From 15 March 2014, companies operating in Hungary are subject to the corporate rules of the new Civil Code, replacing the Companies Act.
The new Code has eight parts each regulating a different area of law (corporate, individuals, family, property, contracts, etc.). Unlike other parts of the new Code, the corporate rules do not apply immediately to all Hungarian companies:
- from 15 March 2014, companies may choose (by shareholder resolution) to become subject to the corporate rules of the new Code and to harmonise their articles of association (deed of foundation) with them
- companies changing certain clauses of their articles for the first time after 15 March 2014 will have to bring their entire articles into compliance with the new rules
- all other limited liability companies have until 15 March 2016 to bring their articles into compliance with the corporate rules of the new Code, when they will automatically apply
- any company with articles that do not comply with the corporate rules of the new Code after 15 March 2016 risks being subject to judicial review in the Court of Registration, which could impose a fine for delay in reporting the required amendment of its articles
- the corporate rules do not apply to companies that are or become under voluntary dissolution before they become subject to the new Civil Code
- there are some exceptions, such as limited liability companies (Kfts) required to increase their registered capital to the new higher capital requirement (HUF 3,000,000 instead of HUF 500,000) by 15 March 2016 cannot decide to become subject to the corporate rules of the new Code until their registered capital is below the new requirement.