HUNGARY Law and Practice Contributed by: Mihály Barcza and József Bulcsú Fenyvesi, Oppenheim Law Firm
the law. The company will be managed by the liquida- tor appointed by the court with the aim of preserving and collecting the company’s assets and satisfying the creditors’ claims. Participation in Remaining Assets During the course of the liquidation process, the liqui- dator satisfies creditors’ claims in the statutory order. In this order the costs of the liquidation come first, followed by prioritised securities, the claims of certain sensitive groups, social security and tax payables, etc. When all other debts are covered, the claims of con- nected persons including shareholders are paid last. The company’s assets remaining after the settlement of all debts, if any, shall be allocated to the share- holders in proportion to the capital contribution they provided. Persons holding preferential shares may have priority rights regarding the participation in the remaining assets. Shareholders’ Liabilities Generally, the shareholders of Kfts, Zrts and Nyrts may be held liable up to their respective capital contribu- tion represented by shares (or business quotas) for the debts of the dissolved company. Nevertheless, this corporate veil may be lifted in certain special cases, as follows. If a shareholder abused its limited liability, resulting in any outstanding creditors’ claim remaining unsatisfied following the liquidation, the shareholders in question shall be subject to unlimited liability for such debts. This liability shall apply, in particular, if that shareholder disposed of the assets of the company as if they were its own, or if the shareholder reduced the assets of the company for the benefit of others or the shareholder’s own benefit in a way that it knew (or should have known with due care) would result in the company not being able to satisfy its obligations towards third parties. Furthermore, a shareholder of a Kft or a Zrt who – directly or indirectly – controls at least three quarters of the votes is obliged to satisfy creditors’ claims that remain unsatisfied after the liquidation of the company if the liquidation was due to business decisions made by the majority shareholder to the detriment of the company.
The foregoing liability of majority shareholders also applies if they transferred their shares within three years immediately preceding the commencement of a liquidation, and if the debts of the company under liquidation exceed 50% of its registered capital (which is easily reached as the registered capital require- ments are quite low – see 1.1 Types of Company ). This obligation may be avoided if the shareholder in question verifies that the company was still solvent at the time of the transfer, or even if it was insolvent, that the transferring shareholder proceeded in good faith, taking the creditors’ interests into consideration. Challenging Decisions of the Company’s Bodies Any shareholder, executive officer or member of the supervisory board may challenge the validity of a reso- lution of the shareholders’ meeting, the management or the supervisory board and other bodies of a com- pany, if the resolution violates the law or the articles of association (provided that the challenging person did not approve the given resolution with its vote). This type of action may be initiated in court within the statutory deadline. Commencing Court Supervisory or Other Regulatory Authority Proceedings 10. Shareholders’ Remedies 10.1 Remedies Against the Company In certain unlawful actions or circumstances, the shareholder may commence the supervisory proceed- ings of the commercial court, or other proceedings of the competent regulatory authorities. The court and the respective authorities will take gradually more severe and/or repeated measures to restore the com- pany’s lawful operations. Challenging Registration in the Companies Registry If a change affecting the shareholder is registered in the companies registry based on unlawful documents, the affected shareholder may initiate a claim against the company for annulment of the change. Claim for Dividends The shareholder may also enforce its claim for divi- dends vis-à-vis the company, if it is legally entitled to
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