Act No. 167 / 1950 Coll.

Law on municipal enterprises

Valid Effective from 01.01.1951
167.
Law
of 20 December 1950
on municipal enterprises.
The National Assembly of the Czechoslovak Republic decided on the following Act:

Oddíl I.

Community enterprises and their mission.
§ 1.
Public undertakings are similar to national undertakings. They are focused on entrepreneurship of the importance of local (regional) and are operated under the leadership and supervision of the state primarily carried out by national committees. Through national committees, they are closely associated with people, serve their needs in line with and under the control of national interests.
§ 2.
In communal companies, collective workers participate in the cooperative cooperation of the construction of socialism. The mission of communal enterprises is to contribute, according to a single economic plan, to the satisfaction of the living needs of the population, to the unveiling and use of local resources, to the rise of national wealth, to raising material and cultural levels, and to strengthening the power of the working people. In doing so, they work with other parts of the socialist sector.

Oddíl II.

Establishment of municipal enterprises and their legal circumstances.
§ 3.
Establishment of a municipal enterprise.
(1) Community undertakings are set up by national committees according to local (regional) needs in accordance with the single economic plan.
(2) The establishment of a communal undertaking is the responsibility of the national committee under whose immediate management and supervision the undertaking will be operated (in the next: the "leading national committee").
(3) The head of the national committee shall determine the registered office, name and field of business of the municipal undertaking.
§ 4.
Regional municipal enterprises and participation of other national committees.
(1) As a general rule, the activity of a municipal enterprise is aimed at meeting the needs of the population in the district of the head of the national committee (local [municipal, urban], district and regional).
(2) Where the operation of a communal undertaking has an increased impact on the interests of the population of a wider area than that of the head of the national committee, the leading national committee may take on the advisory and assistance participation of national committees in that area (regional municipal enterprise).
(3) In order for the activities of a regional municipal undertaking referred to in paragraph 2 to go beyond the county boundaries, the agreement of the Regional National Committee should be required; The agreement of the Ministry of the Interior is needed to cross the border.
(4) In the case of a municipal district or county undertaking whose operation affects an increased proportion of the interests of the population of certain municipalities or districts in the district of the head of the national committee, subordinate national committees may be recruited for advisory and auxiliary participation.
§ 5.
Joint communal enterprises.
Communal enterprises are generally set up as enterprises of one national committee (individual municipal enterprises). However, if it is economically efficient, two or more national committees may, exceptionally, form a joint communal undertaking. Such an undertaking is then operated under their joint management and supervision. One of them, as determined by the Agreement, in the case of the Supervisory National Committee (Office), shall be the Head of the National Committee and shall act on their behalf with the agreement of the Associated National Committees.
§ 6.
Legal personality.
Community undertakings are separate legal entities.
§ 7.
National property in the administration of a municipal enterprise.
(1) The State is the owner of the assets of the municipal enterprise. The municipality is entrusted with such property in administration. In matters relating to this property, the municipal undertaking is acting in its own name.
(2) In the land books, official registers or lists maintained under Czechoslovak law, the owner of the property or the right held by the municipal undertaking is registered, with the designation of that undertaking. The entries in the land books, official registers and lists of assets incorporated into a municipal undertaking shall be made on a proposal from the undertaking on the basis of documents issued with an incorporation.
(3) The State entrusts the municipal undertaking with the national assets necessary to carry out its mission, in particular:
1. the integration of national assets entrusted to the administration of the national committee under the general rules;
2. the incorporation of the national assets transferred (allocated) for that purpose in accordance with the asset law confiscated, nationalised or acquired for land reform purposes;
3. the incorporation of other national assets, in particular assets, which are at the same time excluded from another municipal undertaking or from a national undertaking under the rules in force.
(4) The funds to finance investments and operations are entrusted by the State to the municipality through the National Economy Fund, after the Housing Fund, in accordance with the rules on this.
§ 8.
Inclusion of national assets entrusted to the management of the Head of the National Committee.
(1) The national assets entrusted to the management of the Head of the National Committee shall be integrated into the municipal undertaking by the resolution of that National Committee.
(2) If the Head of the National Committee enters a municipal enterprise with the assets entrusted to it in administration, it shall also transfer to it the liabilities pertaining to such assets. These liabilities shall be transferred to the undertaking on the date of receipt of the assets. With the transfer of liabilities, the existing debtor shall be exempt from them. The creditor is not required to be granted.
(3) Confirmation of the transfer of commitments to a municipal undertaking as referred to in paragraph 2 shall be issued by the leading national committee.
§ 9.
Inclusion of nationalized property.
(1) The size of the nationalisation of the assets left to be incorporated into a communal enterprise will be decided by the Minister of Interior, in agreement with the Minister or the Regional National Committee, in accordance with the regulations on nationalisation and taking into account the needs of the operation of the communal enterprise, in agreement with the Minister of Internal Affairs or the Regional National Committee as authorised by them.
(2) In determining the compensation for the nationalised assets incorporated into a municipal undertaking to be granted by the Fund for the National Economy, the relevant status of the assets shall be that of the municipal undertaking on the day on which it is taken over and the liability to it on that date. In agreement with the Minister of the Interior and with the Minister in question, the Minister for Finance will decide on the amount of the compensation and the payment arrangements.
(3) The nationalisation provisions provide for the entry of undertakings by a municipal undertaking to which the nationalised property has been incorporated, under which conditions a municipal undertaking may request the withdrawal of an undertaking or its appropriate adjustment, as provided for in the commitments of an overindebted national undertaking whose assets have been incorporated into a municipal undertaking, and under which conditions a municipal undertaking may oppose the legal conduct of an earlier owner of a nationalised enterprise.
§ 10.
Name.
(1) The name of the municipal undertaking includes the designation "municipal enterprise." Only undertakings organised under this law may use this designation. The name shall indicate either in an appropriate manner whether it is a local, regional (central, uniform) or regional national committee or a regional or joint undertaking. If possible, be indicated in the title by the business field.
(2) An existing company of an undertaking whose assets have been largely incorporated into a municipal undertaking or part of that undertaking may be incorporated into the name of a municipal undertaking without authorisation otherwise required under the applicable rules. Where an existing owner operates another undertaking, his company or name shall be adjusted accordingly in order to distinguish clearly from the name of the municipal undertaking.
§ 11.
Activity of the municipal enterprise and business plan.
(1) The activity of a municipal undertaking is determined by its approved business plan.
(2) The municipal enterprise business plan is part of a single economic plan in its content. The business plan shall be subject to approval. The authority to which the business plan is to be approved shall determine and specify the details by the Ministry of the Interior Directives in agreement with the State Office of Planning and the Ministry of Finance.
(3) The communal undertaking does not need any authorisation that would otherwise be necessary under the rules of trade law or other law to carry out its activities under an approved business plan. However, communal undertakings are subject to provisions on the approval of establishments as well as other regulations on the protection of the life and health of workers, on general safety and on the education of workers.
§ 12.
Registration.
(1) The company is registered in the company register. In the registration notice, the undertaking shall refer to the decision by which it was established and inform the court:
(a) the name and registered office;
(b) the Head of the National Committee, and if the communal enterprise is a joint joint undertaking, including associated national committees;
(c) the date on which the municipal enterprise was established;
(d) who represents and signs for the undertaking.
(2) The provisions of paragraph 1 shall also apply mutatis mutandis to the reporting of changes to these facts for registration in the company register.
§ 13.
Satisfaction of claims.
(1) The assets held by the municipal undertaking cannot be claimed to satisfy the claims of the State.
(2) Only the assets entrusted to it in the administration which are not intended to be used permanently by the undertaking can be satisfied for the liabilities of the municipal undertaking (§ 14 (1)).
§ 14.
Embezzlement and encumbrance.
(1) The communal undertaking must not dispose of parts of the assets entrusted to its administration which are intended to be used permanently. Negotiations that are contrary to this prohibition are legally ineffective.
(2) Third parties may not acquire liens or other rights in kind in respect of the assets referred to in paragraph 1.
(3) Exemptions from the prohibition on the disposal and encumbrance of assets referred to in paragraphs 1 and 2 may be granted by the authorities of the national management and supervision. Details are provided in the Statute (§ 50).
§ 15.
Property depuration.
(1) The lien rights attached to the assets referred to in Article 14 (1) shall cease to exist without compensation on the date of the entry into force of this Act and on the next day on which such property is incorporated into a municipal undertaking or otherwise acquired by a municipal undertaking. The Library Court will delete them on a proposal from a municipal enterprise, referring to this law. The liabilities for which the lien was established remain unaffected.
(2) Under which conditions other rights in rem in respect of the assets referred to in Paragraph 14 (1) shall cease to exist, the Government shall amend the Regulation.
(3) The termination of the lien referred to in paragraph 1 shall not take place in cases where a municipal undertaking has acquired assets other than national assets on which the lien is also not taken over at the same time, and in cases where the government authorises an exemption on a proposal from the Minister of the Interior made in agreement with the Minister of Finance.

Oddíl III.

Organisation and management of a municipal enterprise.
§ 16.
General provision.
(1) The organisation of a municipal enterprise must be adapted to the principles of the socialist economy and must ensure perfect cooperation and enable the planned tasks to be carried out successfully.
(2) In a municipal enterprise, each person is personally responsible for the performance of the tasks incumbent upon him.
(3) The management of a municipal undertaking and parts thereof is always the responsibility of one manager who has separate decision-making powers.
§ 17.
Keeper.
(1) The head of the municipal undertaking shall be the manager of, representing and acting on behalf of the undertaking.
(2) The administrator shall decide on the matters of a municipal undertaking separately if, under specific rules, he does not need the consent or approval of a superior body.
(3) The administrator is directly subordinate to the Head of the National Committee and is responsible for the performance of his duties. The Head of the National Committee may require the administrator to seek prior approval of certain measures.
(4) In communal undertakings for which a Joint Directorate is established (Section VI), the subordination of the administrator is governed by § 31.
(5) The administrator is appointed and dismissed by the Head of the National Committee following the observations of the Regional Inspectorate of Municipal Enterprises (§ 37) and the hearing of the Regional Authority of the Single Trade Union Organisation.
(6) The administrator can only be a Czechoslovak citizen devoted to the People's Democratic Order, civil and moral integrity and capable of performing this function.
(7) The administrator shall not engage in employment, function or activity contrary to the interests of the municipal undertaking.
(8) The administrator will promise to the Chairman of the Head of the National Committee to carry out his duties conscientiously in accordance with the interests of the State. They will also confirm the promise in writing. The day of the promise shall be the day on which the administrator takes up his duties and becomes an employee of a municipal undertaking, if not previously.
(9) The administrator may give up his post. Surrender becomes effective once the head of the National Committee has taken them to knowledge.
(10) The administrator's employment shall cease if the Head of the National Committee has not left it in force by withdrawing from office or giving up the post which has been noted. If the employment relationship has not been terminated in circumstances for which otherwise the employment relationship could be terminated prematurely, the salary shall be payable to the administrator for a period corresponding to the period of notice laid down in the general rules.
(11) The appointment and dismissal of the administrator shall not be subject to rules on the co-operation of the race council in the recruitment and assignment of staff to posts and the dismissal of staff; there is also no need for the official consent otherwise required in the negotiation and dissolution of employment.
§ 18.
Representation of the administrator.
(1) The Head of the National Committee shall appoint one or more representatives from among the staff of the municipal undertaking, on the basis of a proposal from the administrator, who, in the absence or busy of the administrator, shall represent him in full in the order laid down. The provisions of the administrator's representative and his appeal shall not apply to the rules on the co-operation of the race council in the assignment of staff to posts and the dismissal of staff.
(2) The AIFM may, under its jurisdiction, authorise other persons to act on its behalf to a limited and explicit extent. Such authorisation shall be granted, in particular, to staff managing the individual organisational component of a municipal undertaking (establishments, trade unions, establishments, etc.).
§ 20.
Signing for the business.
(1) The communal undertaking shall notify its administrator and his representative for registration in the company register. Such persons shall be signed before a court or shall submit their signature in a certified form.
(2) The signature of the undertaking shall be such that the manager (representative) shall attach his signature to the printed or written name of the undertaking.
§ 21.
Liability for damage.
The administrator and the persons who represent or procure the municipal undertaking shall be liable for the damage caused to the undertaking. The claims for damages shall be decided by the courts.
§ 22.
Citizenship participation.
The communal enterprise may be organised by conferring certain tasks on civil servants. The Home Office shall adapt the details by means of directives.

Oddíl IV.

Staff.
§ 23.
Work and wage ratios.
(1) The employment and wage ratios of employees of municipal enterprises are governed by the rules applicable to employees covered by the Act on State Labour Policy.
(2) Unless otherwise provided for in that law or regulation, it shall recruit staff and shall be assigned to posts by the manager of a municipal undertaking after consulting the race council. Their release requires the consent of that authority.

Oddíl V.

Financial management.
§ 26.
The communal undertaking provides its products and performs work and services in return for payment in accordance with general pricing rules, unless otherwise specified under the special rules. For typical payments it can issue a tariff.
§ 27.
(1) The communal undertaking is obliged to operate according to the budget, which is the basis of the financial plan forming part of its business plan.
(2) The accounts of a municipal undertaking are subject to approval. The authority to which the accounts are to be approved shall determine and specify the details by the Ministry of the Interior Directives in agreement with the Ministry of Finance, the State Office of Planning and the Supreme Accounting Audit Office.
§ 28.
Specific rules apply to the financial management of municipal enterprises.

Oddíl VI.

Directorate of Municipal Enterprises.
§ 29.
If the national committee has more than one large-scale municipal enterprise, it may establish a common Directorate for them, with the agreement of the Ministry of the Interior.
§ 30.
(1) The head of the Directorate is the Director of Municipal Enterprises. It is adequately covered by the provision concerning the trustee of a municipal undertaking with the exception of § 20 (1).
(2) Directorate staff are assessed as employees of municipal undertakings.
§ 31.
The managers of municipal undertakings for which a Joint Directorate is established shall be subordinate to the Director. They shall be subject to senior management and supervision through the Director.
§ 32.
(1) The activities of the Directorate are aimed at meeting the plans of subordinate municipal undertakings. They follow the plan. Part of the plan is the budget under which the Directorate is obliged to manage. The Head of National Committee shall discuss the plan and accounts of the Directorate and shall be approved by the Supervisory National Committee (Office).
(2) The calculation costs of the Directorate, not covered by its budget revenue, shall be borne by the relevant municipal undertakings on the basis of a schedule drawn up by the Head of the National Committee.
(3) If it is effective in the interests of the tasks assigned to the Directorate, the State may also entrust it to the administration.
(4) The provisions on municipal undertakings contained in § 7 (1) to (3), § 8 and § 9, § 11 (3), § 13 to 16, § 18, 21 and 23, § 34 to 36, § 37 (1), § 42, § 43 (2) and (3), § 44 to 46, § 47 (1) and (3), § 48 (1), (2) and (4) and § 49, 52, 53 and 56 apply mutatis mutandis to the Directorate. The provisions of other regulations applicable to municipal undertakings shall also apply mutatis mutandis to the Directorate, unless the Government provides for a derogation by regulation.
(5) In an agreement with the Minister of the Interior, the Minister of Finance provides for a regulation which provides that the provisions of Act No. 104 / 1950 Coll., on the financing of national and municipal enterprises, apply mutatis mutandis to the Directorate of Municipal Enterprises and, where appropriate, derogations from the provisions of the same Act.
§ 33.
The Directorate of Municipal Enterprises, which will set up a central national committee of the capital of Prague, may delegate certain tasks to the Ministry of the Interior to the Chief Executive (§ 37).

Oddíl VII.

Top management and state supervision.
§ 34.
Initial provision.
(1) The communal undertakings are subordinate to the management and supervision of the State.
(2) A municipal undertaking cannot appeal against the measures taken by the authorities of the management and supervision of the State.
§ 35.
The immediate top line and surveillance.
The immediate top management and supervision of municipal undertakings shall be carried out by the Head of National Committee, in particular by setting them up, determining the focus of their activities, changing their allocation or repealing them; it shall include and transfer to national assets the liabilities of which it shall exempt from the assets and liabilities; appoint and withdraw the AIFM and give instructions or reserve prior consent; discuss the business plan and accounts; It shall ensure that municipal undertakings properly manage and carry out their tasks.
§ 36.
Internal surveillance.
(1) The management and supervision of municipal enterprises in the higher seat (instance supervision) are carried out by national committees superior to the head of the national committee (immediate supervision, after the higher supervision national committee) and in the highest seat by the Ministry of Interior. It is also for the national supervisory authorities to ensure that the heads of national committees perform the tasks assigned to them.
(2) The Supervisory National Committee may instruct the Head of the National Committee and reserve that certain measures require its approval. It may amend or repeal the measures of the Head of the National Committee or, in its knowledge, act by its own action. The authorisation belonging to the immediate supervising national committee is also for the higher supervisory national committee and the Ministry of Interior.
(3) The local jurisdiction of the monitoring national committee shall be without prejudice to the fact that national committees outside its jurisdiction are also admitted to advisory and auxiliary participation for a regional municipal undertaking.
(4) The Regional National Committees shall ensure that the network of municipal enterprises in the region and their activities comply with the single economic plan. The Ministry of the Interior directs these tasks with a national perspective.
(5) The actions of the Head of the National Committee, the implementation of which will require a change in the content or scope of the tasks entrusted to the municipal undertaking by the implementation plan of the Single Economic Plan, always require the agreement of the Supervisory National Committee (Office). Before giving such consent, the monitoring national committee shall discuss the matter with the relevant planning site.
(6) The resolution of the Head of the National Committee which incorporates or transmits an undertaking into a municipal undertaking or exempts such assets or obligations from a municipal undertaking requires the approval of the monitoring national committee (office) which approves the municipal plan.
(7) The Head of the National Committee shall be heard before any measure taken by the Supervisory National Committee (Office) unless there is a danger of delay.
Senior management. Inspectors of municipal enterprises.
§ 37.
(1) The tasks of the management and supervision of the State over municipal enterprises include the unification and direction of their business activities, the care of their effective organisation and the professional management of operations and the care of their material supplies (the professional management).
(2) The Regional Inspectorate of Communal Enterprises as the authorities of the Regional National Committees and the Central Inspectorate of Communal Enterprises as the authority of the Ministry of the Interior and Regional Inspectorate of Municipal Enterprises as the authority of the Home Office shall be established for the performance of the senior management of municipal enterprises. The guidelines and guidelines of inspectors in matters of senior management of municipal enterprises shall be binding on subordinate national committees and on the managers of municipal undertakings.
(3) For the district of the central national committee of the capital city of Prague, the inspectorate of municipal enterprises is not established.
§ 38.
(1) The inspector of municipal undertakings is the head of the Inspectorate. The Central (Regional) Inspector shall be appointed and removed by the Minister of Interior; The Regional Inspector shall be appointed and withdrawn by the Regional National Committee.
(2) The provisions on managers of municipal undertakings apply mutatis mutandis to the inspector of municipal undertakings, with the exception of the provisions of Paragraph 20 (1).
§ 39.
(1) The activities of the Inspectorate shall be governed by a plan. Part of the plan is the budget according to which the inspector is obliged to manage. The Regional National Committee shall discuss the plan and accounts of the Regional Inspectorate and shall be approved by the Ministry of the Interior; The Ministry of the Interior also approves the plan and accounts of the Central (Regional) Inspectorate.
(2) If it is necessary in the interests of the tasks assigned to the inspector, the State may also entrust him to the administration.
(3) The provisions on municipal undertakings contained in § 7 (1) to (3), § 8 and § 9, § 11 (3), § 13 to 16, § 18, 21, 23, 28, 34 and 42, § 43 (2) and (3) and § 44, 45, 52, 53 and 56 apply mutatis mutandis to the inspectors. The provisions of other regulations applicable to municipal undertakings shall also apply mutatis mutandis to inspectors, unless the Government provides for a derogation by regulation. Where such provisions refer to the Head of the National Committee, they shall apply mutatis mutandis to the Regional Inspectorate of the relevant Regional National Committee and to the Central (Regional) Inspectorate of the Ministry of Interior.
§ 40.
Which tasks belong to the senior management of municipal enterprises, the Statute provides (§ 50); the details are laid down by the Ministry of the Interior by the Directives.
§ 41.
The staff of the Inspectorate shall be regarded as staff of municipal undertakings.

Oddíl VIII.

Changes in the assignment.
§ 42.
(1) The Head of the National Committee may remove the assets from the municipal undertaking and take measures in its own field of competence; in particular, it may include such assets in another of its municipal undertakings.
(2) The Head of the National Committee may exempt the undertaking from the municipal undertaking and delegate it to another of its municipal undertakings.
(3) The Minister of the Interior or, under his authority, the Regional National Committee may, mutatis mutandis, make changes to the allocation of municipal undertakings, even if they belong to different national committees, after transferring the municipal undertaking from one head of the National Committee to another, in accordance with the provisions of paragraphs 1 and 2.
§ 43.
(1) The Minister of the Interior may exclude a municipal undertaking from the organisation under this Act and dispose of it either in its own field of competence or, in agreement with the Minister responsible, submit it to the measure in accordance with the rules which it is competent to implement.
(2) The Minister of the Interior may exclude or transfer from the municipal undertaking assets or liabilities in his or her own field of competence or, in agreement with the Minister responsible, into his or her jurisdiction to take measures in his or her own field of competence.
(3) The Minister of the Interior may, in agreement with the Minister of Finance, delegate to the municipal undertaking liabilities belonging to national assets.
§ 44.
Before any change in the allocation of the municipal enterprise, the manager of the municipal enterprise must be heard.
§ 45.
(1) The transfer of liabilities pursuant to Articles 42 (2) and (3) and 43 (2) and (3) shall exempt the debtor from them. Such a transition does not require the authorisation of the creditor.
(2) A confirmation of the transfer of commitments to a municipal undertaking is issued by the Head of National Committee.

Oddíl IX.

The cancellation of a municipal enterprise.

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Regulation Information

CitationAct No. 167 / 1950 Coll., on Municipal Enterprises
Regulation Type-
Author-
CollectionCode of Laws
Date of Promulgation27.12.1950
Effective from01.01.1951
Effective until-
Status Valid
The regulation text is for informational purposes only.
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