[ESTABLISHING A BUSINESS ENTITY IN HUNGARY]
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Limited liability company (Kft.)
Private company limited by shares (Zrt.)
▪ The minimum registered capital is HUF 3,000,000 (approx. EUR 7,500) both cash and in-kind contribution is allowed; ▪ the contribution of each member may not be less than HUF 100,000 (there are arguments that deviation from this rule is allowed but this standpoint has not yet been tested) ▪ the provision of cash contribution is not mandatory upon establishment, i.e. a limited liability company can be incorporated without the provision of any cash, however, certain rights (dividend payment, transfer of membership rights) cannot be exercised until the full payment of the contribution. ▪ Membership rights are represented by so-called “business quotas”; ▪ business quota is a notional concept, it is not embodied in physical or electronic form, it is solely registered on the members’ list of the company; ▪ In general, each quotaholder has one business quota. The size of the business quotas of the different members can, however, be different. Also, if there are different rights attached to certain types of business quotas, one member may have more than one business quota; ▪ if not provided otherwise under the constitutional document, the extent of voting right, dividend right and other membership rights is linked to the capital contribution made by the ▪ respective quotaholder.
▪ The minimum registered capital is HUF 5 Million (approx. EUR 12,500); ▪ both cash and in-kind contribution is allowed; ▪ no restriction on the nominal value of the shares.
Capital requirements
▪ Membership rights are represented by shares; ▪ shares are considered as securities; ▪ shares exist in physical (printed) or in dematerialised form. In the ultimate case shares are recorded on the securities account of the shareholder; ▪ if not provided otherwise under the constitutional document, the extent of voting right, dividend right and other shareholder’s right is linked to the nominal value of the share.
Membership rights
ILN Corporate Group – Establishing a Business Entity Series
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