Termination and suspension of a trade: Sections 57, 58 and 31(11)

What the law says

The Trade Licensing Act (Act No. 455/1991 Coll.) distinguishes three situations that people often confuse: the permanent termination of a licence, its cancellation by the office, and the temporary suspension of trade operation. Let us go through them.

Termination of a trade licence (Section 57)

Under Section 57(1), a trade licence terminates:

• a) "by the death of the entrepreneur, unless the cases under Section 13 apply" (where the heirs continue the trade),
• b) "by the dissolution of a legal entity, unless the cases under Section 14 apply",
• c) "by the expiry of the term, if the trade licence was limited to a fixed term",
• d) by the deletion of a foreign person obligatorily entered in the Commercial Register,
• e) where a special legal regulation so provides,
• f) "by a decision of the Trade Licensing Office to cancel the trade licence".

A licence limited to a fixed term does not terminate upon the expiry of the term if the entrepreneur, even before its expiry, notifies that they intend to continue operating, or where applicable applies for a change to the decision granting the concession (Section 57(2)). The office informs the bodies listed in Section 48 and Section 55(2) of the termination.

Cancellation or suspension by the office (Section 58)

Section 58 distinguishes two levels. Mandatorily (the office "shall cancel"), under subsection 1, a licence terminates if:

• a) the entrepreneur has ceased to meet the general conditions under Section 6(1) (legal capacity, clean criminal record),
• b) impediments to trade operation under Section 8 have arisen (e.g. a court-imposed prohibition of activity, an as-yet-unresolved insolvency),
• c) the entrepreneur themselves requests cancellation,
• d) the entrepreneur fails to prove a legal ground for using the premises of the registered office.

Optionally, the office cancels the licence or suspends operation in the event of a serious breach of duties laid down by the decision granting the concession, by the Trade Licensing Act, or by special legal regulations: at the proposal of the state administration body that issued an opinion under Section 52 (subsection 2), or on its own initiative (subsection 3). Operation may be suspended for no longer than one year (Section 58(8)).

Suspension of trade operation (Section 31(11))

Under Section 31(11), trade operation is suspended on the day the notification of suspension is delivered to the Trade Licensing Office, or on a later day stated in the notification. If the licence is limited to a fixed term, it may be suspended for no longer than the duration of that licence. For the duration of the suspension, the duties under this Act apply to the entrepreneur with the exception of certain duties tied to actual operation - in particular the duty to mark the building in which the registered office is located and the business premises, and the duty to meet the conditions of professional or other qualification. You then resume operation under Section 31(12) at the earliest on the day the notification of resumption is delivered to the office (the notification must be filed in advance).

Commentary and explanation

The key distinction is between termination and suspension. Termination under Section 57 is definitive - the licence ends and the company ID number (IČO) is "closed". A suspension, by contrast, is temporary: the trade remains registered, you keep your IČO, and you can resume your business at any time. Therefore, if you simply stop doing business for a while (parental leave, employment, illness, a seasonal field), a suspension is far more practical than cancelling and re-establishing the trade.

The second important point is that a suspension cannot be backdated. The law assumes that a suspension takes effect at the earliest on the day the notification is delivered to the office. So you cannot, in June, notify that you "suspended" already as of January in order to avoid the advance payments for the elapsed months. The date is either current or in the future.

With cancellation by the office (Section 58), pay attention to whether it is a mandatory cancellation under subsection 1 or a sanction-based cancellation or suspension under subsections 2 and 3. A mandatory cancellation is essentially "technical" - for instance when you cease to meet the clean criminal record requirement or fail to prove a right to the registered office. A sanction-based procedure comes into play only upon a serious breach of duties, and the office may also choose the milder option - suspending operation for up to a year. A decision on cancellation can be challenged by appeal.

Caution: Cancellation of a licence by the office under Section 58(2) or (3) (sanction-based) may have a "reach" into the future - upon a new notification of a trade, the clean criminal record is assessed, and an earlier serious breach may act as an impediment. A voluntary suspension leaves no such trace.

Practical impacts and examples

Example 1 - seasonal business. You run an ice-cream stand and do not work in winter. Instead of cancelling the trade, you notify the office of a suspension from 1 October and a resumption from 1 April. For the duration of the suspension you do not pay, as a self-employed person on your main activity, the advance payments for social security and health insurance, and you keep your IČO. In the spring, a single notification of resumption suffices.

Example 2 - starting employment. You take a full-time position and do not yet want to terminate the trade entirely. You suspend it for an indefinite period. If, in three years, you decide to resume your business, you file a notification of resumption and the trade "comes back to life" without a change of IČO and without a new fee.

Example 3 - loss of a clean criminal record. An entrepreneur is convicted by a final judgment of an intentional criminal offence committed in connection with their business. They thereby cease to meet the general condition under Section 6, and the Trade Licensing Office cancels their licence under Section 58(1)(a) - this is not a suspension but a permanent termination by official authority.

Example 4 - a suspension notified in advance. In the middle of the month you find out that you will not be doing business from next month. You file the notification right away with the date of suspension set to the first day of next month. Everything proceeds legally and in advance; if you waited and tried to "catch it up" retroactively, the office would not recognise the retroactive date.

Tip: You file the notification of suspension and of resumption free of charge - neither the suspension nor its termination is subject to an administrative fee. They can be handled online via the rzp.gov.cz portal, by data box, or in person at any Trade Licensing Office.

Related context

The topic of termination and suspension builds on the establishment and conditions of a trade. If you are only just starting out or returning after a suspension, go through the guide on how to set up a trade - it covers the general conditions under Section 6 as well as the notification procedure, which also applies when resuming activity. For selecting or changing a field, the catalogue of trades is useful, where you will find an overview of the individual types and specific activities.

When suspending your trade, do not forget the follow-up steps towards other institutions: also notify the suspension of your self-employed activity to the Czech Social Security Administration (ČSSZ) and to your health insurance company, otherwise your advance payments will keep running. As soon as you resume your business, the duties come back into effect in full.

Note: This article is informative in nature and is based on the wording of Act No. 455/1991 Coll. in force as of 2026. The numbering of subsections may shift as a result of amendments; in a specific case (especially with a sanction-based cancellation under Section 58) we recommend verifying the current wording and consulting the Trade Licensing Office or a lawyer.