Private limited-liability companies are business associations founded with an initial capital (subscribed capital) consisting of capital contributions of a pre-determined amount. The liability of members (can be also single member company) 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 law, members are not liable for the liabilities of the company.
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.
The company's capital
The amount of initial capital may not be less than 3 million hungarian forints (~10.000.- EUR). It's not necessary to pay up full the initial capital at the time of the registration.
The initial capital of the company consists of the capital contribution of the individual members. Capital contributions are provided by the members in cash and in kind to comprise the capital of the company. The capital contributions of members may be of varying value, however, the value of each contribution may not be less than one hundred thousand forints.
A company may be registered only if, prior to the submission of the application for registration, some part of each cash contribution has been paid up to the order of the company.
If the full amount of cash contributions is not paid up at the time of the foundation of the company, the method and due date of the payment of the remaining amounts must be specified in the memorandum of association. All cash contributions must be paid up within a period of two years following registration of the company.
The bank account of the company can be opened at the same day of the signature of the founding documents, if the representative of the company is in Hungary. The bank account can not be opened remotely or by a powered person.
In-kind contributions must be made available to the company at the time and in the manner specified in the memorandum of association. If the value of in-kind contributions at the time of foundation amount to at least half of the initial capital, it must be made available to the company in its entirety at the time of foundation. If the in-kind contribution was not made available to the company in its entirety at the time of foundation, it has to be provided within three years from the company's registration.
<*EUR 1 = HUF 310 approximately>
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 whole procedure can be done remotely and by our law firm's legal representation.
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.
Following registration of the company, the rights of members and their share from the assets of the company are embodied by their business shares. Unless otherwise prescribed in the memorandum of association, the business shares of members must be consistent with their respective capital contributions. Identical membership rights must be attached to equivalent business shares. The memorandum of association may, however, invest certain business shares with membership rights which are different from those of other business shares. Each member may have only one business share. One business share may be owned by several persons. With the exception of the company's own business share, business shares may be freely transferred among the members of the company. Members are entitled to receive a share from the company's taxed profit. The profit can not be distributed Till the initial capital has not payed up full.
Organisational Structure of a limited liability company
The supreme body of a company is the members' meeting. Members' meetings are to be convened at least once every year.
The principal duty of the supreme body of a business association is to adopt decisions on fundamental and strategic issues. The matters rendered under the exclusive competence of the supreme body are defined by the provisions pertaining to the specific company forms.
Meetings of the supreme body may be attended by the members of the business association, and - without voting rights - any person invited according to legal regulation or the memorandum of association. All members of the business association have the right to partake in the activities of the supreme body. The members' meeting has a quorum if at least half of the initial capital or the majority of the eligible votes are represented.
Administration of the company's affairs and representation of the company are carried out by one or more managing directors elected from among the members or third persons. The memorandum of association may provide that all members be entitled to exercise management and representation. Managing directors keep records of the members of the company. Also a legal entity can be the manager of the company.
The auditor may be appointed (not obligatory) by the supreme body of the business association is responsible for carrying out the audits of accounting documents as specified in the Accounting Act, including determining whether the annual report of the business association has been filed as prescribed and 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.
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