March 15, 2017 is the deadline for the mandatory increase of the registered capital

Limited liability companies with registered capital below HUF 3 million shall increase their capital until March 15, 2017 the latest; concurrently, the entities shall also decide on continuing operations in accordance with the provisions set forth in the Civil Code and simultaneously amend the deed of foundation as per compliance to the new rules.

The capital may be increased by cash or in-kind contributions, or by both of them. The increase of the capital shall be accounted with the date of the court’s registration.

It is possible to provide the cash contribution at a later date if the deed of foundation allows so, however if the time limit of the contribution is over one year, as long as the contribuiton is not performed the company shall not be allowed to pay any dividend and the members shall bear liability for the company’s debts up to the unpaid part of their cash contribution.

In case there are no other changes to be registered as regards to the company, the amendments as per compliance to the Civil Code will be registered without any procedural fee. Should the company not submit the registration of the obligatory amendments within the deadline, the court will initiate a legal supervision proceeding, in which the court will impose a fine of between HUF 100,000 and 10 million payable by the company or by the executive officer if there is an evidence to indicate that the reason for judicial review is attributable to him. The court may impose the fine repeatedly.

If the company do not wish to increase it’s registered capital, until March 15, 2017 it is possible to decide on the company’s transformation to other corporate form (eg. to limited partnership with no obligatory capital minimum) or to merger with other companies.