The procedure of company formation in Hungary

SPECIFIC FORMS OF BUSINESS ASSOCIATIONS IN HUNGARY

By virtue of the memorandum of association for the establishment of a general partnership, the members of the partnership shall undertake to jointly engage in business operations with unlimited and joint and several liability, and to make available to the partnership the capital contribution necessary for such activities.

By virtue of the memorandum of association for the establishment of a limited partnership, the members of the partnership shall undertake to jointly engage in business operations, where the liability of at least one member (general partner) for the obligations not covered by the assets of the partnership is unlimited, and is joint and several with all other general partners, while at least one other member (limited partner) is only obliged to provide the capital contribution undertaken in the memorandum of association, and, with the exceptions set out by the law, is not liable for the obligations of the partnership.

Private limited-liability companies are business associations founded with an initial capital (subscribed capital) consisting of capital contributions of a pre-determined amount, in the case of which the liability of members to the company extends only to the provision of their capital contributions, and to other possible contributions as set forth in the memorandum of association. With the exceptions set out by the law, members shall not be liable for the liabilities of the company.

Limited companies are business associations founded with a share capital (subscribed capital) consisting of shares of a pre-determined number and face value, in the case of which the obligation of members (shareholders) to the public limited company extends to the provision of the face value or the issue price of shares. Limited companies may be established privately or open to the public and, consequently, they may operate in the form of public or private limited companies. ‘Public limited company’ shall mean any company whose shares (all or some) are traded publicly in accordance with the conditions set out in the act governing securities. ‘Private limited company’ shall mean a company whose shares are not offered to the public.

FORMATION PROCEDURE

1. Drafting the necessary documents on the ground of the information given by the client former per e-mail or at a personal meeting.

2. Undersigning the contract (deed of foundation) and all other necessary documents.

3. The lawyer sends the documents in an electronic mail to the registry court. If the company needs an authorization for the formation, the documents can only be sent after having it.

4. The registry court sends its decision within a few days. The company gets a registration number and a tax number.

5. After the registration the company has to open a bank account and pay the initial capital within 8 days.