Implementation and scope

While Hungary became a member of the European Union only in 2004, the Second Company Law Directive and amendments introduced by Directive 92/101/EEC of 23 November 1992 were already implemented into Hungarian law by Act CXLIV of 1997 on business associations, as later amended several times.

In 2006 Act IV of 2006 on business associations (“the Companies Act”) was enacted. The Companies Act, as from its entry into force, contains the rules implementing the Second Company Law Directive, as amended in 1992. Amendments introduced by Directive 2006/68/EC of 6 September 2006 were implemented into the Companies Act as of 24 October 2007.

The scope of the Second Company Law Directive is limited to public limited companies. The public limited company in Hungary to which the Second Company Law Directive applies is nyilvánosan működő részvénytársaság (Nyrt.), however, some elements of the Second Company Law Directive were extended also to private limited companies (zártkörűen működő részvénytársaság (Zrt.)) and limited liability companies (korlátolt felelősségű társaság (Kft.)).

Application of Hungarian law

The Companies Act applies to companies having their registered seat within the territory of Hungary. “Registered seat” means the registered office, the postal address of the company, where business and official documents are delivered, filed, safeguarded and archived and where obligations prescribed specifically for the company’s registered office are fulfilled (Act V of 2006 on public company information, company registration and voluntary dissolution (“the Registration Code”)).

If the seat of a company is situated within the territory of Hungary, the Companies Act applies to the foundation, organisation and operation of the company, the rights, obligations and responsibilities of the founders and members (shareholders), as well as their transformation, merger, demerger and voluntary dissolution.