Stock Corporation

General Information

The Rt. offers the advantages of liability limited by shares, relatively easy transfer of shares and access to stock markets. It is therefore usually chosen by larger businesses. Statutory governance structure and rules on capital protection are particularly strict.

Incorporation

A Rt. may either be operated as a private or a public Rt. Hence, it must be founded either by means of deed of foundation (private Rt.) or subscription of its shares (public Rt.).
The articles of association, together with other documents of procedural nature, must be delivered to Corporation Court for filing, within 30 days from their adoption. The company comes into legal existence immediately upon registration.

Duration of incorporation of at least 30 working days (statutory minimum).

Incorporation costs: Stamp duty of approximately HUF 600,000 (€ 2,400) in case of a public Rt. and HUF 100,000 (€ 400) in case of a private Rt. plus a HUF 25,000 (€ 100) publication fee in both cases.

Capitalisation and Financing

The statutory minimum share capital amounts to HUF 20,000,000 (approximately € 80,500). Contributions can be made either in cash or kind. Prior to incorporation, all contributions in kind must be made available and at least 30 per cent of each share but at least HUF 10,000,000 must be paid up. Remaining cash contributions must be paid up within one year after registration.

Board Structure

A Rt. is managed and represented by its board of director(s) (igazgatóság) in and out of court. The board may consist of between three and 11 members, generally appointed by the shareholders' meeting. The manner of management and representation has to be decided upon in the articles of association. Managing directors cannot be instructed by shareholders' meeting.

Shareholders' decisions are made by way of shareholders' resolutions at the annual or extraordinary shareholders' meeting (közgylűés). The shareholders' meeting is the governing body of the Rt. and as such solely competent to decide upon the most important company matters (e.g. concerning balance sheet, increasing and reducing stated capital, limiting managing authorisation).

A Rt. must have a supervisory board (felügyelő bizottság).

Annual Costs

Approximately € 100 (filings, publications, etc.).

Corporate Taxation and Financial Reporting

Resident companies are subject to corporation tax on net profits. General tax rate is 16 per cent of tax base; the Corporate Tax Act as of Jan. 1, 1997 provides for numerous exceptions, however.

Annual accounts must consist of balance sheet, profit and loss account and notes on the account. The annual financial statements must generally be drawn up in accordance with Hungarian GAAP. The accounts must be drawn up at and deposited with the Court of Registration within 150 days of the balance sheet date of the subject year.

Employee Participation in Corporate Bodies

If workforce exceeds 200 on an annual average level employees shall be allowed to elect one third of the members of the supervisory board.