CZECH REPUBLIC Law and Practice Contributed by: Petr Mlejnek, Robert Klenka, Matěj Manderla, Jan Wagner, Ivo Hartmann and Arbër Balliu, Tenacta, advokátní kancelář, s.r.o.
1. Legal System 1.1 Legal System and Judicial Order Introduction
Ordinary legislation forms the principal legal frame - work for business activities. The legislation most com - monly affecting commercial operations includes: • the Civil Code (Act No 89/2012 Coll.); • the Business Corporations Act (Act No 90/2012 Coll.); • the Labour Code (Act No 262/2006 Coll.); • the Trade Licensing Act (Act No 455/1991 Coll.); • the Insolvency Act (Act No 182/2006 Coll.); • the Competition Protection Act (Act No 143/2001 Coll.); • the Administrative Procedure Code (Act No 500/2004 Coll.); • the Civil Procedure Code (Act No 99/1963 Coll.); • the Income Tax Act (Act No 586/1992 Coll.); • the VAT Act (Act No 235/2004 Coll.); and • the Accounting Act (Act No 563/1991 Coll.). These legal acts regulate key aspects of commercial activity, including establishment of companies, corpo - rate governance, contractual relationships, employ - ment matters, taxation and insolvency proceedings. Judicial Decisions and Interpretation of Law Although judicial decisions are not formally recognised as a source of law, decisions of higher courts play an important practical role in ensuring legal consistency and predictability. Lower courts generally follow established judicial interpretation, particularly where legal provisions con - tain ambiguities or require further clarification. The most significant judicial institutions include: • the Constitutional Court; • the Supreme Court; and • the Supreme Administrative Court. Court Structure The Czech judicial system consists of four levels of
The Czech Republic is a civil law jurisdiction based primarily on codified legislation. The legal system relies principally on statutes enacted by Parliament and supplemented by implementing regulations, inter - national treaties and European Union law. Unlike com - mon law systems, judicial decisions do not formally constitute an independent source of law. Courts there - fore primarily apply and interpret legislative provisions rather than establish legal rules through judicial prec - edent. The current legal framework developed significantly following the political and economic transforma - tion after 1989 and the subsequent accession of the Czech Republic to the European Union in 2004. For businesses operating within the jurisdiction, this has resulted in a relatively predictable legal environment aligned with broader European regulatory standards. Sources of Law The Czech legal system operates through a hierar - chical structure of legal rules and instruments. Con - stitutional order forms the highest level of the legal framework and establishes fundamental principles concerning the organisation of the state, separation of powers and protection of individual rights. The principal sources of law include: • constitutional acts; • international treaties incorporated into the legal order; • directly applicable European Union regulations; • statutes adopted by Parliament; and • subordinate legislation issued by ministries and administrative authorities. The constitutional order of the Czech Republic con - sists primarily of: • the Constitution of the Czech Republic; • the Charter of Fundamental Rights and Freedoms; and • constitutional legislation adopted by Parliament.
ordinary courts: • district courts; • regional courts • high courts; and
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