[ESTABLISHING A BUSINESS ENTITY IN HUNGARY]
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constitutive document and engage in business operations after having received its tax identification code. A simplified registration procedure may be applied if the company’s constitutive document is based on a standard form prescribed by the laws. The use of standard forms provides less flexibility but leads to lower registration fees and quicker registration. An estimated timeline of a company registration is the following: (i) day 0: all the required information on the company given to the attorney; (ii) between day 0 and day 4: preparation of the required documents by the attorney; (iii) between day 4 and day 11: signing of the documents by the founders and executive officers; it is to be noted that some of the documents need to be notarised and apostilled (or attested by the Hungarian consulate) if signed outside Hungary; (iv) day 11: countersignature by the attorney; (v) day 12: filing the application with the competent Court of Registration; (vi) day 15: receipt of VAT number of the company; and (vii) between day 16 and day 35: registration of the company by the Court; it must be noted that the Court shall register the company within 1 business day of the receipt of its VAT number in case of a simplified procedure, otherwise the procedure can take 15 business day at most.
7. Governance, Regulation and Ongoing Maintenance 7.1 Accounting requirements
The companies incorporated in Hungary need to comply with various Hungarian accounting and filing requirements. The Hungarian accounting rules are in line with EU and International Accounting Standards. Double-entry bookkeeping is required for limited liability companies and for companies limited by shares. Act C of 2000 on accounting regulates the accounting, audit and reporting requirements and contains the rules for the financial statements to be prepared by the companies. The company needs to keep an ongoing record on its financial status during the financial year. The company has to consider the basic principles of accounting when preparing its records. Such basic principles contain rules for the invoices and accounting documents issued or received and the method of accounting.
7.2 Reporting requirements
The company needs to prepare at the end of each financial year a financial statement. A company is entitled to prepare and submit a simplified financial statement if two of the three following conditions can be applied to the company: (i) the company’s balance sheet total does not exceed HUF 1,200 million (approximately EUR 3,100,000),
ILN Corporate Group – Establishing a Business Entity Series
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