Czech Republic: registering the transfer of a pledged ownership interest

The Prague Commercial Register has recently started to require prior written consent of the pledgee (typically a financing bank) to be provided with the petition to register the transfer of a pledged ownership interest in a s.r.o. company.

This is clearly not required by the rules governing pledges and the scope of evidence the court should review when dealing with such petitions but meeting this requirement may help to avoid problems and delays. A shareholder intending to transfer its pledged interest should be aware of this and agree the provision of the consent of the pledgee, in a form satisfactory for the court, in advance. This may also be appropriate when registering similar dispositions of a pledged ownership interest, such as merging a s.r.o. company.