[ESTABLISHING A BUSINESS ENTITY IN HUNGARY]
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thing of value or intellectual work, any intangible property or any claim that is recognised by the debtor or that has been granted by a final and definitive court decision. If any of the shareholders provides an in-kind contribution to the registered capital of the respective company, the actual value of such in-kind contribution must be certified in writing by an independent auditor. Hungarian law also enables the shareholders of a zrt. to denominate the registered capital of the respective company in EUR or USD. In such case, the books of the company must also be kept and the annual report must be prepared in the same currency. There are no restrictions on the nominal value of the shares. However, careful financial planning is required, as tax filings and other financial obligations must also comply with the selected currency. d. Shareholders’ rights The membership rights in a zrt. are represented by shares. The shares are considered as securities and may exist in physical (printed) or in dematerialised form. In the latter case shares are recorded on the securities account of the shareholder. If not provided otherwise, the extent of voting rights, rights to dividend and other shareholder’s rights are linked to the nominal value of the share. e. Special rights Preferred shares may be issued by the company to its shareholders. The Civil Code does not set out such an exhaustive list of preferential rights, enabling the shareholders to resolve on issuing preferred shares with any desired
preferential
rights,
without
any
restriction. f. In addition to preferred shares, other special types of shares (e.g. employee shares, interest bearing shares, redeemable shares, etc.) may be issued by the company. Transfer of ownership rights Shares are freely transferable, however certain restrictions may be imposed on the transferability of the shares by the shareholders. Such restrictions are only valid if indicated on the share certificate itself. Physical shares may be transferred by physical delivery, together with a written endorsement. Dematerialised shares are transferred via debiting and crediting the securities accounts of the respective shareholders. g. Dividend A shareholder shall be entitled to receive a dividend from the distributable profit of the company. As ordered for distribution by the supreme body, in proportion to the nominal value of their shares, unless the shareholders agree otherwise (i.e. by granting special rights to certain shareholders). Only those shareholders shall be entitled to receive dividends who are registered in the shareholder register at the time of the general meeting deciding on the dividend payment. h. Dividends may also be paid in a form other than cash if permitted by the company’s articles of association. Supreme body The supreme body of a private company limited by shares is the general meeting
ILN Corporate Group – Establishing a Business Entity Series
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