RSSThe Companies Act 1997
The powers and objects of a Hungarian company are contained within the Memorandum of Association and have to be specific. Should a Hungarian Company wish to diversify in to another field of activity, such diversification should be ratified at a Meeting of the Members then the Regional Company Registration Court should be notified.
A company is incorporated in 5-6 days provided the necessary documents from shareholders are obtained. Formal registration is normally complete in 30 days but the company can start trading after filing the documents with the Company Registry and registering at the Internal Revenue.
Company Formation
Registration in Hungary is a 4-stage process, which is as follows:
1. Hire a lawyer to represent the company and prepare the legal documents. This takes 1 to 2 days and costs from 100,000 HUF.
2. Pay at least 50% of the subscribed capital into the company's bank account. This takes a day.
3. Register with the Registration Court and obtain a certificate. This takes 2 to 3 days and costs approximately 15,000 HUF.
4. Register for social security, taking one day.
Registering a corporation in Hungary
The following details are necessary in order to register a corporation:
• A trade license
• Documents of incorporation
• Company name and the address of its registered office(s)
• Location of the company's activities
• Nature of the company's activities
• Form of incorporation
• Approval for foreign workers
When you register a company in Hungary, it immediately becomes a member of the local Chamber of Commerce.
The company is required to register with the following associations once the documents above have been submitted:
• The Central Office of Statistics (KSH)
• National Income Tax (APEH)
• Regional Income Tax
• The (Regional) Court of Registration
• The Institute of National Insurance
You are able to incorporate a business in Hungary in one of the following forms:
• General Partnership (KKT must be added after the name of the Partnership). In any joint undertakings, all the partners accept/have unlimited liability. According to Hungarian Law, a partnership of any kind is not a separate legal entity.
• Limited Partnership (BT must be added after the name of the Partnership). At least one of the general partners has unlimited liability, the other partners only have limited liability. Legally, the general partner can be a limited liability company.
• A partnership, general or limited, is not permitted to be a partner with unlimited liability in any other partnership.
• Joint Stock Company (RT must be added after the name of the Company). It may be a private or public company. A joint stock company can have 1 shareholder, but the board of directors must have a minimum of 3 members and a maximum of 11 members. The minimum share capital required is HUF 20 million, and either HUF 10 million or 30% of the capital (whichever amount is higher) must be paid in cash.
• The Companies Law states that banks, insurance companies and investment corporations must be incorporated as joint stock companies.
• Limited Company (KFT must be added after the name of the Company). A company under the classification of KFT prohibits the public to subscribe to any shares, and the shareholders have limited liability. The minimum required equity must be above HUF 3 million, and a minimum of HUF 1 million or at least 30% of the total capital (whichever amount is higher) must be paid in cash. Each shareholder is required to have a minimum share capital of HUF 100,000.
• It is necessary for a Limited Company with a single shareholder or a company with a share capital above HUF 50 million to submit audited accounts.
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