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News > Press Releases 2008 > Complaint about the fine for unlawful business activity

Complaint about the fine for unlawful business activity

06. 11. 2008

Fine for unlawful business activity

A complainant requested help with respect to sanction proceedings conducted by the trade licensing office of the Brno Municipal Office. The authority claimed that the complainant was actively conducting a licensed trade of “registry keeping” without a trade license, whereby she allegedly performed an unlawful business activity. The activity consists in the keeping of files received earlier, at a time the complainant had a trade license obtained pursuant to the previous legislation. Given that the state subsequently changed the conditions for the conduct of the aforementioned trade and the complainant failed to fulfil the legal conditions, she lacked authorisation for continuing to perform the trade and thus performed an unlawful business activity, in the opinion of the authority.

As opposed to the trade licensing office, the deputy opined that although the complainant’s activity involved some elements of a trade, unlawful business activity was not the case, primarily given the specific manner of caring for the files resulting from the obligations in the area of archiving. As a result of the aforementioned obligations (given the periods applicable to the destruction of documents), agreements on the custody of documents must be concluded for long periods of time. This in itself is an exceptional situation (compared with the activities of other traders) that places considerable demands on the long-term business plan of each trader. Although the rules for conducting business changed in 2005, the reality of entrepreneur relationships had to be respected as there were agreements concluded earlier whose fulfilment had to be ensured with regard to private law. Certain rights and obligations resulting from the agreements on the keeping of documents survive until now (and will continue to survive). This very fact cannot be labelled, without further consideration, as the performance of trade in the sense of the trade licensing law. Given that even the best business plan could not foresee that the “rules of the game” would be changed by the state in the course of events, the Deputy concluded that a fair interpretation of the Trade Licensing Act is that the activities performed by the complainant are not a trade in the sense of the Trade Licensing Act at all and, therefore, unlawful business activity cannot be the case. The deputy simultaneously stressed that the complainant has not been receiving new files into custody since 2005 and she only keeps the existing files for the rest of the time until expiry of the destruction deadlines. The deputy currently awaits a statement of the authority on her observations.

Fine for unlawful business activity

A complainant requested help with respect to sanction proceedings conducted by the trade licensing office of the Brno Municipal Office. The authority claimed that the complainant was actively conducting a licensed trade of “registry keeping” without a trade license, whereby she allegedly performed an unlawful business activity. The activity consists in the keeping of files received earlier, at a time the complainant had a trade license obtained pursuant to the previous legislation. Given that the state subsequently changed the conditions for the conduct of the aforementioned trade and the complainant failed to fulfil the legal conditions, she lacked authorisation for continuing to perform the trade and thus performed an unlawful business activity, in the opinion of the authority.

As opposed to the trade licensing office, the deputy opined that although the complainant’s activity involved some elements of a trade, unlawful business activity was not the case, primarily given the specific manner of caring for the files resulting from the obligations in the area of archiving. As a result of the aforementioned obligations (given the periods applicable to the destruction of documents), agreements on the custody of documents must be concluded for long periods of time. This in itself is an exceptional situation (compared with the activities of other traders) that places considerable demands on the long-term business plan of each trader. Although the rules for conducting business changed in 2005, the reality of entrepreneur relationships had to be respected as there were agreements concluded earlier whose fulfilment had to be ensured with regard to private law. Certain rights and obligations resulting from the agreements on the keeping of documents survive until now (and will continue to survive). This very fact cannot be labelled, without further consideration, as the performance of trade in the sense of the trade licensing law. Given that even the best business plan could not foresee that the “rules of the game” would be changed by the state in the course of events, the Deputy concluded that a fair interpretation of the Trade Licensing Act is that the activities performed by the complainant are not a trade in the sense of the Trade Licensing Act at all and, therefore, unlawful business activity cannot be the case. The deputy simultaneously stressed that the complainant has not been receiving new files into custody since 2005 and she only keeps the existing files for the rest of the time until expiry of the destruction deadlines. The deputy currently awaits a statement of the authority on her observations.

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