How to do business with the help of a responsible representative?
Do you dream of opening your own confectionery or car repair shop, but don't have a degree in the field? Don't despair - just make an appointment with someone who does. In fact, you can do business without school or work experience through a professional guarantor. Learn how to do it.
Who is the responsible representative?
The responsible representative of a self-employed person, sometimes referred to as a trade guarantor, is the natural person who is responsible for the proper running of the trade. A guarantor can be used by sole traders and companies - typically this is where a business does not have the necessary expertise but wants to set up a tied, craft or licensed trade.
For details, see the article on how the different types of trades differ.
What conditions must a responsible representative meet?
However, not everyone can become a guarantor for self-employed persons. The main criterion is, of course, professional competence in the relevant field. But this is not the end of the list of requirements.
The conditions for performing this function are regulated in detail in §11 of the Trade Licensing Act, according to which the responsible representative must:
- Be fully competent and of good character.
- Meet the special conditions required for obtaining a trade licence in the relevant field (for example, education or experience in the field). We discuss the subject in more detail in the article on the conditions of the trade.
- Have a contract with the entrepreneur.
The responsible representative is also subject to several restrictions. For example:
- Perform this function for more than 4 entrepreneurs.
- Be a member of the controlling body of the same enterprise.
- Be banned from working in the relevant field (he/she must also not have had his/her trade licence revoked in the past year).
Obligations of the responsible representative
The responsible representative supervises the proper conduct of the trade and also ensures compliance with trade law. If the guarantor detects misconduct, he or she should bring it to the attention of the entrepreneur (ideally in writing).
The responsible representative is accountable to the entrepreneur himself (not to the trade licensing authority), who can claim damages from the entrepreneur if this duty is breached.
Warning! The appointment of a professional representative does not relieve the entrepreneur of his liability towards third parties. He still carries out the trade himself - as the statutory body of the company or the sole trader, he is furthermore externally liable for any damages. The guarantor is then liable for compliance with the regulations exclusively to the entrepreneur himself, not to his clients or customers.
How to do business through a guarantor?
In order to obtain a bound, craft or licensed trade in the Czech Republic, the entrepreneur must prove his or her professional competence to the trade licensing authority. If this is not possible, he can contract a responsible representative to prove his competence in his place.
If you want to start your business in this way, be sure to submit the following to the authority:
- proof of the guarantor's professional competence (for example, a teaching certificate);
- a notarised and signed declaration by the responsible representative agreeing to act in this capacity.
The administrative authority will also check the integrity of the proposed guarantor, but the authority will obtain an extract from the guarantor's criminal record itself.
The appointment of the professional representative must be notified to the trade licensing authority within 15 days. In the case of a licensed trade, everything also goes through an approval process. This takes a maximum of 60 days, with a few exceptions.
Termination of the responsible representative
Both the entrepreneur and the responsible representative may notify the termination of the guarantor's function. However, the responsible person must inform the entrepreneur in writing in advance of his or her resignation (and prove this to the authority).
In any case, the situation must be notified to the trade licensing authority within 15 days of the change. The entrepreneur then has 15 days to either refill the position or notify the business of the discontinuation.
Are you planning to start a business?
Put yourself in the hands of experts. We will take care of all the formalities associated with setting up a trade or business for you and prepare the documents for your responsible representative. Send us a message - and leave all the paperwork to us.