Private Limited Company by Shares (Zrt)
Private Limited Companies (Zrt.) are business associations founded with a share capital consisting of shares of a pre-determined number and nominal value, where the obligation of shareholders to the company extends to the provision of funds covering the nominal value or the accounting par value of shares. The shares of the Zrt. are not listed on any stock exchange, shareholders and capital may not be solicited for the foundation by way of public invitation.
Local directors or employees are not required, third country nationals can be shareholders and managers with the same conditions as EU citizens.
The general and the simplified way of incorporation
Since 2006, in Hungary the procedure of incoporation is fully electronic and can be done online. The countersignature of an attorney or a notary is required to the deed of foundation and to the application, and the legal representation is mandatory during the whole process. The so called simplified way of incorporation means that the company shall be established by using a standard charter document, provided by the Companies Act. It results faster and cheaper registration process, but the same company as it can be registered also in the general way, when the shareholder(s) can use their own text in the articles. Contact us, to find out which way of incorporation would be the best for you.
Requirements to start the incorporation procedure
In the case of the shareholder shall be a natural individal person, we only need a passport copy or a european ID. If it's not shown on the document, the place of stay, the european national insurance number (if exists), and the mother's maiden name of the shareholder and manager(s) are necessary.
In the case of a legal entitiy a paper format extract of the company register would be required showing the name of the representative person. This document can not be older than 3 months. These documents must be apostilled in the source country and officialy translated in Hungary before the submisson. (The application can be only submitted once the translated original document is available.)
The presence of the representative person is also required in our office, or in front of a notary or the hungarian consulate near to you. The registration procedure can be done remotely by signing the documents in front of the consul. In this case we prepare the documents and send you by email. Contact us to set up an appointment in Budapest, or at the nearest hungarian consulate.
The fee of the registration process and all duties must be paid at the start. We accept cash, prior bank transfer, paypal, prior WU transfer and also any type of bank card payment.
The company’s capital
The sum total of the nominal value of all shares shall comprise the share capital that may not be less than five million forints. The amount of cash contributions at the time of foundation may not be less than thirty per cent of the share capital. The nominal value of shares may be determined as a percentage of the prevailing share capital of the company (capital stock). In that case only the percentage the share represents in the company capital shall be indicated on the share, whereas the amount of the share capital need not be shown.
Zrt. may be registered after
a) the founders who agreed to provide contributions in cash have paid at least twenty-five per cent of the nominal value or accounting par value of the shares which they have committed to subscribe for in the articles of association;
b) asset contributions have been made available to the company, with the exception if the value of such asset contributions is less than twenty-five per cent of the share capital. Shareholders shall pay up the nominal value or accounting par value of the shares to the limited company in full within one year from the date when the Zrt. is registered, and shall place asset contributions at the Zrt.’s disposal in whole within three years from the date of registration.
Shareholders may exercise shareholder rights through representatives. Executive officers, supervisory board members and the auditor may not function as a representative of a shareholder.
A shareholder may appoint a proxy - after being registered in the register of shareholders - to exercise some or all rights of that shareholder before the limited company in his/her own name and for the benefit of the shareholder. Shareholders have the right to participate, to request information and to make remarks and proposals at the general meeting, and if holding shares with voting rights, to vote. Voting rights attached to shares - outside the cases specifically provided for in the Civil Code - are determined by the nominal value of such shares.
The supreme body of a Zrt. is the general meeting, which can be held by conferencing as well; in that case, the articles of association, or a general meeting resolution adopted by authorization of the articles of association, has to define the procedure for checking the identification of shareholders participating through a telecommunications connection, along with the voting procedure and the authentic conclusion of the results, furthermore, define the procedure for the election of general meeting officers, and the requirements for shareholders to make their opinions known and to make proposals. The discussions of a general meeting held by conferencing and the resolutions adopted shall be recorded using a reliable medium so that it can be retrieved at any time in the future. Where the discussions of the meeting have been recorded, minutes shall be drawn up based on the said recording and it shall be signed by a member of the management board.
The Management Board
Zrt. shall be managed by the management board, comprised of no less than three natural persons; it shall elect its chairman from among its members.The board shall prepare a report on the management, the financial situation and the business policy of the company at least once every year for the general meeting, and at least once every three months for the supervisory board, if the Zrt. has one.
The Supervisory Board
The supervisory board acts as an independent body; it has the right to make a written report on the financial report of the managing board. If the supervisory board finds that the activity of the management is contrary to the law, to the articles of association or to the resolutions of the general meeting, or otherwise infringes upon the interests of the Zrt., the supervisory board has the right to convene the general meeting to discuss that issue and to take the necessary decisions.
The statutory auditor shall be responsible for carrying out the audits of accounting documents according to the relevant regulations, and to provide an independent audit report to determine as to whether the annual account of the Zrt. is in conformity with legal requirements, and whether it provides a true and fair view of the company’s assets and liabilities, financial position and profit or loss. Statutory auditor may be an individual auditor or an audit firm shown in the register of auditors.
The managing director’s and the member’s details as well as the bank account(s) of the company are publicly accessible. The shareholders of company limited by shares under 50% are not shown in the company register.