In its resolution of 25 August 2025, ref. no. 27 Cdo 1368/2024, the Supreme Court confirmed that the Czech regulation on the Register of Beneficial Owners contravenes European Union law. The Supreme Court followed the conclusions of the Court of Justice of the EU from 2022, which held that the blanket disclosure of personal data of beneficial owners to the general public constitutes a disproportionate interference with their right to respect for private and family life, as well as their right to the protection of personal data, guaranteed by the Charter of Fundamental Rights of the European Union.

The Supreme Court emphasised that the legislature has placed the registering entities in a deadlock by failing to align Czech legislation with EU law. On the one hand, the law obliges registering entities to enter data on their beneficial owners into the register and keep it up to date; on the other hand, complying with this obligation results in a violation of the beneficial owners' rights due to the subsequent publication of their personal data.

According to the Supreme Court, such a situation, caused by the legislature's inaction, should not disadvantage registering entities or their beneficial owners. Until Czech rules on the disclosure of personal data are brought into conformity with EU law, the state cannot enforce the notification obligation against registering entities.

The very next day, in resolution ref. no. 27 Cdo 1548/2024, the Supreme Court clarified that, due to the same inconsistency with EU law, the Czech statutory provision on suspending voting rights at a company's general meeting cannot be applied if the company has not registered its beneficial owners.

In light of both Supreme Court decisions, it can be concluded that while the statutory notification obligation is not directly affected, it cannot currently be effectively enforced against registering entities. Nevertheless, this situation is clearly only temporary, and registering entities and beneficial owners should continue to exercise caution. Rather than opting not to register or even deleting data from the register, it is advisable to apply for restricted access to the information.

Authors: Jan Koprnicky, Lenka Dvorakova