HUNGARY Law and Practice Contributed by: Mihály Barcza and József Bulcsú Fenyvesi, Oppenheim Law Firm
1.4 Variation of Shareholders’ Rights Deviation From Main Rights Common to All Shareholders Hungarian regulation provides significant freedom to shareholders in respect of the alteration of sharehold- ers’ rights (as well as in relation to variations in the structure of a company pre-set by the law) in the arti- cles of association. Rights can be altered to be dis- proportionate to the shareholders’ stake; certain rights can be decreased and priorities may be allowed in certain matters. Variations are widely allowed, unless: • the law explicitly forbids it; • the derogation from the law clearly violates the interests of the company’s creditors, employees or minority members; or • it is likely to prevent effective legal supervision over the company. For example, an explicit prohibition by the law is that no shareholder may be fully excluded from participa- tion in the profits or the burden of losses in a company. Minority Rights Minority shareholders reaching the statutory threshold (usually holding at least 5% of the voting rights, or 1% of the votes in a Nyrt), separately or jointly, are vested with special shareholders’ rights, as follows. • They may request that the director calls a share- holders’ meeting by indicating their reason and aim. • They may request the appointment of an auditor to examine certain transactions of the company within the last two years. • In special circumstances they may initiate a pro- ceeding themselves in the name of the company to enforce a claim against certain officers of the company. • They may propose new items to the agenda of the shareholders’ meeting, and the meeting shall discuss those agenda items. • They may request the audit examination of a pay- ment made by a Zrt from its equity to the share- holders. If such rights are not respected, the minority share- holders may turn to court for a remedy.
Obligation of Qualified Shareholders to Purchase Shares If a shareholder of a Kft or Zrt – directly or indirectly – acquires more than three quarters of the votes, any minority shareholder of the company may request the shareholder who has the qualified majority to pur- chase the minority shareholder’s participation interest in the company at market value; such value may not be lower than the value these shares represent in the company’s equity. Takeover Bids in Nyrts It is possible to make takeover bids in Nyrts on a vol- untary or obligatory basis. An obligatory takeover bid shall be made by the acquirer or acquirers prior to: • acquiring a shareholding that will result in the acquirer holding at least a 25% influence – as defined by the law – in a Nyrt, if no other share- holder holds more than a 10% influence in the company; and • acquiring a shareholding that will result in the acquirer holding an influence of more than 33% in the company. Within the takeover bid, the acquiring shareholder(s) shall make an offer to purchase the shares of all oth- er shareholders. This offer shall be approved by the respective authority and sent to and then published by the board of directors. The other shareholders are entitled to accept this purchase offer within the period set out by the offer within the statutory limits. The purchase price shall be determined according to the rules defined by the law. 1.5 Minimum Share Capital Requirements For companies operating with unlimited liability for one or more members, such as the unlimited partner- ship (Kkt) and the limited partnership (Bt), no minimum share capital (registered capital) requirements apply. For companies where the liability of members/share- holders is limited, the following minimum rules apply: • the registered capital of a limited liability company (Kft) must not be less than HUF3 million;
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