Types of Hungarian Companies

The Hungarian Law regulates many types of trading companies, allowing foreign investors to guide themselves by the same rules as national entrepreneurs. As in most countries, the most common form of business is represented by the Hungarian Limited Liability Company, followed by limited and general partnerships and Joint Stock Companies.

a) The Hungarian Limited Liability Company (LLC, or KFT in Hungary, added after the name of the Company)
In Hungary, the Limited Liability Company is established by one or more persons, based on capital contribution of the members, including cash or other types of contributions. Shareholders can limit their liability to their percentage of ownership, defined by the capital invested in the company and they are not liable to the obligations of the company. If the company consists of only one member the minimum required capital is 100.000 HUF (Hungary Forint, the currency of Hungary), if there are more members that made contributions to the foundation of the company, the minimum capital may not be less then 100.000 HUF for member.

 b) The Hungarian Limited Partnership (LP, or BT in Hungary, added after the name of the Partnership)
The members of a LP undertake joint business activity and at least one general partner has unlimited liability for the obligations of the company. The Limited Partnership has no legal status and has limited partners which expose their liability to the extent of their capital contribution, monetary or non-monetary. According to the Hungarian law, only the general partner is entitled to represent the partnership, unless the company's articles of association state otherwise. The partnership may evolve, and transform into a Limited Liability Company.

c) The Hungarian General Partnership, or unlimited Partnership (GP, or KKT in Hungary, added after the name of the Partnership)
In a General Partnership the liabilities of all members are unlimited for the partnership's obligations, as all members who make monetary or non-monetary contributions are considered general partners and have the right, given by Hungarian law to represent the company, unless the articles of the company's association state otherwise. A General Partnership does not have a legal status, is not required a minimum capital and must have at least two members.

d) The Joint Stock Company, or Company Limited by Shares (JSC, or RT in Hungary, added after the name of the company)
The Hungarian Joint Stock Company is founded on the basis of shares which have a predetermined nominal value. The shareholders have the obligation to provide the issue value of the shares and they are not liable to the company's obligations, according to the general rule of the Companies Act. In Hungary the Joint Stock Company can be public or private, which means the shares of the public Joint Stock Company are marketed to the public, while the shares of a private JSC are not available for the public. The minimum required capital for a public JSC is 20 million HUF, while for a private 5 million HUF is needed.