Doing Business through a Sole-Proprietorship

Doing Business through a Sole-Proprietorship

News Blog

One of the common routes to doing business in the Czech Republic is though a sole proprietorship, often called a trade license. A sole proprietor (osoba samostatně výdělečně činná, or OSVČ) is a physical person who has income from carrying out a business and/or self-employment (a freelancer or entrepreneur). A sole proprietor may be registered with the Commercial Court (Obchodní soud), or the trade license regulator (živnostenský úřad). The sole proprietor is liable without limitation, and trades on his-her own full name – to which s/he might attach some differentiating trade name. S/he must be 18 years of age, have a clean criminal record. The annual accounting records of the company may be kept using either simple or accrual accounting. Sole proprietors do not need to file accounts with the commercial court’s document repository (sbírka listin), nor register for a databox (datová schránka) for e-communication with the government unless they choose to do so.

A sole proprietor might also be regulated under a special law, e.g. notary, tax advisor, journalist, farmer, etc. Or s/he might have income from shares of participation as a partner in a limited partnership (komanditní společnosti). We will focus here primarily on tradespersons registered with the trade license regulator, however.

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