HUNGARY Law and Practice Contributed by: Attila Ungár and Júlia Várkonyi, Lakatos, Köves & Partners
An investment fund manager must have initial capital of at least EUR300,000 in the case of real estate funds. 5.5 Applicable Governance Requirements Limited Liability Company The supreme body of a limited liability company is the members’ meeting. The management of a company is provided for by one or more manag - ing directors. If a company has more than one managing director, said directors may handle management issues as a board or indepen - dently, provided that they may raise an objection against the planned or executed actions of any other managing director. Members or founders may provide for the establishment of a super - visory board comprising three natural or legal persons, tasked with supervising management to protect company interests. A supervisory board must be established if the annual average number of full-time employees employed by the company exceeds 200 and the works council did not relinquish employee participation in the supervisory board. In certain cases (depending on the number of employees and net sales of the company), a statutory auditor responsible for carrying out the audits of accounting documents must be appointed. Public and Private Limited Company The supreme body of a limited company is the general meeting. Different rules apply to pub - lic and private limited companies regarding the convening of and participation in the general meeting. Public limited companies are managed by the board of directors, which comprise at least three natural persons. The board of direc - tors act as an independent body and prepare a report on the management, the financial situ - ation and the business policy of the company at least once every year for the general meet -
ing and at least once every three months for the supervisory board (if any). Public limited compa - nies are required to set up audit committees, and all limited companies must employ an auditor. Investment Funds The collective portfolio management activity of investment fund managers is subject to prior authorisation from the National Bank of Hun - gary. Investment fund managers must have a head office in Hungary and be managed by at least two natural persons under an employment contract. 5.6 Annual Entity Maintenance and Accounting Compliance Annual entity maintenance and accounting compliance costs are different for each compa - ny. Companies are obliged to prepare financial statements for every accounting period, which must be approved by the general meeting and filed with the Registrar of Companies. Public limited companies and companies keep - ing double-entry book-keeping are obliged to elect an auditor. However, in the case of private limited companies, the shareholders shall elect an auditor if: • the average annual net sales of the company exceed HUF300 million; and • the number of employees is more than 50 on average in the two business years preceding the subject business year.
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