How to Stop Company Dissolution for Missing Financial Statement Filings

22.4.2026 | ARROWS law firm

If you have received a resolution from the Companies Register Court initiating proceedings to dissolve your company for failing to file financial statements in the Collection of Deeds of the public register, it is not a final verdict. You will learn how a notice to remedy works, what steps to take to prevent liquidation, what legal remedies are available to you, and how to defend yourself in the proceedings. The attorneys at ARROWS, a Prague-based law firm, encounter this situation regularly and can effectively help clients resolve it.

In the image, we see an attorney providing a consultation regarding proceedings for the dissolution of a company.

When and why the court initiates dissolution proceedings for failure to file documents
What problems you can expect if you fail to file documents
How dissolution proceedings work – from the notice to the commencement of liquidation
Remedies and defence
Situations during liquidation – when it is already too late
Ensuring long-term compliance

The Companies Register Court cannot proceed without first issuing a notice. Before initiating proceedings to dissolve your company, the court must call on you to remedy the situation so that you have a chance to file the missing documents.
Failure to file documents is a real problem. It is not merely a formality – addressing it requires swift, proactive action and legal know-how under Czech legislation.
Liquidation has only been commenced, not completed. In the early stage you have more options to reverse the situation than when liquidation is at an advanced stage.
You will not manage without legal support. The right documents, responses to court notices and follow-up steps require knowledge of procedural law and the ability to negotiate with public authorities in the Czech Republic.

When and why the court initiates dissolution proceedings for failure to file documents

The obligation to file financial statements and the annual report in the Collection of Deeds of the public register follows from Act No. 563/1991 Coll., on Accounting (the “Accounting Act”) and in particular from Act No. 304/2013 Coll., on Public Registers of Legal and Natural Persons and on the Register of Trust Funds (the “Public Registers Act”). This is not a voluntary activity but a mandatory obligation. Accounting entities must publish their financial statements within thirty days of their approval by the supreme body of the legal entity and no later than twelve months from the balance sheet date, as set out in Section 21a(4) of the Accounting Act and Section 18a(2) of the Public Registers Act. If they fail to comply with this obligation, they face various sanctions.

The Companies Register Court is the authority tasked with supervising compliance with these obligations. This is not merely an administrative check – it is a measure intended to protect creditors, the state and third parties who should have access to the company’s financial information. In practice, failure to file documents means that the company may appear hidden or inactive, which can lead to suspicions of breaches of legal regulations, for example in the area of taxes.

Conditions for initiating dissolution proceedings

The Companies Register Court will not initiate proceedings to dissolve a company without cause. The conditions set out in the Czech Code of Civil Procedure and the Public Registers Act must be met. In particular, this concerns situations where mandatory provisions of law are being breached – in this case, the obligation to file financial statements in the Collection of Deeds. Under Section 105a(1) of the Public Registers Act, the court first calls on the company to remedy the non-compliance within a reasonable time limit. Only after the company fails to respond to the notice, or fails to respond in a timely and adequate manner, may the court decide to dissolve it with liquidation or even without liquidation, provided further conditions are met.

In practice, this means the court must give you an opportunity to remedy the situation. Such a notice is usually served on you personally. Service of a notice to remedy defects in a registration entry or failure to file a document is subject to a special service regime, under which service by legal fiction is excluded if the company’s registered office is entered in the register. If the court cannot duly serve the notice or if the company does not respond, the Companies Register Court may initiate proceedings to dissolve the company.

What problems you can expect if you fail to file documents

If your accountant or lawyer has long overlooked the obligation to file documents, or if you have knowingly neglected it, you face progressively stricter sanctions. The Companies Register Court may first impose a procedural fine of up to CZK 100,000 under Section 104(1) of the Public Registers Act. That is not a small amount. But that is not all.

If you continue to remain inactive even after the procedural fine and the notice, the court moves to a harsher measure – initiating proceedings to dissolve the business corporation with liquidation. At the same time, the accounting entity may face an administrative offence under the Accounting Act, which carries a fine of up to 3% of net business assets under Section 37(1)(f) of the Accounting Act. For a mid-sized company with net business assets in the tens of millions of Czech crowns, this can mean an amount in the range of several million to tens of millions of Czech crowns.

In addition, this opens the door for the tax authority to start monitoring you as a high-risk entity. Although the Supreme Administrative Court has emphasised in its case law that mere failure to file documents in itself says nothing about whether you are involved in tax fraud, in practice long-term failure to file documents may increase the tax authorities’ interest, lead to more frequent audits and complications when approving expenses or tax deductions.

Liability of the statutory body

Another fundamental issue is the personal liability of the persons who breached this obligation. If you are an executive director, a member of the board of directors or another member of the statutory body, you may be personally liable for damages and breaches of law. This constitutes a breach of the duty of due managerial care within the meaning of Act No. 90/2012 Coll., on Business Corporations, as amended (the “BCA”). You may be criticised for failing to fulfil your statutory duty to ensure that the company complies with its legal obligations. In court proceedings concerning the dissolution of the company, this will be particularly relevant if the court finds that the breach was intentional or due to gross negligence.

Loss of control over the company

When the court decides to dissolve the company and orders liquidation, the rules you are used to no longer apply. The general meeting loses its decision-making powers. Instead, a court-appointed liquidator begins to act, who does not have to be you or someone close to you. At this point, the liquidator has essentially absolute power – deciding how assets will be sold, how debts will be repaid, and how the remaining balance will be distributed. Your influence over the course of the liquidation is substantially reduced.

How dissolution proceedings work – from the notice to the commencement of liquidation

The Companies Register Court proceeds in accordance with the Public Registers Act and the Czech Code of Civil Procedure by first assessing whether your registration entry breaches mandatory provisions of law. If it finds that it does (in this case, missing financial statements), it must give you a chance. The court will send you a notice requiring you, within a reasonable time limit (usually one month from the date of service), to submit all missing financial statements for filing in the Collection of Deeds.

This notice is a decisive moment. Although the law does not specify exactly how long this time limit must be, the case law of the Supreme Court clearly states that the time limit must be reasonable. One month is generally considered a reasonable period to supplement documents that already exist and are merely not filed in the Commercial Register. This is not a one-off opportunity—if you can justify it (e.g., you were prevented from keeping accounting records, you received the notice late, etc.), you may request an extension.

Once you receive the notice, you must act immediately. Either you actually prepare and file the financial statements, or you request an extension. Inaction or ignoring the notice is the worst possible step.

The attorneys of ARROWS, a Prague-based law firm, can help you at this stage by ensuring the missing documents are prepared in cooperation with your accountant, and by personally handling the correspondence with the court.

Commencement of dissolution proceedings

If you do not respond to the notice, or you do not respond in time and in accordance with the law, the court moves to the next stage. It will issue a resolution commencing proceedings to dissolve the business corporation with liquidation, or potentially even without liquidation if the conditions under Section 105a of the Act on Public Registers are met. The court must first commence the proceedings by a resolution, and only afterwards—after investigating and finding that the deficiency persisted despite the notice—may it dissolve the company and order liquidation (a second resolution).

In these proceedings, you are a party. This means you are entitled to participate, submit motions, objections, witness statements, etc. You are also entitled to file remedies, such as an appeal. The point is not that the court “does not want” to dissolve your company, but rather that you will defend yourself by showing that you are either already fulfilling the obligation, or that you have a reason for non-compliance that relieves you of liability.

What you can do after receiving a notice

Step 1: Find out exactly what is missing

First, you must clearly identify which specific financial statements are missing from the Commercial Register. The Act on Public Registers requires that the Collection of Deeds contain financial statements for each financial year for which the company was obliged to publish them. This usually means you are missing statements for the most recent years (or even more if you have been inactive for a long time).

Log in to the public register, check the available documents, and determine precisely what is missing. If you have an accountant or auditor, contact them immediately. Find out whether the statements physically exist (for example as files on a computer or held by the accounting firm), or whether they still need to be created. If you are missing statements for years in which you were in fact inactive, the situation is more complex—you must prepare proper financial statements documenting that you were inactive (and therefore had no revenues, no costs, etc.).

Step 2: Prepare the documents

Once you know what is missing, prepare it. You have several options. The simplest is where the financial statements exist and nobody has simply filed them. In that case, you just need to retrieve them from the files and formally file them in the register online. Almost all register courts already have a digital interface, so this is not a physical trip, but an online login and PDF upload.

A more complicated situation arises if the statements do not exist at all. Then you will need to contact your accountant and ask them to prepare them retrospectively. This may take some time, especially if there were years when you did not keep proper accounting records. The attorneys at ARROWS, a Prague-based law firm, can clearly advise what is truly necessary and can also formally liaise with your company’s accounting firm to speed up the preparation.

Step 3: Respond to the court’s notice without delay

Time is the most important factor. You have the deadline stated in the notice—typically one month. That may seem like a long time, but it is not. Within a week of receiving the notice, you should contact your attorneys and your accountant. During the second week, the schedule should be clear. In the third and fourth weeks, you must physically prepare the documents and file them.

Do not rely on leaving it to the last minute. If you find out on day 28 that something went wrong, you have no time to fix it. And this is exactly where things often go wrong—companies wait, the deadline runs, and then they are surprised that it is already too late and the court has commenced proceedings.

Step 4: Consider whether to request an extension

If you genuinely believe you will not make it in time, it may, under certain circumstances, make sense to formally request an extension of the deadline from the court. This is not automatic, but if you have a reasonable reason (e.g., you only recently discovered the documents were missing; they are held by third parties; the accountant is significantly delayed), you can try. The attorneys at ARROWS, a Prague-based law firm, know how to draft such a request so that the court considers it seriously, rather than merely formally.

What to do if you do not respond to the notice in time

If you received a notice and did not respond within the deadline, the court proceeds under the law. First, it will usually impose a procedural fine of up to CZK 100,000 under Section 104(1) of the Act on Public Registers, which you must pay. This fine cannot be ignored—if you do not pay it, it may lead to enforcement proceedings and, in the event of long-term non-compliance with obligations, to further complications ultimately leading to the dissolution of the company.

At the same time, the court moves to the actual commencement of dissolution proceedings. It will issue a resolution commencing the proceedings. You are still a party here and can defend yourself. But now it is no longer just about supplementing the documents—you must defend yourself against the very existence of the ground for dissolution.

Commencement of liquidation

Once the court finds that the ground for dissolution persisted despite the notice and despite the threat of a fine, it will issue a second resolution dissolving the business corporation and ordering its liquidation. If the statutory conditions are met, the court may also decide to dissolve the company without liquidation, which is even more serious (see below). By this decision, the company enters liquidation and leaves the normal business regime.

At this point, your options for managing the matter are significantly reduced. The general meeting can no longer decide on ordinary matters. Instead, a court-appointed liquidator acts in your place, tasked with monetising the assets, satisfying creditors, and proposing the distribution of any remainder.

Legal remedies and defence

If you disagree with the initiated proceedings or with the decision on dissolution, you have the right to file an appeal with the High Court. The appeal must be filed within the statutory time limit (usually fifteen days from service of the decision) and must include explicit reasons why you believe the court decided incorrectly.

Typical grounds for an appeal may include:

The court proceeded incorrectly in the proceedings (e.g., you were not given the opportunity to be heard);
The court incorrectly assessed whether it granted you an adequate period to remedy the deficiencies;
You have discovered new facts or evidence that change the situation;
The court incorrectly assessed that the filing is genuinely in breach, or that it cannot be remedied in another way.

The attorneys of ARROWS, a Prague-based law firm, can prepare the appeal and protect your interests before the High Court. They have experience with this and know which arguments work in court.

Extraordinary appeal on points of law

If the appeal is unsuccessful, in certain cases you may file an extraordinary appeal on points of law with the Supreme Court. However, this is the last option and its success rate is lower. An extraordinary appeal on points of law is filed only if it concerns an important legal question or if a serious procedural error occurred. It is not a common remedy.

Filing a motion for transformation – last chance

If your company is already in liquidation but has not yet been struck off the register (and the distribution of the liquidation balance has not yet begun), you still have one last option: filing a motion for the company’s transformation. Under Act No. 125/2008 Coll., on transformations of commercial companies and cooperatives, as amended, it is possible, upon the motion of the company that intends to transform, to file a motion to set aside the court’s decision dissolving your company, provided that you simultaneously submit a transformation project. This option is governed by Section 106 of the Public Registers Act.

This is an unusual option, but it can serve as a kind of last-resort safety net. It can be used, for example, where your company merges with another company (a merger) or transforms into a different legal form. The court will then set aside its liquidation decision if you prove that:

The reason for which the company was dissolved has ceased to exist (i.e., you have now supplemented the missing documents);
The company has not yet been struck off the Commercial Register;
You have a transformation project approved by the general meetings of the affected companies.

However, this solution is more complex and requires a very precise legal procedure. You should definitely have it handled by attorneys – ARROWS, a Prague-based law firm, has experience with this procedure and can assist you.

Possible issues	How ARROWS helps (office@arws.cz)
Loss of the time window for remedies. You usually have only one month to supplement the documents, and if you leave it until the last minute, you may not make it.	The attorneys of ARROWS, a Prague-based law firm, will promptly compile a list of missing documents, coordinate with your accountant, and ensure timely filings with all relevant authorities. They have experience with the timelines for similar remedial steps.
Incomplete or formally defective documents. The register court has specific requirements for format and content – an error in a signature, numbering sequence, or document structure can prevent acceptance.	ARROWS, a Prague-based law firm, will review your documents before final submission and ensure formal compliance. This will help you avoid unnecessary mistakes and corrections.
Inability to obtain or reconstruct old accounting records. If the accountants are gone or old supporting documents are not available, preparing retrospective financial statements is difficult.	The attorneys at ARROWS, a Prague-based law firm, will help you present the situation to the court and, where appropriate, argue that the court erred in the same respect, or that the deadline can be extended. They can also liaise with accountants or your company’s archive.
Personal liability of managing directors and senior managers. Long-term failure to file documents may mean personal liability for breach of law and for damage to creditors.	ARROWS, a Prague-based law firm, will also defend you in any follow-on disputes or criminal matters. They can also provide a legal analysis of your specific position and minimize the risk of personal liability.
Inability to defend yourself in court proceedings. Proceedings on the dissolution of a company are governed by special procedural rules, and without legal representation it is very difficult to argue correctly.	The attorneys of ARROWS, a Prague-based law firm, will represent you in court proceedings, file motions, objections, and appeals, and defend you at every stage. Their professional indemnity insurance of up to CZK 400,000,000 guarantees a serious approach.

Situations during liquidation – when it is already too late

If the court has already carried out the resolution on dissolution and liquidation, you are in the middle of a process that is harder to correct. That does not mean, however, that everything is completely lost. Liquidation has different phases.

At the beginning of liquidation, a liquidator is appointed, who must notify all creditors and publish a notice of liquidation in the Commercial Bulletin (Obchodní věstník). The liquidator must prepare an opening balance sheet and an inventory of assets. The proceeds of liquidation are then gradually realized.

At this point, you can take the following steps:

Find out who the liquidator is – you can ask them to explain the procedure and allow you to participate in decisions.
File an appeal against the dissolution resolution (if you have not already done so).
Consider filing a motion for transformation (if it can be organized).
Monitor that the liquidator proceeds properly and transparently – you have this right as a former shareholder.

If liquidation reaches the distribution of the liquidation balance

Once the liquidator finishes selling the assets and pays the creditors, a balance will remain. This must then be distributed among the original shareholders. At this point, your ability to intervene actively is very limited. The liquidator has already decided how the assets were realized, and now it is only about distributing what remains.

However, at this stage you can have the liquidator’s actions reviewed to determine whether they proceeded transparently and in accordance with Czech law. If you find that they acted incorrectly (e.g., sold assets at an undervalue, or failed to take your legitimate interests into account), you may seek the liquidator’s liability. This is more typically pursued by creditors and the state, but also by shareholders who have an interest in maximizing the liquidation balance.

Looking at the issue from the other side as well: Why the court does this

The Public Registers Act and the policy of the Ministry of Justice have a clear objective: to protect creditors, the state, and the public from so-called “dead shells” – companies that formally exist in the register but are not actually active and do not meet their legal obligations. Such companies can be misused, for example, for tax fraud, money laundering, and similar activities.

The court has not singled out your company for liquidation. This is a systematic legislative measure intended to ensure that the register contains only entities that truly exist and function.

New rules with stricter sanctions

Following the amendment to the Czech Act on Public Registers (which entered into force recently, specifically on 1 January 2021 with the introduction of Section 105a of the Act on Public Registers), the conditions for dissolving a company due to failure to keep accounts have been tightened again. It is now possible to dissolve a company even without liquidation (i.e., with a fast deletion from the register without a lengthy liquidation process) if the conditions set out in Section 105a(1) of the Act on Public Registers are met, in particular if:

the company cannot carry out its activities due to a lack of members of the statutory body, or
the company cannot be contacted (e.g., it is not present at its registered office address).

Failure to file financial statements is often one of the key indicators that a company is de facto inactive or unreachable.

This is even more serious than before. Therefore, it is absolutely essential to respond to any requests from the Czech register court – failure to do so may mean not only liquidation, but also complete deletion without a liquidation process, in which case you will not be able to collect your shares in any remaining assets.

Ensuring a long-term remedy

Once you get out of this situation (possibly with the help of attorneys from ARROWS, a Prague-based law firm), you should implement a system to ensure it does not happen again. This means:

Engaging an accountant or accounting firm that will automatically prepare and file all required documents;
Setting an internal schedule – you know exactly when the designated day is for preparing and filing financial statements;
Appointing someone responsible for compliance with these obligations (e.g., the CFO, legal counsel, company administrator).

Without such a system, the risk of the situation recurring increases.

Register monitoring

Periodically check for yourself what is recorded in the register about your company. Verify whether the documents are up to date and whether there are any uncorrected details. If you see anything that seems suspicious, contact your lawyer and accountant.

If in doubt, contact office@arws.cz – the attorneys at ARROWS, a Prague-based law firm, can advise you on how to address the matter.

Connection with situations where your company is subject to inspections

If your company faces a tax audit and the Czech tax authority finds that you have not filed financial statements for a long time, it will view this as suspicious. Although the Supreme Administrative Court emphasizes that failure to file documents in itself is not evidence of participation in fraud, in practice it will mean that the tax authority will “put you on the hook” – they will scrutinize you more intensively and create difficulties when approving expenses or tax deductions.

This means that addressing the issue of not filing documents also has tax implications. The attorneys at ARROWS, a Prague-based law firm, can help you not only with the process itself (remedy, court proceedings), but also with coordination with the tax authority and ensuring that audits proceed as smoothly and as painlessly as possible.

Final summary

If you have received a resolution initiating proceedings to dissolve your company for failing to file documents in the Collection of Deeds of the public register, it is not the definitive end of your company. It is a warning and a call to remedy the situation. The law gives you an opportunity – but you must use it quickly, competently, and consciously.

If you are in a situation where you have received a resolution initiating dissolution proceedings, or if you suspect something is missing from the register, do not hesitate to contact the attorneys at ARROWS, a Prague-based law firm. Ideally today. Every day that passes without action brings you closer to the point where it will already be too late.

The attorneys at ARROWS, a Prague-based law firm, deal with these situations systematically, have experience, and can help you get out of the situation with minimal losses. ARROWS’ professional liability insurance up to CZK 400,000,000 guarantees that you will be provided services at the highest level of responsibility and professionalism.

Write to us at office@arws.cz, call us, share your concerns – and we will help you resolve the matter competently and in time.

FAQ

1. What exactly is the “Collection of Deeds” in the register, and why is it so important?The Collection of Deeds is a public archive where all important documents of your company are stored. It includes financial statements, annual reports, shareholders’ meeting resolutions, and other documents. Creditors, potential business partners, and public authorities can view these documents free of charge. If they are not there, it means they are “hidden”, and the public (including creditors and the state) knows that something is not right. That is why the state insists on it – it is about transparency and protection. If you are not sure what your company is missing, ask the attorneys at ARROWS, a Prague-based law firm – they will explain it in the context of your specific case.

2. What is the difference between liquidation initiated by me and liquidation ordered by the court?
The basics are the same – monetising assets and paying debts. But that is where the similarities end. If you initiate liquidation, you decide on the liquidator, you can monitor the process, and you have greater control. If it is ordered by the court, the court selects the liquidator and you have much less control. In addition, court-ordered liquidation usually takes longer and is more expensive (because the court and public officials become involved). If it is possible to avoid court-ordered liquidation and instead organise a voluntary liquidation, it may be beneficial for you. Contact office@arws.cz and ask what the best solution is in your case.

3. Will the court return the money I invested in the company?
No. Liquidation works so that all debts and liquidation costs are paid first. Only what remains is distributed among the shareholders. If you are a shareholder (not a creditor), you are entitled to the so-called liquidation balance. But it is not guaranteed that anything will remain. Often everything is monetised, creditors and debts are paid, and the balance is zero. In that case, you will receive nothing. This is one of the reasons why it is important to prevent liquidation, or if it must occur, to ensure it proceeds transparently and efficiently. The attorneys at ARROWS, a Prague-based law firm, can help you with both.

4. Can the court change its decision during liquidation?
In principle, no. Once it issues a resolution on dissolution and liquidation, that decision is binding on that court. You can defend yourself by filing an appeal, which will be dealt with by a higher instance (the High Court, and possibly the Supreme Court in the case of an extraordinary appeal), but the original court will not change it arbitrarily. The exception is a situation where you file a motion for transformation and prove that the problem has been resolved – then the court may revoke its decision. But that is truly a last resort. The most important thing is to act quickly at the initial stage, when you receive a request to remedy the situation. After liquidation has been initiated, your options are very limited.

5. What documents do I need to bring to a consultation with a lawyer?
Bring the invitation/resolution from the register court (which should have been sent to you by post), any extract from the register you have available, your most recent financial statements (if they exist), and a list of all persons who are or were in the role of executive director/board member/shareholder. Also bring your articles of association and incorporation documents. If you have an accountant, bring them to the consultation so they can help clarify the accounting side of the matter. The attorneys at ARROWS, a Prague-based law firm, will then tell you exactly what is missing and how to proceed.

Disclaimer: The information contained in this article is for general informational purposes only and serves as a basic guide to the issue as of 2026. Although we strive for maximum accuracy, laws and their interpretation evolve over time. We are ARROWS Law Firm, a member of the Czech Bar Association (our supervisory authority), and for the maximum security of our clients, we are insured for professional liability with a limit of CZK 400,000,000. To verify the current wording of the regulations and their application to your specific situation, it is necessary to contact ARROWS Law Firm directly (office@arws.cz). We are not liable for any damages arising from the independent use of the information in this article without prior individual legal consultation.

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