Dr. Nemes Iván Sándor

Company Forms in Hungarian Law

Hungarian companies can be established in forms specified by the new Civil Code came into effect on 15/03/2014.

These types of companies include the following: general partnerships(közkereseti társaság; kkt.), limited partnerships (betéti társaság; bt.), private limited-liability companies (korlátolt felelősségű társaság; kft.), public (nyilvánosan működő részvénytársaság; nyrt.) and private (zártkörűen működő részvénytársaság; zrt.) limited companies (részvénytársaság; rt.).

The Act distinguishes between companies having the legal status of persons and those lacking same. Still, for most practical purposes the two types are the same, because both can obtain similar rights and subject to similar obligations (e.g. they can be sued, can sue, can conclude contracts, acquire property).

Companies can be established by Hungarian and/or foreign natural person and/or companies. Each company must have at least two members excepting private limited liability (korlátolt felelősségű társaság; kft.) and private limited companies (zártkörűen működő részvénytársaság; zrt.).

All types of companies listed above may also operate in nonprofit form, but it must be designated in the corporate name.

A natural person at one time can have unlimited liability in one company only. A minor can not be an unlimited partner. A general partnerships (közkereseti társaság; kkt.) or limited partnerships can not have unlimited liability in a company (betéti társaság; bt.).

In a general partnerships (közkereseti társaság; kkt.) there must be at least two partners. Each partner has unlimited liability. This type of company can be established without minimum initial capital. In a limited partnerships (betéti társaság; bt.) there must be at least one unlimited partner and one limited partner. This type of company can also be established without minimum initial capital.

A private limited-liability company (korlátolt felelősségű társaság; kft.) consists of one or more members with limited liability. This type of company must be established with minimum initial capital of 3.000.000 HUF. The private limited-liability companies is currently the most common because members are limited liability and the initial capital is not too high.         

A limited company (részvénytársaság; rt.) consists of one or more members with limited liability. The public limited company (nyilvánosan működő részvénytársaság; nyrt.) must be established with minimum initial capital of 5.000.000 HUF and private (zártkörűen működő részvénytársaság; zrt.) with minimum of 20.000.000 HUF.

To protect creditors there are some exceptions to the limited liability rule. If members are found by a court to have abused their limited liability they are responsible for satisfy the debts with their own money and/or property.

NEMES Iván Sándor