, before the expiration of the limitation period and sometimes even a significantly shorter limitation period. While ordinary civil claims (for performance or damages) usually expire after 3 years, in a number of cases (administrative actions, actions for annulment in employment, rental or corporate matters) these are units of months! In any case, the sooner you seek out a professional, the more chances there will be to exercise the right properly and in a timely manner.

Do I need to be represented by a lawyer in the proceedings?

In general, it is not necessary to be represented by a lawyer in the proceedings before the court. Exceptions are appeal proceedings, cassation complaints, proceedings before the Constitutional Court and cases of so-called necessary defence in criminal cases. However, we recommend representation by a lawyer in the remaining proceedings, especially since the lawyer will recommend the client the most appropriate course of action to protect the client's rights.

What to do if I received an (electronic) payment order?

A duly served payment order becomes legal if you do not file an objection to the payment order within 15 days from the date of delivery, in the court that issued the payment order. In opposition, you express your disagreement with the imposed obligation and the court will therefore cancel the payment order. Subsequently, you will have a period of 30 days, in which you must indicate for what reason you do not agree with the filed lawsuit. If you did not complete such a justification, the court could rule by judgment of recognition.

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JUDr. Vít Kučera, MBA
Vít has extensive experience in representing clients before domestic and foreign courts, especially in commercial disputes. He specializes in preliminary measures, which he also deals with in his publishing activities. Since 2013 he also serves as an arbitrator of the Football Association of the Czech Republic.
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Mgr. Martin Tůma, Ph.D.
Martin mainly deals with commercial cases, including disputes arising from unfair competition, damages or insurance claims. He likes to look for simple solutions to (seemingly) complex problems. He also deals with construction law, in connection with which he represents clients in negotiations with administrative authorities and before the courts.
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JUDr. Lukáš Šikel
Lukáš is a lawyer specializing in litigation, both in court and in arbitration proceedings. He has represented clients in simple disputes, debt collection, as well as in complex cases, such as those in construction law. He also has experience representing clients in enforcement proceedings and insolvency cases.
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JUDr. Aleš Linhart, Ph.D.
Aleš specializes in disputes in the areas of real estate, liability for defects in construction, particularly in transportation infrastructure, the automotive industry, damage compensation and insurance, as well as pre-contractual liability. He represents clients in international arbitrations, including investment arbitrations. You can also appoint him as an arbitrator, as he is listed in the register of arbitrators of the Arbitration Court at the Chamber of Commerce and the Agrarian Chamber of the Czech Republic.
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Mgr. Kateřina Obertová
Kateřina has been involved in legal disputes since the beginning of her long-standing legal practice, during which she has dealt primarily with disputes arising from civil and commercial contracts, as well as cases related to family law and real estate ownership. In her legal practice, she places great importance on clarity and empathy, striving to offer clients functional and practical solutions.
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JUDr. Ing. Vít Švestka
Vít is a lawyer specializing in solving problems in the field of tax law before the tax authorities and the courts. He also acts as a tax advisor and thus can provide additional valuable advice and experience on how to reduce the risk of initiating proceedings at all. Vít also deals with corporate disputes. In addition to his legal education, he also holds a degree from the University of Economics in Prague, where he also participates in teaching and publishing activities.
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Mgr. Marie Timoščuková
Marie is an expert in labor law. She has extensive experience representing clients in employment disputes, from both sides of the "barricade" — that is, on behalf of both employers and employees. She has successfully defended the validity of many dismissals and has also helped employees recover numerous unlawfully withheld wages.
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Mgr. Vojtěch Adámek
Vojtěch is an experienced lawyer specializing mainly in disputes over claims arising from contracts, including settlement of parties after termination of contracts, debt collection and disputes over compensation for damage (damages). He considers understanding the client's needs and finding effective and pragmatic solutions together, including extrajudicial termination of disputes, as the key to success.
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