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Legal electronic system for entrepreneurs

The Chamber of Deputies is currently discussing a draft amendment to the Act on the Czech Chamber of Commerce. The amendment also introduces the Legal Electronic System (LES). Aiming to make the business environment in the Czech Republic more transparent, LES will accumulate all entrepreneurs’ duties on a single web portal and present them in an accessible format.

The main reason for the creation of LES is the unorganised, hard to understand and constantly changing legal framework for conducting business in the Czech Republic. LES should help overcome these obstacles by giving entrepreneurs a chance to carry out a simple check of what specific duties they have, how to comply with them, and what sanctions may follow if they fail to do so.

According to the draft amendment, the rather complex system will cover duties arising from existing regulations as well as those associated with new ones. The draft itself already contains a list of legal regulations that the government should evaluate by the end of 2018 to prepare a list of respective duties to be entered into LES; a list of the remaining regulations is to be created by the end of 2022. When drafting legal regulations in the future it will be obligatory to attach to the bills a list of newly proposed legal duties. The draft amendment under discussion also contains a provision that bans the authorities from imposing sanctions for the failure to meet duties that have not been listed in the attachments to the respective legal regulation; this makes the system even more efficient.

LES will be administered by the Czech Chamber of Commerce, which will be given the necessary authorisations for this purpose: for instance the right to obtain data from the register of persons. Based on the information obtained from the register of persons, LES will provide each entrepreneur with information tailored to their needs and business activities. The draft amendment expects the annual fee for using LES not to exceed CZK 1 000.

The draft amendment introducing LES has been submitted by deputies across the political spectrum, therefore we expect it to be passed even after the autumn elections to the Chamber of Deputies. From an entrepreneurial perspective, the actual look of the web portal, the accessibility of the system, and the inherent reduction of the administrative burden will be the most important aspects.