IJJAS LAW FIRM
MANAGING DIRECTOR IN HUNGARY
In Hungary the executive officer shall manage the operations of the company under an agency contract or an employment contract, according to his agreement with the company. It is also important to note, that executive officer shall manage the operations of the company autonomously, complying with the overruling priority of the interests of the company. In this capacity, the executive officer shall be bound by law, by the instrument of incorporation and the resolution of the supreme body of the company. The executive officer shall not be instructed by the members of the company and the supreme body shall not deprive him of his powers. The sole member of a single-member company may instruct the management, and the executive officer shall carry out these instructions.
COMPANY MANAGERS IN HUNGARY
The supreme body of the company may appoint one or more company managers to assist the executive officers in their work. Company managers shall perform their functions under an employment contract. Company managers shall be employees who direct the continuous operation of the company according to the instructions of the executive officer. The grounds for exclusion and conflict of interests regarding executive officers shall apply accordingly to company managers. In addition to the company manager having general powers, the supreme body of the company or, based on the authorisation of the supreme body, the management may appoint company managers with limited powers acting at establishments and branches of the company.
CONFLICT OF INTERESTS
Except for shares in public companies limited by shares, executive officers shall not acquire shares and shall not be executive officers in companies which are engaged in an economic activity as their main activity that is identical to that of the company in which they hold an executive office. If the executive officer takes on a new mandate for another executive office, he shall notify, within fifteen days of taking on the new office, all the companies in which he already serves as an executive officer or a supervisory board member. With the exception of transactions covering common everyday needs, executive officers and their relatives shall not conclude, in their own name and on their own behalf, contracts falling within the scope of the main activity of the company.
REPRESENTATION OF THE COMPANY
The company shall be represented by its executive officers and its employees authorized to represent it in writing, by their signatory right. The management of the company may confer general powers of representation upon the company manager.
The company manager and the employee authorized to represent the company shall not validly transfer their right of representation to others.
LIABILITY FOR DAMAGES OF EXECUTIVE OFFICERS TO THE COMPANY
If, at the request of the executive officer, the supreme body of the company gives, simultaneously with approving the account, a discharge certifying the compliance of management activities during the previous business year, the company may only enforce its claim for damages against the executive officer for the violation of management obligations if the facts and information underlying the waiver were false or incomplete. If the mandate of the executive officer at the company terminates between two consecutive meetings dealing with the account, the executive officer may request the supreme body to discharge him at the following meeting. After the termination without succession of the company, those who were members at the date of the deletion of the company may enforce their claim for damages against the executive officers within a term of preclusion of one year following the deletion of the company. Upon the termination of the company, members may claim damages to the extent of their rightful share in the assets distributed.
LIABILITY OF EXECUTIVE OFFICERS TO THIRD PARTIES
If the company terminates without succession, creditors may enforce their claim for damages up to the amount of their outstanding claims against the executive officers of the company according to the rules on extra-contractual liability if the executive officer concerned failed to take the interests of the creditors into consideration when a condition threatening to cause insolvency in the company emerged. This provision shall not apply in the event of termination by winding up.
MANAGEMENT OF A LIMITED LIABILITY COMPANY
A Limited Liability Company shall be managed by one or more managing directors. Restrictions on or division of the managing directors’ right of representation, or their declarations being made subject to condition or approval shall not be effective against any third party. In the event that a company is managed by more than one managing director, the managing directors may act independently in management issues, with the proviso that they may object to the measures planned or taken by other managing directors. In such cases, the members’ meeting shall decide on the objection and the planned measure shall not be carried out before the decision of the members’ meeting is adopted. If, under the memorandum of association, all members are entitled to manage and represent the company, the members complying with the rules on executive officers shall qualify as managing directors.
If a company no longer has an executive officer, any member shall be entitled to convene the members’ meeting or initiate decision-making without holding a meeting. If members fail to meet this provision within thirty days following the change then, at the request of a member or creditor, the court operating the register shall convene a members’ meeting or delegate the requesting member to convene it or carry out decision-making without holding a meeting.