Obligations of the entrepreneur under Section 31 of the Trade Licensing Act

Running a trade is not only about what you sell or what service you provide. Act No. 455/1991 Coll., on Trade Licensing, imposes on you in Section 31 a number of specific obligations, the breach of which may lead to a fine. In this article we clearly explain what Section 31 requires, why it is so, and what to watch out for in practice.

What the law says

The provision of Section 31 is titled "Obligations of the entrepreneur" and contains nineteen subsections. The following are key for an ordinary trade licence holder:

• Marking of the registered office (Section 31(2)). The entrepreneur is obliged to "visibly mark with the business name, or with the name, or first name and surname and the company ID number, if one has been assigned, the building in which the registered office is located, if it differs from the residence". At the request of the Trade Licensing Office, you must also prove the legal grounds for using the premises in which your registered office is located (for example a lease agreement or the owner's consent). You do not have this obligation if the registered office is identical to your residence — except in cases where the residence is at the address of a registration office, a special registry or an administrative authority that officially cancelled the record of the registered place of residence.
• Proof of how goods were acquired (Section 31(3)). At the request of the supervisory authority and within the time limit it sets, you must "prove (…) the manner in which the goods being sold or the material used to provide services were acquired".
• Identification in purchases and pledges (Section 31(4) to (7)). When purchasing used goods, goods without proof of acquisition, cultural monuments and objects of cultural value, accepting them into pledge or brokering them, you must, before concluding the contractual relationship, identify the parties to it in accordance with the act against the legalisation of proceeds of crime and the financing of terrorism (subsection 4) as well as the object of the contractual relationship (subsection 5). The identification data is "recorded and kept for a period of 5 years from the day the contract is concluded" (subsection 6).
• Language availability at the business premises (Section 31(8)). At business premises for the sale of goods or the provision of services to consumers, a person with knowledge of the Czech or Slovak language must be present during the sales or operating hours.
• Proof of identity (Section 31(10)). The entrepreneur, persons acting on their behalf and the responsible representative are obliged to prove their identity to the employees of the Trade Licensing Office.
• Proof of sale (Section 31(14)). "The entrepreneur is obliged to issue, at the customer's request, documents proving the sale of goods and the provision of a service." The document must show the identification of the entrepreneur, the company ID number (if one has been assigned), the date, the type of goods or service and the price.
• Address for the settlement of obligations (Section 31(16)). No later than on the day the activity at the business premises ends, you must notify the office of the address at which any of your obligations may be settled, and report any changes to it for a period of 4 years.

Interpretation and explanation

The purpose of Section 31 is the traceability and honesty of trade. The state wants to know who is behind the business, where the goods being sold come from, and where the consumer and the supervisory authority can reach you.

The obligation to prove the origin of goods (subsection 3) targets the shadow economy and stolen items. Therefore, keep your invoices and delivery notes carefully — an inspection may require you to present them within a time limit it sets, and an inability to document the origin is subject to sanctions.

A stricter regime applies to second-hand shops, pawnshops and buy-ups (subsections 4 to 7). Here it is not just about a document, but about actual identification of the counterparty under AML rules and about keeping records. If the seller refuses to be identified, the law directly prohibits you from completing the transaction.

The obligation to issue proof of sale (subsection 14) is tied to the customer's request — so it is not the same as the obligation to register sales. The requirements for the document are, however, fixed and you should be able to meet them at any time.

Practical impacts and examples

• Rented office: If your registered office is at an address other than your residence, place a visible sign with the business name (or your name) and the company ID number on the entrance or doorbell. For an inspection, have the lease agreement ready as proof of the legal grounds for using the premises.
• E-shop with imports: Keep the invoices from your suppliers. When an inspection requests proof of how a specific batch of goods was acquired, you must present it within the set time limit.
• Electronics second-hand shop: With each buy-up, verify the identity of the seller and record the brand and serial number of the device. Do not buy up an item without identification — keep the records for 5 years.
• Café: Ensure that during operating hours someone is present who communicates fluently in Czech or Slovak. At a guest's request, issue a document with the price, the date and the type of goods.
• End of a lease of business premises: Before you close the premises, notify the office of the address for the settlement of obligations (it may not be the address of a registration office) and report any changes to it for 4 years.

Related context

The obligations under Section 31 build on other provisions of the Trade Licensing Act — in particular on Section 17 (the business premises and their marking), Section 11 (the responsible representative) and Section 5 (the registered office and residence). If you are still choosing your field of business, take a look at our catalogue of trades. If you are starting completely from scratch, go through the guide on how to set up a trade licence, where you will find the steps from notification all the way to your first inspection. Always verify the specific wording and the latest changes directly in Act No. 455/1991 Coll.