Tuesday, 29 March 2016

Increased capital requirements under the Civil Code

On 15 March 2017 the grace period relating to the increased capital requirements of the new Civil Code will expire.

The new Civil Code took effect on 15 March 2014 and it introduced a number of amendments to the regulation of corporations. Among other things the requirements for the minimum share capital were increased, accordingly the minimum share capital of HUF 500,000 previously defined for LLCs is increased to HUF 3 million according to the new Civil Code. Registered companies must apply the amendment by the first modification in their Articles of Association following 15 March 2014, in case of LLCs by 15 March 2017 at the latest (the originally two years transitional period was amended to three years at the beginning of this year).

Practically, this means that in case of LLCs where it was not necessary to make amendments in their Articles of Association in the last years, must increase their share capital potentially up to sixfold.

Please do not hesitate to contact our advisors at LeitnerLeitner (office@leitnerleitner.hu) regarding your questions on the changing of the capital structure. For our further services you may also visit our website or our Hungarian blog.