In May, we are moving on from court proceedings to the principle of material publicity of the Commercial Register and the protection of third parties acting in good faith. In its judgment 27 Cdo 1812/2026, the Supreme Court addressed the so-called “adverse aspect” of material publicity, that is, the principle under which a business corporation is bound vis-à-vis third parties acting in good faith even by registered information that does not reflect reality.
In the referenced case, enforcement proceedings were conducted on the basis of a notarial deed with a direct enforceability clause, in which a debt in excess of CZK 88 million was recognised as being owed by the company. The notarial deed was signed by a person who, at the time the deed was drawn up, was registered in the Commercial Register as the director of the debtor company. However, the question then arose as to whether that person had in fact been a director, as their position supposedly ceased on the very same day it was created, whilst erasure from the Commercial Register did not take place until later.
The lower courts concluded that a notarial deed is not a substantively enforceable title for enforcement, as the person acting on behalf of the company was not authorised to so act. They held that the entry in the Commercial Register alone was not sufficient.
The Supreme Court rejected this conclusion and quashed the decisions of both courts, emphasising that the courts should first have considered whether the claimant had acted in good faith relying on the entry in the Commercial Register. It was precisely this question that proved crucial in assessing the matter. Indeed, if a third party reasonably relies on the information entered in the public register, the company cannot simply object to the detriment of that third party that the entry did not reflect reality.
The key significance of the ruling lies in the fact that the Supreme Court did not limit the protection of good faith solely to a person who acts in a legal capacity in the narrower sense. Instead, it concluded that this protection also applies to a person who is the addressee of a unilateral juridical act on the basis of which that person is acquiring a right. Such a person, too, is therefore a third party whose reliance on an entry in the public register deserves protection.
The ruling thus clearly confirms that an entry in the Commercial Register has a strong protective effect in legal relations. The main purpose here is to ensure legal certainty. Indeed, third parties must be able to rely on the information entered in the public register without running the risk that the actual state of affairs was different and that will work to their disadvantage.
In practice, this ruling is particularly significant in situations where a dispute subsequently arises as to who was actually a member of the statutory body, who was authorised to act on behalf of the company, or whether the entry in the register reflected the actual situation. With this ruling, the Supreme Court has once again confirmed that, in such cases, the protection of third parties’ good faith in entries in the public register will be of crucial importance.
