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JOURNAL OF INTERDISCIPLINARY RESEARCH
from the registered capital of XYZ Corporation (Czech
Republic, 2012b). This shareholder thereby fails to meet
requirements under S. 365 (2) Act No. 90/2012 Sb. for exerting
the decisive influence in the controlled corporation XYZ.
Concerning this issue, BCA stipulates that to exert the decisive
influence of the shareholder, it is necessary (under S. 365 (2) No.
90/2012 Sb.) to own no less than 5% of the registered capital of
the corporation which equals to 60,000 CZK in this particular
case (Czech Republic, 2012b). In 201X, shareholder Z was in a
very specific position since he was a minority shareholder of
corporations XYZ although, at the same time, this person was
the Chairman of the Board on behalf of the controlled
corporation and, simultaneously, held a position of the corporate
agent of corporation ABC on behalf of the controlling party.
Throughout the examined period, though, marked fluctuations in
the number of shares held by individual shareholders occurred.
At a specific moment, shareholder Z owned only 1.3333% of
shares (namely 40,000 CZK); however, at the end of the period,
he again had 2% of shares. Shareholder Z and corporation ABC
saw the fluctuation of 0.667% of shares (namely 40,000 CZK)
that occurred between them. When examining the whole network
of the corporation including their contracting partners, mutual
contracts between seven corporations engaged in different
activities are to be dealt with. The remaining corporations will be
marked as X1 – X4. Nevertheless, activities of all these
corporations can be combined. The provision of advertising
areas by XYZ Corporation for remuneration from DEF
Advertising Corporation may be given as an example.
Fig. 1. The development of selected economic ratios of
corporation XYZ in 1996-2016
Source: www.justice.cz; Public register and the Collection of documents.
The development in Fig. 1 demonstrates the fluctuation in both –
performances and performance consumption of corporation
XYZ. The profit began to plunge after taxation after the
economic crisis in 2008.
For a more careful consideration of the development of the
situation of corporation XYZ, we can compare its performances
with an average annual degree of inflation which is depicted in
Fig. 2.
Fig 2. The comparison of performances of corporation XYZ and
year-on-year inflation (100% = 1996)
Source: www.justice.cz; Public register and the Collection of documents,
Czech Statistical Office.
In case a corporation flourishes, its performances should
annually increase by no less than the degree of inflation in the
specific year. The corporation responds to the inflation increase
by pushing up prices of its products and services (Irima, Stancu,
2013). Fig. 2 shows that performances of the corporation began
to plunge since 2010 and began to increase no less than 4 years
later.
Fig. 3 illustrates individual relations between the controlling and
controlled party and other minority owners.
Fig. 3. Relations between the members of the group of
companies
Source: Author’s own graphic interpretation.
4 Results
Having conducted the research, there was a certain deficiency in
the Report on relations for this particular model case. It is an
inaccurate identification of legal entities as (parties) controlling
and controlled. This is directly contrary to Act No. 90/2012 Sb.
The controlled corporation XYZ is controlled on the basis of
majority ownership of its shares by the ABC Corporation.
According to another research, it may be stated that s. 82 (2) (b -
d) Act No. 90/2012 Sb. has always been formally and correctly
fulfilled by XYZ. Only a different degree of accuracy may be
noted. In the period under review, there were minor fluctuations
in the number of held shares of the controlled corporation XYZ
between the controlling ABC Corporation and the minority
shareholder Z. Content deficiencies of the Report on relations to
be reproached involve a list of contracts. The list of contracts
does not include all contracts made between the controlling party
and the controlled party. For this reason, it is necessary to remark
that s. 82 (2) (e) of Act No. 90/2012 Sb. was not properly
fulfilled.
Yet, according to the information available, it may be claimed
that s. 82 (2) (a) Act No. 90/2012 Sb. was not sufficiently
fulfilled either, but it was not such a serious error that would
cause any injury to the controlled party or other member of the
group of companies. Act No. 90/2012 Sb. does not clearly
regulate the way in which the structure of controlling and
controlled parties is to be expressed in reports on relations. In
this case, however, the Report on relations contained a
combination of graphical and textual representation, with the
former being depicted as the first. Not all shareholders were
included in the graphical representation though as they were only
listed in the textual section below the graphical representation.
Judging from experience, it may be argued that on viewing the
graphical representation, shareholders can easily be omitted in
the textual part.
Further formal shortcoming was found while examining the list
of all contracts included in the Report on relations. It
encompassed two contracts that were classified as oral by the
controlling company and were not listed in the contracts.
Specifically, it was the rental of advertising space and of office
space. However, receivables from them were normally invoiced
to the controlled company. It was also found that several
contracts made in writing were not included in the Report on
relations. Apart from that, the existence of the contracts is
supported by accounting transactions of performance whose
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