Notifying a Trade Step by Step (Section 45-49)

A notifiable trade has one great advantage: you do not wait for a permit, it is enough to notify your business activity. Even so, it is good to know exactly what the notification must contain, how the Unified Registration Form works and when your licence actually comes into existence. This commentary will guide you through the provisions of Sections 45 to 49 of the Trade Licensing Act (Act No. 455/1991 Coll.).

What the law says

The starting point is Section 45(1), under which a person "who intends to operate a notifiable trade is obliged to notify it to the Trade Licensing Office". No administrative proceedings on a permit are therefore conducted.

The requirements of the notification are defined by Section 45(2) (for natural persons) and Section 45(3) (for legal persons). A natural person states, among other things, the first name and surname, or business name, residential address, birth registration number (if assigned) or date of birth, registered office address, the object of business and the establishments in which they will commence activity immediately after the licence arises. Under Section 45(4) you must define the object of business "with sufficient definiteness and clarity" and, for craft and regulated trades, in accordance with Annexes No. 1 and 2, and for an unqualified (free) trade according to the fields in Annex No. 4.

Under Section 45a(2), the notification is submitted "on a form issued by the Ministry of Industry and Trade" - this is the so-called Unified Registration Form (URF). On it you may, under Section 45a(1), at the same time notify the commencement of self-employment, submit an application for pension and sickness insurance, a notification to the health insurance company and registration for income tax. The Trade Licensing Office then, under Section 45a(5), forwards these data to the relevant authorities within 5 working days.

Under Section 46, documents are attached to the notification: for foreign nationals proof of a clean criminal record, proof of professional qualification (if the law requires it), a document on the legal grounds for using the premises of the registered office (a written consent of the owner suffices), a declaration of the responsible representative and proof of payment of the administrative fee.

The moment the licence comes into existence is key. Under Section 10(1)(a), for notifiable trades the licence arises "on the day of notification" - that is, the day on which a flawless notification reaches the office (with exceptions in the case of defects and failure to meet the conditions).

This is followed by Section 47(1): if the notifier meets all the conditions, "the Trade Licensing Office makes an entry in the Trade Register within 5 working days from the day the notification is delivered and issues the entrepreneur an extract". The requirements of the extract are contained in Section 47(2) and (3) (identification of the entrepreneur, the object of business, the period of validity and the day on which the trade licence came into existence). If the notification has defects, the office, under Section 47(4), calls for them to be remedied and sets a reasonable deadline "but at least 15 days"; for the duration of the deadline stated in the call, the deadline for the entry and the issue of the extract does not run.

Under Section 48, the office sends the extract or communicates the data to other authorities - the tax administrator, the Czech Statistical Office, the social security administration, the health insurance company and the registry court. And finally Section 49(1) imposes on the entrepreneur the duty to notify changes to the data "within 15 days from the day they arise".

Commentary and explanation

The most important thing to understand is the difference between the licence coming into existence and the issue of the extract. The licence arises on the day of notification (Section 10), whereas the extract is merely a certificate that the office issues within up to 5 working days (Section 47). In practice this means that you may start doing business practically immediately after submitting a flawless notification - you do not have to be holding the extract in your hand.

Moreover, the five-day deadline from Section 47(1) runs only if the notification is flawless. As soon as the office finds that a requirement under Section 45 or a document under Section 46 is missing, it calls on you (Section 47(4)) and the deadline "stops" until you remedy the defects. That is why it pays to submit a complete notification right the first time.

The purpose of the Unified Registration Form is to relieve entrepreneurs from running around between offices. Thanks to Section 45a and the institution of a "single filing point", at the Trade Licensing Office you also arrange social security, the health insurance company and the tax office all at once.

Practical implications and examples

Example 1 - unqualified (free) trade. You want to do business in an unqualified (free) trade (e.g. brokerage of trade and services). You fill in the URF, select fields from Annex No. 4, pay the administrative fee and submit the notification. If everything is in order, your licence arises the same day (Section 10) and you receive the extract within 5 working days (Section 47).

Example 2 - craft trade and a missing document. You notify a craft trade but forget the proof of professional qualification (Section 46(1)). The office calls on you and gives you a reasonable deadline, at least 15 days (Section 47(4)). If you submit the document in time, "the notification is deemed to have been flawless from the outset" (Section 47(5)).

Example 3 - relocating the registered office. After a year you move the company's registered office. Under Section 49(1) you must notify this within 15 days. However, if the change is already recorded in a public register, the office ascertains it itself and you do not have to report anything.

Related context

The notification is just one step in the whole process. You will find the practical procedure from A to Z in the guide on how to set up a trade. Before you fill in the object of business, take a look at the trade catalogue, where you will find out whether it is an unqualified (free), craft, regulated or licensed (concession) trade - this determines which documents you submit under Section 46. Later changes and notification duties are governed by Section 49, which is followed by the operation of the trade.