As we have described in our previous article, the new Civil Code shall enter into force on March 15, 2014 and the minimum share capital will again be 3 million HUF for limited liability companies. In the meantime, the Parliament has voted the related transitional provisions.
Limited liability companies were given a two-year extension, so their share capital should be raised to 3 million HUF until March 15, 2016 at the latest.
In most cases, the Civil Code will require the modification of the articles of incorporation (articles of association, statutes). Companies can do this without paying duties or publication fee. If a company’s articles of association is amended following March 15, 2014 for any reason, the articles of associations must be adapted to the rules of the new Civil Code. Which also means that the share capital must be increased as well to HUF 3 million in the course of the first amendment. That is, the rule of share capital increase becomes effective immediately. Even those who do not amend their deed of association or do not need to change any data during these two years, have to do this because of the share capital increase until March 15, 2016 at the latest.
Other important information is that the articles of association should be adapted to the rules of the Civil Code in case of general partnerships and limited partnerships as well. The period of grace in this case is one year less: the deadline is March 15, 2015.
If a company fails to do this, a fine may be imposed, the extent of which is expected to be determined by the new Company Act.
Source: Act CLXXVII of 2013
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