Changing corporate laws

As of March 1, 2012 regulations of corporate law have been changed again by the legislator. We would like to briefly summarize the most remarkable corporate law changes for the companies’ decision makers:

  • the attorney’s seat service supply for companies will not be possible anymore (further seat service cannot be provided, although the already provided services can be maintained);
  • the simplified company registration will be probably de facto terminated because of the (i) increased procedural costs (ii) the elongated time of the administration procedure, (iii) and because of the strict, compulsory and objective penalty risk attached to the attorney we take the view that there is no further rational argument for the simplified company registration proceeding;
  • mandatorily HUF 50.000 to 900.000 penalty has to be imposed if the 30 days deadline is overrun in the incorporation or in the process of registration the changes of the company (the possibility of submitting a request for excuse because of the omitted deadline is not excluded by the legislator yet);
  • in case foreign companies are the members of the company concerned with the changes then their company extract needs to be submitted to the court along with the official translation (we trust that according to the regulations the company courts uniformly will not insist on the OFFI translations);
  • in the first registration process when foreign persons are concerned in the procedure (both in incorporation and registering the changes regarding the company) the delivery agent (a mandated person with Hungarian address who takes the consignments over on behalf of the company) needs to be appointed until February 1, 2013 the latest (the member, manager or the member of the supervisory board cannot be appointed as delivery agent).
  • at business share transfer if the company’s public debt exceeding HUF 15 million then an interim balance sheet needs to be prepared for the day of the transfer;
  • in case the company transformation is resolved after March 1, 2012 if the equity of the companies is decreased, then all the companies’ creditors can claim for security for the overdue and undue demands (as a result the transformation might be drawn out);
  • if the de-merger is resolved after March 1, 2012 the claims needs to be primarily enforced against the legal successor named in the de-merging agreement, however the other successors have universal responsibility for such claims at the time when the claim becomes overdue (quasi several surety ship instead of the in line successor responsibility);
  • in respect of the interim dividend the amount indicated in the balance sheet or in the interim balance sheet can be accepted to 6 months;
  • in case the shared capital is reduced at the same time of capital withdrawals (rearrangement of particular capital shares) then all the creditors of the company – and not only those with undue claims – may claim for security for their claims against the company;
  • in case of Zrt. (private company limited by shares) every shareholder needs to be listed in the shareholders register.
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