HUNGARY Law and Practice Contributed by: Mihály Barcza and József Bulcsú Fenyvesi, Oppenheim Law Firm
deadline. Shareholders may cast their votes in writing, including electronic mail if the articles of association so provide. The management shall then establish the results and announce them to the shareholders. 3. Share Issues, Share Transfers and Disclosure of Shareholders’ Interests 3.1 Share Issues Shares in a Zrt and quotas in a Kft are always issued privately, while shares in a Nyrt may be issued publicly. In general, shares (in a Zrt or Nyrt) or quotas (in a Kft) can be issued either at the time of incorporation or subsequently, as a result of a capital increase. (For fur- ther information on shares, see 1.3 Types or Classes of Shares and General Shareholders’ Rights .) When new shares/quotas are issued through a capital increase, the consideration of the new shares/quotas may be provided by existing shareholders or third par- ties, either in cash or in kind, as set forth in the resolu- tion on the capital increase. In such cases, persons who already hold a stake in the company typically have pre-emption (priority subscription) rights. Alternatively, the consideration for new shares/quotas may be covered from the company’s capital reserves. In this case, the new shares/quotas are allocated to current shareholders, usually in proportion to their existing holdings. If newly issued shares/quotas are subscribed by, or allocated to, the existing shareholders, subscription or allocation is usually proportionate to their sharehold- ings at the time of issuance. However, such rights may also be subject to different priority rules, as set out in the articles of association. 3.2 Share Transfers Shares in Kfts and Zrts are not publicly offered, while in Nyrts they are sold over the stock market. Shares (quotas) in a Kft can be transferred by a written transfer agreement.
Shares in a Zrt can be transferred via endorsement in case of printed shares or transfer between securi- ties accounts in case of dematerialised shares. Nyrts can issue only dematerialised shares, which, similarly, can be transferred via a transfer between securities accounts. The share transfer must be reported to the company’s management for registering in the shareholders’ reg- ister. The new shareholder will be able to exercise its rights vis-à-vis the company after it is registered in the shareholders’ register, or shows the duly endorsed printed share. Transfer Restrictions Share transfers are restricted by the law and can be limited further in the articles of association. Most often, restrictions concern transfer of shares to third parties (persons who are not shareholders), but the articles of association may also contain transfer restrictions between shareholders. Restrictions are common in private companies. Usual restrictions are the following. • The shares can only be transferred via sale and purchase. • In case of selling a Kft’s quota to third parties, the other shareholders, the company and a third person designated by the company’s shareholders’ meeting – in this order – have a pre-emption right. The other shareholders are entitled to exercise their pre-emption right in proportion to their existing participation interest in the company. • The transfer of shares to a third person must first be approved by the company via the shareholders’ meeting. • If a shareholder wishes to transfer its share to two or more separate persons, or if it wishes to retain a part of its share and transfer another part, that share needs to be divided by the shareholders’ meeting. • Certain shareholders may have pre-emption rights even if the shares are transferred to another share - holder (and not to a third party). In these matters, if the decision of the shareholders’ meeting is required, the transferring shareholder usu-
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