[ESTABLISHING A BUSINESS ENTITY IN HUNGARY]
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entitled to receive dividends who may exercise their membership rights at the time the resolution on the dividend payment is adopted. g. Supreme body The supreme body of the limited liability company is called the members’ meeting which must be convened by the managing director. The members’ meeting has a quorum if at least half of the eligible votes are represented. If the articles of association permit so, the members’ meeting may be held by electronic means of communication. The decisions falling within the scope of the members’ meeting may also be made in a written form, without holding a meeting. Generally, the decisions of the members’ meeting are passed with simple majority of votes, although the Civil Code also requires that certain strategic decisions must be resolved with a qualified (75%) majority. The members may adopt higher majority requirements for certain decisions in the articles of association of the company. Executive officers h. Managing directors The executive officers of a kft. are called managing directors. The managing directors are, generally, elected by the members’ meeting. Managing directors are responsible for representing the company, for the daily operation of the company and managing its affairs in accordance with the resolutions of the members’ meeting and the provisions of the articles of association. The current regulations enable the companies to decide whether the managing directors should act individually concerning the
operative day-to-day decisions of the company or to form a body of the managing directors. The Civil Code also allows legal entities and not just natural persons to be elected as managing directors. i. Supervisory board The election of a supervisory board is only mandatory if the number of full- time employees of the limited liability company exceeds 200 on annual average. j. Auditor The appointment of an auditor is only mandatory if the company’s yearly revenues exceed HUF 600 million or the company employs more than 50 employees or if the company is obliged to prepare a consolidated financial statement. The auditor is elected by the supreme body of the company for a maximum term of 5 (five) calendar years starting from the date of the appointment. 4. Private companies limited by shares (zrt.) a. Company name b. The designation „ zártkörűen működő részvénytársaság ” (private company limited by shares) or its abbreviation „ zrt .” must be indicated in the company’s name. The company name must clearly differ from other registered companies. c. Capital requirements The minimum amount of the registered capital is HUF 5,000,000 (approximately EUR 13,000) which can be provided as a cash or as an in-kind contribution. In contrary to kft. the cash part of the contribution must be at least 30% of the total contribution. An in-kind contribution may be any marketable
ILN Corporate Group – Establishing a Business Entity Series
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