Important information on the mandatory changes regarding companies in Hungary

Corporate 2015-12-04

The time limit set forth by the regulations of legislation that brought into power the new Civil Code of Hungary is rapidly approaching. Based on which companies must synchronize their constituting document with the regulations of the new Civil Code not later than the 15^th of March 2016.

One of the cornerstones of the new regulation is raising the statutory share capital which has been set formerly to a minimum value of 500.000,- HUF value, but this value has been increased to the amount of 3.000.000,- HUF capital minimum.

We would like to point out, that in case the given deadline expires without complying with the above mentioned obligation a fine may be imposed on the defaulting companies, as well as legal supervision may be initiated – according to the choice of the court of company registration. In light of the practice of recent years, there is no high change of such actions to be taken place.

As the deadline approaches, it is expected that many companies would wish to raise their statutory capital in order to meet the requirements of the legislation in force. Nevertheless, that does not mean that the capital shall be kept at the bank account – sufficient to provide the capital sum (e.g. pay in) to the bank account of the company, also it is a possibility to provide non-pecuniary contribution instead of cash provision.

Thus, according to the above, the capital shall be increased if it does not reach the minimum amount required by law, i.e.. HUF 3.000.000. Resulting, that the capital increase may be carried out by cash and non-cash contribution as well. The fulfilment of financial contributions may be met by transferring the amount to the account of the company or by paying in cash to the company. In case of non-cash contributions the ownership of the movable or immovable item or property rights shall be transferred by the members to the company. As a general rule, the value of non-cash contributions are estimated by the actual member and acknowledged by the company.

Raising the capital may not be the only liability of the company, because all the companies that have the minimum capital defined by the law, but their articles of association have not yet been modified in compliance with the new Civil Code, the necessary amendments shall also be executed in the company documents.

Having regard to the mandatory nature of these required changes the application at the court of registry may be executed without payment of duty fee and publication charges in all cases, where the relevant decision includes changes only to achieve consistency with the provisions of the new Civil Code.

However, we highlight the fact that duty fee and publication charges are payable according to the ordinary regulations in all cases where changes other than the mandatory are made (eg. entry of new members, registry of a new seat etc.)

In case you wish to request the services of our Office in regards of the mandatory corporate changes, we kindly ask you to notify us as soon as possible.

We would like to inform our esteemed Clients that requests arriving until the middle of February 2016 shall be charged according to the our usual favourable fee, however for the applications received afterwards – due to the approaching deadline and the foreseeable high workload – we shall fulfil such requests by charging an extra fee for urgency.

If you are in need of legal help in connection with the mandatory changes or if you may have any questions regarding the above feel free to contact our Office with confidence!

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