Founding your enterprise in Hungary is one of the tasks you cannot complete without a lawyer. As a law office most experienced in corporate affairs hereby we would like to summarize the basics of creating a limited liability company – as known as Kft.
Kft. is one of the most popular corporate form (think of LLC in the USA, GmbH in Germany, s.r.o. in Slovakia, SRL in Romania, etc.) and with a reason: it provides safety for the owners but also for the business partners who would like to sign contracts with the company. According to the Act V of 2013 on the Civil Code, “Limited liability companies are business associations founded with an initial capital (subscribed capital) consisting of capital contributions of a predetermined amount, in the case of which the members’ obligations to the company extend only to the provision of their capital contributions, and to other possible contributions as set forth in the articles of incorporation. With the exceptions defined by law, members shall not bear liability for the company’s obligations.”
In Hungary, the steps of creating a Kft. start with the deed of foundation in case it is a sole-member company and with the articles of association if there are two or more members. For concluding the deed of foundation or the articles of association the following data has to be provided:
- Details of the company
- e-mail address
- amount and composition of the capital (minimum 3.000.000,- HUF)
- scope of activities
- Details of the persons involved such as members and executives (in case it is another company, the data described in section 1)
- place and date of birth
- mother’s name
- tax number
The second step is the preparation of all the documents, which is our task as lawyers. We prepare all the necessary paperwork and send it to the founders for checking.
Once all the preparations described above are settled, it is time to sign all documents. This has to be done in the presence of the lawyer, who has to check the validity of the involved persons’ identity – this also has a small fee.
After signing the documents, our law office would file them in an electronic copy to the Court of Registry, and the registration shall take place within 8 workdays (usually it is 2-3 days).
Important to note, that within 8 days after registration the managing director shall open a bank account and transfer the capital to the account.
In case you have legal or practical questions related to companies, please do not hesitate to contact us!