HUNGARY Law and Practice Contributed by: Mihály Barcza and József Bulcsú Fenyvesi, Oppenheim Law Firm
Regulation of Nyrts The regulations pertaining to the Zrt apply with some restrictions as follows: unlike the Zrt, in a Nyrt it is not permissible to issue preference shares relating to appointment of members of the board of directors or supervisory board and pre-emption rights, and further restrictions apply to priority voting rights. If any of these types of shares have been issued in a Zrt that wishes to enter the stock market and thereby become a Nyrt, such shares must be converted to ordinary shares or to the types of preferential shares that may be issued by a Nyrt. Primary Sources of Law and Regulation The primary sources of law and regulation relevant to shareholders’ rights are: • the Civil Code (the general source of corporate law); • the Act on Public Company Information; • the Company Registration and Winding-up Pro- cedure Act (mainly prescribing the registration of companies and their voluntary dissolution); • the Bankruptcy Act (setting out the rules on liqui- dation); • the Accounting Act (determining the accounting rules); • the Act on Screening of Foreign Investments; and • the Capital Market Act for public companies (Nyrt). Main Rights Common to All Shareholders The main rights common to all shareholders are: • participation in the decision-making of the compa- ny relating to essential business and personal mat- ters via the shareholders’ meeting (voting rights); • the right to access information relating to the com- pany; and • dividend rights. Shareholders’ rights are usually proportionate to the volume of their stake in the company.
that qualifies as a direct or indirect majority inter- est under Hungarian civil law, provided that the total value of the investment reaches or exceeds HUF350 million (approximately EUR875,000). The transaction may not become effective unless the relevant ministerial procedure is conducted. The min- ister shall be notified of the transaction, and is entitled to block such a transaction if it may harm or jeop- ardise Hungary’s national interests, public security and order. The blocking decision may be challenged before the Hungarian courts on substantive or proce- dural grounds. 1.3 Types or Classes of Shares and General Shareholders’ Rights Regulation of Kfts In Kfts, members have business quotas, which usually correspond to their capital contribution. Generally, all members are entitled to the same rights and obliga- tions, which are usually proportionate to their quotas. However, members may deviate from this general rule in the articles of association and are free to set out their rights and obligations as they see fit by mutual consent, with a few restrictions provided by the law. For further details, see Main Rights Common to All Shareholders , below. Regulation of Zrts In Zrts, various types of shares may be issued, as follows: • ordinary shares to which all main shareholders’ rights pertain; and • preference shares that give certain advantages over other shares and may include different classes according to the shareholders’ rights to which the preference pertains. Preference may relate to dividends, liquidated assets, voting rights, the appointment of board or supervisory board mem- bers, pre-emption rights, or other as specified and set out in detail in the articles of association. Shares may be printed or issued in dematerialised forms.
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