HUNGARY Law and Practice Contributed by: Mihály Barcza and József Bulcsú Fenyvesi, Oppenheim Law Firm
3.4 Disclosure of Interests The form of the company determines whether and at what ownership level the shareholders’ interest shall
ally cannot vote due to conflict of interest rules. There- fore, unless conflict of interest rules are excluded in the articles of association, the other (non-transferring and non-dividing) shareholders actually allow or reject the transfer. Restrictions on the transfer of shares beyond statu- tory limitations must be provided for in the articles of association and indicated in the list of shareholders in order to be enforceable vis-à-vis the company and third parties. Special rules apply to the transfer of shares in a Zrt or Nyrt, where transfer restrictions shall apply in dealings with third parties if the restriction, including the details, is clearly indicated in the printed share, or in the secu- rities account in the case of dematerialised shares. 3.3 Security Over Shares Shareholders may grant securities over their share- holdings in the articles of association or under a sepa- rate agreement. Securities granted in the articles of association and/or registered in the company registry are public, while securities established in a separate agreement and not registered in the company register are not necessarily made public. In limited liability companies (Kft), a pledge over a shareholding is usually registered in the trade regis- ter and is thus public information. In addition, securi- ties granted over shareholdings may be registered in the company’s members’ list, and for certain types of securities in the securities register (both publicly available). However, the parties may also choose that securities not be registered and made public. If a security is made public, it is usually deemed valid vis-à-vis third persons and the company. For companies limited by shares (Zrt or Nyrt), secu- rities (eg, pre-emption rights, redemption rights or purchase options) are only valid vis-à-vis the com- pany or third parties if they are clearly indicated in the printed share, or in the securities account in the case of dematerialised shares.
be disclosed. Rules on Kfts
In Kfts, the online and publicly accessible company register indicates all shareholders, regardless of their ownership level. The change of ownership shall be registered and publicly disclosed. The percentage of ownership is indicated in the members’ list and may be indicated in the articles, which are also publicly In Zrts and Nyrts, shareholders are generally not dis- closed in the company register. Nevertheless, share- holders holding more than 50% or at least 75% of the votes are publicly disclosed and registered as having a voting right in the company after acquiring this por- tion of interest. available electronically. Rules on Zrts and Nyrts Also, the book of shares includes all shareholders exercising shareholders’ rights in the company. This, in turn, is publicly accessible and may be inspected by any third person at the registered seat of the company. In Nyrts, special disclosure obligations apply: share- holders of a Nyrt shall notify the company, as well as the Hungarian National Bank acting as supervisory authority, if their voting rights – directly or indirectly – reach, exceed or fall below 5%, 10%, 15%, 20%, 25%, 30%, 35%, 40%, 45%, 50%, 75%, 80%, 85%, 90%, 91%, 92%, 93%, 94%, 95%, 96%, 97%, 98% or 99%. Moreover, the company shall notify the Hun- garian National Bank if it receives any such sharehold- er’s notice, and shall also publish that notice. Specific requirements regarding disclosure are applicable to the process of acquiring participation via a public takeover bid. 4. Cancellation and Buybacks of Shares 4.1 Cancellation Shares or quotas are typically cancelled based on a resolution of the shareholders’ meeting. Cancellation
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