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  • TAKING STOCK OF THE 2019 CHANGES IN THE FIELD OF LAW: HOW THEY IN-FLUENCE BUSINESS

    20. 01. 2020

    "Too much red tape drains unnecessary financial resources from company budgets," says lawyer JUDr. Jana Felixová in the December issue of Retail News. Read more from the interview not only about law, but also about the business environment and clients' needs below, or in the digital version of the magazine on pages 10 and 11.

    „Retail News 12/20019“

    Taking stock of the 2019 changes in the field of law and their impact on businesses. An interview with attorney Jana Felixová not only about law, but also about the business environment and cli-ents' needs.

    Could you briefly describe the year 2019 from the point of view of changes in the legal arena?

    Clearly, I have to use the attribute „turbulent“. That, however, has been common in recent years. But I must also add that it is unfortunate. Unfortunate for citizens and especially for businesses.

    CWhat do you consider to be the main problem with respect to such turbulence?

    It creates an unstable legal environment, where you do not know whether the rules applied on Monday will continue to apply on Thursdays. Such environment does not make your life easy, and businesses have to invest more resources into monitoring legislation than into doing business. And this is not a healthy trend for the economy and the business environment in our country. Moreo-ver, the confusing state of affairs affects not only entrepreneurs but also their employees. Their employers, often small and medium enterprises, fail to manage all the administrative tasks, given the pressure of the huge amount of do´s and dont´s, and so it frequently happens that they go out of business. Too much red tape drains unnecessary financial resources from company budgets that could otherwise be invested in business development, or employee benefits, etc.

    In 2018, the proverbial "storm in a glass of water" was caused by the new privacy legislation - GDPR. What news did 2019 bring?

    In 2019, the issue of personal data protection continued to be a center of attention as Czech legisla-tors were unable to adopt on time the implementing laws for the flexible parts of the General Data Protection Regulation. The implementing law was not passed until April 2019, almost a year after the GDPR came into effect. Registration of beneficial owners in the relevant register continued to be a struggle for many busi-nesses. Since a registration fee was introduced from 1 January 2019, the vast majority of companies sought to register their beneficial owner by the end of 2018. The courts received around 50,000 submissions, and the registration, which normally takes a maximum of 5 days, took months. How-ever, despite this surge of submissions for registration, a significant number of companies still have to register their beneficial owners. These companies are at risk of penalization. Legislative protection of whistleblowers is a new thing in the pipeline. One can only hope that the resulting regulation will be as minimalist as possible without offering protection to anonymous op-portunists.

    How do entrepreneurs cope with the increasing number of laws which result in more and more obligations? Are they able to keep track?

    In recent years, there has been a clear trend among medium-sized companies to open their own legal departments (which used to be the privilege of large corporations) or to hire personnel with law degrees. These lawyers are in charge of the day-to-day agenda and have the task of keeping track of the company´s statutory obligations so that entrepreneurs can concentrate on their core business.

    Aren't these corporate lawyers in direct competition with independent attorneys and law firms?

    On the contrary. I perceive a corporate lawyer as a partner. We can help each other and save the client at least part of the costs for indispensable legal services. We speak the same language from the beginning, we are on the same wavelength and thus able to accomplish the desired goal faster. A corporate lawyer will take care of routine administration and routine legal transactions - review-ing and signing standard contracts and addressing standard business situations. We know from ex-perience that clients do not want to use independent lawyers for these routines, and especially repetitive tasks. Largely because of the cost.

    What should medium and small enterprises that cannot afford a company lawyer and do not want to hire additional staff do when they need to receive regular legal advice and process related ad-ministration?

    Larger offices, such as ours, can take on the role of corporate lawyer quite easily and under reason-able financial conditions. Our size gives us flexibility. In addition, we constantly improve ourselves and try to adapt to the needs of our clients. We recently launched an online legal counseling center for entrepreneurs propodniky.cz, which primarily reaches out to members of the Czech Chamber of Commerce, of which we are a proud partner and member. After all, we, lawyers, are entrepre-neurs ourselves, and therefore we understand the needs of others who do business. Our online counseling center, however, can very well serve any business, member or non-member of the Chamber of Commerce. However, members have one advantage - we provide them with our legal services at a discount. But we offer better terms to all our clients, especially if there is long-term collaboration. For in-stance, we offer a whole „package of legal service“, which, if not used in full, will be transferred to the following month. This is a way in which we adapt to the client in a dynamic way. In a given month, a client may need no service, the next month, they may need extra hours of work, but have services carried over from previous months and prepaid by a regular fee.

    What services are most sought for by your clients?

    Since Felix a spol. provide comprehensive legal services, the demand is really very diverse. Of course, commercial law prevails, followed by administrative law, data protection, information tech-nology law and intellectual property rights, real estate issues including financial, banking and tax aspects, etc. As I mentioned earlier, clients often turn to us for registration of their beneficial owner in the regis-ter of beneficial owners, for drafting of documents concerning data protection - consents, notifica-tion obligations, etc., for development of compliance programs to prevent corporate criminal liabil-ity for the conduct of their employees or governing bodies. Since we also specialize in labor and employment law, we draft employment documents for many of our clients and provide advice in a number of labor law situations. And then, of course, there is the diverse agenda of corporate internal rules and regulations. It may be interesting for you to know that if a business wanted to fully comply with all its legal obligations and wanted to introduce all mandatory and optional internal regulations mentioned in various piec-es of legislation, they would have to prepare roughly 60 individual documents.

    60 is a rather high figure. How can a regular business cope with such a requirement?

    Let me be frank: it is very difficult. However, it is important to realize that not all internal regulations are mandatory for every business. Some of them are optional. Rather, the problem is that there is no single, coherent list that would clearly indicate to companies which internal rules they must have and which are optional. We have put together such a list for our clients. Everyone is aware of the basic, mandatory regulations – labor safety, personal data protection, accounting systems, etc. The problem arises with internal regulations which or optional or recommended.

    How are companies to tell which optional internal regulation they need in their business?

    The first question to ask is whether an internal regulation can be helpful for a particular type of business. If you run an e-shop, for example, you certainly need clear terms and conditions as well conditions for returns and refunds. For a larger company, you will need to designate clearly tasks and responsibilities within the company through e.g. organizational rules. But there are internal regulations that will positively affect every company, for instance the compliance programs, I have already mentioned. In the past, when you failed to file your annual financial statement in the Commercial Register, you were asked by the court to rectify it. Today, this is considered a crime of misrepresenting economic data and information about corporate assets. The compliance program is the only effective tool to avert the imminent draconian sanctions for such an administrative in-fringement. Similarly, it is desirable to have rules, for example, for the use of company cars by employees. It is said that the best off-road vehicle is the company car. And clearly defined rules for their use can only lead to more responsibility of drivers and extend the life of the company´s assets. I could men-tion a number of other situations. It really depends on individual needs of each business or compa-ny.

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