Slovak partial division has been available since March 2024 and we examine it in the article on partial division: separating part of a business while the original company survives. The Czech Act on transformations of companies and cooperatives (Act No. 125/2008 Sb.) provides, alongside partial division, for a form Slovak law does not have: the spin-off. An owner of a Czech company who wants to sell only one division, admit an investor into a single activity or separate a risk chooses between three routes. Two of them are transformations under the Act on Transformations; the third is a contractual sale of part of an enterprise under the Czech Civil Code.
Partial division: a new company for the shareholders
On a partial division the company being divided is not dissolved and part of its business assets passes to one or more new or existing companies (Section 243(1)(b)). Under the project, the shareholders of the company being divided also become shareholders of the successor company (Section 244(2)), so a sister structure arises much as on a Slovak partial division. Each shareholder thereby remains a shareholder of the company being divided, and the participation of any of them may be terminated only with the consent of all shareholders; in a joint-stock company, special rules on the acquisition of own shares apply (Section 249(1) and (2)). The project states the exchange ratio, that is, how many interests in the successor company and of what kind each shareholder receives, and where applicable whose participation in the company being divided is to cease (Section 250(1)(c)). Partial division is therefore suited above all to shareholders parting ways, each taking their own part of the business with them.
Spin-off: a subsidiary in a single registration
On a spin-off with the formation of a new company, the company being divided is not dissolved, the spun-off part of its business assets, including employment relationships, passes to the new successor company and the company being divided becomes its sole shareholder (Section 244(3) of Act No. 125/2008 Sb.). On a spin-off by merger, the spun-off part passes to an existing company and the company being divided acquires an interest in it, unless the project excludes the acquisition of an interest where it is that company’s sole shareholder (Section 244(4)). For a carve-out before a sale this is the most direct route: after registration, the parent company holds an interest in a subsidiary carrying only the spun-off division, and it sells that interest to the buyer as on an ordinary sale of a company.
The Slovak Act on Transformations does not offer this outcome, because under it a division may take the form only of a full division or a partial division (Section 2(7) of Act No. 309/2023 Coll.). A Slovak subsidiary holding a division is achieved by a contribution or a sale of part of an enterprise, as explained in the question on contributing or selling a division to a subsidiary s. r. o..
The division project and its publication
The project must, among other things, determine which employees pass to the successor company and which remain, and what assets and what debts pass or remain with the company being divided; immovable property is identified in it in accordance with the rules on the public register of immovable property (Section 250(1)(h) and (i)). On a partial division or a spin-off with the formation of a new company, the part of the business assets being split off or spun off is valued by an expert report (Section 253(2)). The project, together with a notice to creditors, employee representatives and shareholders of their rights, is deposited in the collection of deeds at least 1 month before the day on which the transformation is to be approved (Section 33(1)); the alternative is publication on the company’s website on the conditions in Section 33a. The transformation is decided on by the general meeting, unless the Act on Transformations provides otherwise, both in a limited liability company and in a joint-stock company (Section 190(2)(h) and Section 421(2)(q) of Act No. 90/2012 Sb.).
Protection of creditors
Creditors of the participating companies may request adequate security if the transformation worsens the recoverability of their claims not yet due arising from obligations incurred before publication of the project (Section 35(1)). If they do not agree with the company, the security is established by the court; the right must be exercised before the court within 3 months of publication of the project, failing which it is extinguished, and the filing of an application does not prevent the transformation from being entered in the commercial register (Section 35(2) and (4)). The company being divided also acts as guarantor for the debts that passed to the successor company on the partial division or the spin-off, up to the amount of its equity shown in the opening balance sheet (Section 258). The successor company acts as guarantor for the debts that remained with the company being divided, jointly and severally with the other successor companies, up to the amount of the valuation of the business assets that were to pass to it under the expert report; where no expert report is prepared, the change in its equity is decisive (Section 257).
Sale of part of an enterprise: the contractual route
The third route does without a transformation. The rules on the purchase of an enterprise apply mutatis mutandis to the sale of a part of an enterprise forming a separate organisational unit (Section 2183 of Act No. 89/2012 Sb.). The buyer acquires everything belonging to that unit as a whole, and it remains a purchase even where the parties exclude an individual item without the unit thereby losing the character of an enterprise (Section 2175(1)). As regards debts, the Czech rules protect the buyer against unknown liabilities: it assumes only those of whose existence it knew or must at least reasonably have expected, and if a creditor did not consent to the assumption of the debt, the seller acts as guarantor for its performance (Section 2177(1)). The Slovak Commercial Code does not require the creditor’s consent for an obligation to pass, and the seller acts as guarantor for the obligations transferred (Section 477(3) of Act No. 513/1991 Coll.).
The Czech Act has a special rule on the moment at which title passes:
Where the buyer is entered in a public register, it acquires title to the enterprise as a whole upon publication of the information that it has deposited the document evidencing the purchase of the enterprise in the collection of deeds under other legislation.
— Section 2180(1) of Act No. 89/2012 Sb. (unofficial English translation)
This is without prejudice to the duty to record rights to individual assets under other legislation, for example in the land register (Section 2180(3) of the Czech Civil Code). A transfer of an enterprise, or of such a part of the business assets as would mean a substantial change in the actual business activity, must be approved by the general meeting, in a limited liability company and in a joint-stock company alike (Section 190(2)(i) and Section 421(2)(m) of Act No. 90/2012 Sb.). The purchase of an enterprise is regarded as a transfer of the employer’s activity (Section 2175(2)), so employees pass under Section 338 of the Czech Labour Code; the information duties and the employee’s right to give notice are described in the question on do employees pass to the buyer automatically. The Slovak Commercial Code uses the same concept of a separate organisational unit; how the Slovak Supreme Court interprets it is summarised in the question on sale of a division: part of an enterprise or merely assets.
Which route to choose
Where the buyer is to receive a separate company with a single division and the seller wants to run the process itself, a spin-off followed by a sale of the interest tends to be the most direct. Where the shareholders are parting ways, a partial division makes sense. A sale of part of an enterprise tends to be quicker, because the project, its publication and registration of the transformation fall away, but it requires a separate organisational unit and the buyer assumes with it the debts of which it knew or must have known. Each route has different tax consequences, so we compare them together with your tax adviser.
We handle the separation of part of a Czech or a Slovak company as part of our carve-out, sale of part of a business service, and transformations as a whole as part of mergers and acquisitions. The first step is to arrange an initial consultation at which we compare all three routes for your case.
This article provides general legal information as at 26 September 2026. It does not constitute legal services or advice on your specific matter. Laws change and the details of your situation may differ. Check the appropriate course of action or contact us before making a decision.
