Prohibition on the return of a contribution

This term refers to the law of the country selected below.

  Czech Republic

What is the prohibition on the return of a contribution?

This is one of the principles governing commercial companies established under Czech law, according to which a contribution belongs to the company, not to the shareholder. This prohibition is generally set out in Section 16 of the Act on Commercial Companies, stipulating that, neither during the existence of the commercial company nor after its dissolution, does a shareholder have the right to the return of the contribution. Similarly, it is not possible for the company and its shareholder to agree on or pay interest on the issue price.

However, there are certain exceptions to the above rule, where a shareholder is entitled to receive from the commercial corporation a consideration of the same kind as that provided as the contribution (whether in cash or in kind). Typical examples of such exceptions include the payment of dividends in a joint-stock company, consideration in the event of a reduction in registered capital in capital companies, a reduction in the minimum membership contribution in a cooperative, or a situation where the company does not acquire ownership rights to the non-monetary contribution made.