company formation for foreign residents in hungary
Our firm is dedicated to understanding and understanding business and corporate cultures in the economic sphere, and has extensive experience in the field of corporate law.
The activities include the drafting and amendment of articles of association for limited partnerships, limited liability companies, public limited companies and joint stock companies, as well as the countersigning of the drafted documents and the administration of the company court in connection with the incorporation (amendment) of companies.
| IMPORTANT: Mandatory legal representation If you are planning to establish an LLC, a limited liability company, a limited liability company, a joint-stock company or a joint-stock company, you must have a lawyer present during the proceedings before the Companies Court and during the drafting of the deed. |
In addition, our law office can also help you in other areas:
- comprehensive management of corporate affairs
- corporate law services, including corporate legal services, capital increases, dividends
- restructurings
- liquidation
- preparation of internal regulations
- management responsibility and other matters relating to the activities of the management
- commercial law, tax and duty procedures
For operating companies, we also assist in the transfer of interests, shares and shares in companies, as well as in the acquisition and sale of entire companies (M&A):
- complete drafting of documents (including organisational and operational rules), due diligence
- preparation of syndicate contracts
| IMPORTANT: Syndicate contracts The syndicate contract as a named contract is not regulated by our existing law, so it does not provide any guidance on its concept, its formation, termination and consequences of breach. For all these reasons, it is extremely important to hire a lawyer who is familiar with the case law. |
Bankruptcy and liquidation proceedings
The purpose of liquidation proceedings is to wind up a debtor (usually a company, but also a foundation or association) without succession.
If there are outstanding claims against a company, the court will declare the debtor insolvent in the following cases:
- the debtor company has not settled or contested its uncontested or acknowledged contractual debt within twenty days of the expiry of the time limit for payment and has not paid the debt in response to a written demand for payment received thereafter, or
- the debtor has not paid the debt within the period for payment fixed by a final court decision or order for payment (fmh), or
- enforcement proceedings against the debtor have been unsuccessful, or
- the debtor has not settled his debts despite an arrangement in bankruptcy or winding-up proceedings, or
- the previous bankruptcy proceedings have been terminated by the court (§ 18(3), § 18(10) or § 21/B), or
- the debtor’s debts exceed the debtor’s assets, or the debtor has not been able or is not likely to be able to pay his debt(s) when due, and the members or owners of the debtor entity have not undertaken to provide the resources necessary to pay the debts when due, despite being requested to do so, in the proceedings brought by the liquidator.
According to the provisions of the Law on Fees, the fee for liquidation proceedings is HUF 80,000.00 for a legal entity, HUF 30,000.00 for an unincorporated entity and HUF 25,000.00 for the publication fee. The fee must be paid electronically by transfer to the relevant General Court procedural fee account and the publication fee to the IM account. Payment of the fee and costs can also be made by credit card via the EFER system.
In bankruptcy proceedings, contrary to popular belief, the aim is not to dissolve the entity without legal succession, but to obtain a moratorium from creditors and to negotiate a bankruptcy agreement with creditors. The debtor must file a petition for bankruptcy. Legal representation is mandatory in bankruptcy and liquidation proceedings.
Opening and initiating liquidation and bankruptcy proceedings
Liquidation is a relatively common means of enforcing claims. However, the initiation of liquidation always requires careful consideration. Legal representation in liquidation is mandatory under the Civil Procedure Code and the Bankruptcy Act. A recent change is that winding-up proceedings can only be opened electronically, i.e. by sending a form to the competent court using a form-filling software.
Jurisdiction of the court
Winding-up proceedings are initiated by filing an application for a winding-up order with the competent court. The application is subject to the payment of fees and publication costs. Legal representation is mandatory in the proceedings to initiate liquidation.
Insolvency proceedings under the Bankruptcy Act
The court will consider an application for winding-up primarily on the basis of the Bankruptcy and Winding-up Proceedings Act and the Code of Civil Procedure, which is the background legislation to the Act. In particular, the court examines whether the debtor company is insolvent under the Bankruptcy Act.
Insolvency is assessed by the court according to the rules of the Bankruptcy Act. The bankruptcy law clearly defines when a company is considered insolvent, but insolvency in the legal sense is different from insolvency in the ordinary or economic sense.
liquidation and liability
The transactions that a debtor may carry out in the period before liquidation may also be important. During this period, special rules apply to the management managed by the administrator, which result in a different assessment of individual transactions than in the case of ordinary, normal management. In many cases, a normal transaction in the course of day-to-day business may become the basis of the manager’s liability.
An important consideration in relation to individual company transactions, contracts, commitments, etc. is that, under the law and judicial practice, the company owner may also come to the fore in addition to the manager when liability is being assessed.
The scope of our office’s activities includes, among other things, the formation, operation and dissolution of companies, and the full representation of our clients in bankruptcy and liquidation proceedings.