Types of Hungarian companies:

General Partnerships
Limited Partnerships
Limited-Liability Companies
Private Limited Companies
Public Limited Companies

 

In case of all types of the companies:

• the initial capital contribution can be provided as well in cash or in kind as well,
• if there are more persons appointed to represent the company, the representation can be individual or jointly,
• board of supervisors can be appointed by the members/shareholder. The task of the supervisors is the make control regarding the directors and to represent the sake of the members/shareholders,
• members may not be solicited by public invitation, except Public Limited Companies.

All the companies has to have:

• a seat in Hungary,
• representative (director, managing director) that can be foreigner as well,
• bookkeeping maintained in Hungary.

 

Branch of a foreign company

In case a foreign company does not intend to establish an own company in Hungary, it can form a Branch instead.

Nowadays it is not a common type of company, because it was very common only in the 90’s when there were restrictions for foreigners to establish a company.

Basically there is only one advantage to form a Branch of a foreign company: if a foreigner financial company or bank would like to provide its services in Hungary, it does not need to apply for a permission in Hungary, if it has permission in any country of the EU.

The big disadvantage of a Branch is, that the foreigner company has to take full liabality for the debts of the Branch.

 

Procedure of formation

In the first step we send a form for the client that must be filled. In this order form we need to gather information like:

• the name, mother maiden name’s and address of the members, directors,
• address of the seat of the company,
• capital contributions of the members,
• additional information, depends on the demands of the client and the chosen type of company.

 

Once we have all the necessary information, we can prepare the necessary documents within one working day. The documents can be prepared in English as well.

In the next step we send the prepared documents to the client via email with the instructions. The client needs to sign the documents either at a notar (with apostille), a Hungarian embassy or consulate or at our office. If the client signs the documents via a notar or a Hungarian embassy or consulate we need the documents back in original.

If the documents are not signed via a Hungarian attorney, foreign notar (with apostille) or Hungarian embassy, consulate, there is the possibility that the documents shall be considered void, which means that the company is not formed, does not exists and will be cancelled from the Registrar.

 

As we obtain the signed documents, we prepare them for filing at the Registrar and the Registrar registers the company within 2-3 working days in case the client chooses the Simplified Registration Procedure. So, the formation of the company lasts about 1-5 working days from the time we have the necessary information and provided if we receive the documents via courier.

The Simplified Registration Procedure means that the company has to use a blanket as its Memorandum of Association, and so certain alternatives (like preference shares in case of Private Limited Company) can not be chosen. The Simplified Registration Procedure is not available in case of Public Limited Company and Branch of forign company.

In case the client does not choose the Simplified Registration Procedure, the Registrar has 30 days to register the company instead of the aforementioned 5 days. That’s why the clients mostly choose the Simplified Registration Procedure.