Type of Entities in Hungary
Under Hungarian law, entities may be natural or legal persons and associations of persons without legal personality.
From an estate planning perspective, the main types of companies (legal persons) in Hungary:
- general partnership
- limited partnership
- limited liability company
- limited company by shares (public or private)
The most popular Hungarian legal entity that trustees of a foreign trust incorporate is the LLC (Kft.) This has a minimum share capital requirement of HUF3,000,000, which does not need to be paid up in full in cash. The contribution in kind should be provided by the shareholders upon incorporation. There can be a single member (quota holder), either an individual or a legal entity, and there are no restrictions as to nationality or residence.
The “Kft.” is managed by the managing director, who can be an individual or another legal person. There are no restrictions on the nationality, citizenship or residence of the managing director. The minimum number of members and managing directors is one person, which may be the same person (one-person Kft). In principle, under the rules of the limited liability company, the members and the managing director are not liable for the debts of the company with their own assets, but the new Civil Code has increased the personal liability of the manager, who may be jointly and severally liable with the company itself in certain cases provided for by law, for reasons of creditor protection.