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About Limited Partnership in Hungary |
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The limited partnership is one of the most popular form among business associations in Hungary. According to the rules of the Company Act such a business association can be established in order to engage jointly in business operations. The founders of the limited partnership can be either Hungarian or foreign legal and natural person. The person mentioned above can also join the limited partnership. If you decide to establish a limited partnership in Hungary you will need at least two members, at least one general partner and one limited partner. If you have already chosen the partners, the attorney-at-law shall draft the memorandum of association of your partnership. The deed of association can be drafted according to the sample described in the annex of the Company Act, although the sample restricts your possibilities to make the deed fit to your business demands. Whatever form of deed you choose, all members have to sign it and it must be implied to a contract countersigned by an attorney-at-law. You can authorize another person to represent you at the signing of the deed, although in this case the authorization must be notarized (or apostilled in relation to some countries). All data prescribed by the Company Act must be implied in the deed of association, such as:
As to the scope of activities some sort of business activity can be practiced only after the obtainment of the permit of the relevant authority. As to the capital of the limited partnership there is no prescription by the law regarding the minimum amount of the capital. The foundation of the company must be notified to the company court within 30 day from the signing of the deed of foundation. The company is obliged to open a Hungarian bank account, and it must be requested a so called tax-number from the Tax Authority within 15 days from the date of submission of corporate documents to the company court. If the company fails to fulfill its obligation a fine may be imposed on it by the Tax Authority. The company gains his legal existence on the date of registration to the company registry. The limited partnership has plenty of substantive legal features, which differs from other sort of companies. Such a feature is that limited partnership consists of one or more general partner and limited partner. The sense of distinction between general partner and limited partner lies in the rights and obligations of them. The most significant difference appears with regard to the responsibility for the debts of the company. The responsibility of the general partner is unlimited regarding the debts of the company, so he is liable to the countervalue of his own assets, while the limited partner is only liable to provide the countervalue of his shares described in the deed of association. The company will not ceed automatically after the secession of all general partners and limited partners from the company. In the latter case the law provides a 6 months grace period, during which period new members may join he company or it can alter to a general partnership. Budapest, July 2008
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