HUNGARY Law and Practice Contributed by: Mihály Barcza and József Bulcsú Fenyvesi, Oppenheim Law Firm
1. Types of Company, Share Classes and Shareholdings 1.1 Types of Company The following companies may be formed in Hungary. • An unlimited partnership ( közkereseti társaság – Kkt) is a company consisting of at least two members, whose liability is unlimited and joint and several for the debts of the company. There is no minimum registered capital requirement. • A limited partnership ( betéti társaság – Bt) is a company consisting of at least two members. At least one member’s liability is unlimited (and joint and several with other unlimited members) for the debts of the company, while at least one other member’s liability is limited to the amount of that member’s capital contribution. A Bt has no mini- mum registered capital requirement. • A limited liability company ( korlátolt felelősségű társaság – Kft) is a company consisting of one or more members, whose interests in the Kft are represented in the form of business quotas (shares) corresponding to their capital contribution to the company’s registered capital, and expressed as a percentage of the registered capital. The liability of the members is limited to their capital contribu- tions. The minimum registered capital required in respect of a Kft is HUF3 million. • A private company limited by shares ( zártkörűen működő részvénytársaság – Zrt) is a company with one or more shareholders, who subscribed to the shares issued in a predetermined number and nominal value. The members’ participation interests take the form of shares; the liability of the shareholders is limited to the provision of their capital contribution (the issue value of their shares). The shares of a Zrt cannot be offered to the public. The minimum registered capital requirement of a Zrt is HUF5 million. • A public company limited by shares ( nyilvánosan működő részvénytársaság – Nyrt) is a company in which shares representing the company’s regis- tered capital are offered and traded publicly. The minimum registered capital requirement of a Nyrt is HUF20 million.
Most companies are founded in the form of Kfts and Zrts. This chapter will focus on the regulation of Kfts, Zrts and Nyrts, due to the fact that unlimited and lim- ited partnerships are economically less significant. 1.2 Types of Company Used by Foreign Investors Both natural and legal persons, either Hungarian or foreign, may be members of companies. However, a natural person can be a member with unlimited liability in only one company at a time (meaning, in practice, membership in a Kkt or a Bt). A person under 18 years of age may not be a member with unlimited liability, and a Kkt or a Bt may not be members with unlimited liability in another Kkt or Bt. A person may also be restricted from being a member of a company (except for holding shares in a Nyrt) by the court, due to a criminal punishment. A person becomes a shareholder by acquiring shares in a company by way of establishing a new company, or by acquiring shares or subscribing to new shares in an existing company. Membership of a company is constituted by the acquisition of shares in the com- pany. In Kfts, shareholders’ rights can be exercised after the company has been notified of such an acqui- sition; the registration by the director in the members’ list is not necessary for this purpose. However, in the case of Nyrts and Zrts, registry in the book of shares is necessary in order to exercise shareholders’ rights. Most companies that foreign investors take part in operate in the form of a Kft or a Zrt. Unlimited and limited partnerships are, in general, economically less significant. Screening of Foreign Investors Measures for screening foreign investments were introduced in Hungary in January 2019. Under the relevant act (which is in force as at the end of August 2025), ministerial approval is necessary if: • the investor qualifies as a foreign investor; • the relevant transaction relates to certain specific strategic sectors defined by the law; and • the relevant transaction qualifies as a triggering event.
84 CHAMBERS.COM
Powered by FlippingBook