A new civil code incorporating significant changes to corporate law will come into force on 15 March 2014.
This is the first in a regular series of Law-Now bulletins setting out the most important changes.
Under the new corporate law regime:
- the parties will be free to agree their own rules for running a company except where prohibited by law. The current regime does not permit this;
- limited liability companies (kft.-s) will be subject to a new minimum registered capital requirement of HUF 3 million;
- any exiting kft.-s with registered capital below HUF 3 million must (according to the current wording of the transitional arrangements) increase its registered capital by 15 March 2016 or, if earlier, when its deed of foundation is first amended after 15 March 2014. Any company not doing so will be required to transform or dissolve;
- there will be a new ‘top-up’ means of contributing to the company’s registered capital both on establishment and when it is increased from distributable profit, which should make it possible to establish kft.-s without actually contributing any cash;
- all companies limited by shares must be established as private companies and if they can only be transformed thereafter to public companies. Also, all public companies must be listed on a stock exchange and existing public companies limited by shares but currently not listed must transform into private companies unless they become listed on a stock exchange by 15 March 2016.
Law: Act V of 2013 on the New Civil Code