Entrepreneurs who want to open a business in Hungary have several types of legal structures to choose from. In Hungary, the Companies Act (Act IV of 2006 on Business Associations) governs the regulation of companies.
Types of companies in Hungary
According to the Hungarian Companies Act, there are several main types of companiesthat can be established in Hungary.
•Limited Shares Company: a legal entity that requires a minimum hare capital of 5,000,000 or 20,000,000 HUF.
•Limited Liability Company: a legal entity that requires a minimum share capital of 500,000 HUF.
•Unlimited partnership: it does not have legal status and there is no minimum share capital necessary for its incorporation; all members have unlimited liability
•Limited partnership: like the unlimited partnership, it does not have legal status and does not require a minimum share capital; at least one member has unlimited liability.
•Joint Stock Companies: can be private or public and the public ones may be traded on the Hungarian Stock Exchange; the minimum share capital for a Hungarian public joint stock company is 20 million HUF, and for private joint stock companies the minimum share capital is 5 million HUF.
The share capital of a company that is founded by a single member must be paid in full prior to the submission for company registration.
Limited liability companies (Kft.) and limited shares companies (nyrt or zrt.) are mostly used by business owners in Hungary. Our Hungarian lawyers can offer you more details about the specific liabilities of the shareholders, according to the type of company.
Company incorporation in Hungary
Regardless of the type of Hungarian company, the first step towards forming a new company in Hungary is preparing the Articles of Association. They must be signed by all the members and legalized by a notary public. Our attorneys in Hungary can also countersign the Articles of Association.
The new company can begin to operate once the Articles of Association have been signed. However, also it needs to be registered at the Court of Registration. The new business needs to be reported to the Court of Registration within 30 days after the Articles of Association have been signed.
Our Hungarian law firm offers specialized legal services and complete services for company incorporation in Hungary. Please contact us for detailed information and personalized offers.
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