Hungary

The Corona Crisis leads worldwide to critical situations for companies.
In light of this, Digitorney has asked lawyers from various countries specialized in restructuring law for recommendations on what needs to be done and which solutions are at hand to weather the Corona Crisis.
This part of our series focuses on Hungary:

1) When does a company need to file for insolvency in Hungary?

Under Hungarian law, there is no such obligation for the companies to commence insolvency proceedings. Companies may initiate bankruptcy or liquidation proceedings voluntarily. It is possible to open a liquidation proceeding if the company is unable or unwilling to enter into bankruptcy. The petition for liquidation shall be submitted in possession of the prior consent of the management. MORE

2) What liability risks exist for the management in Hungary in a corporate crisis?

There is a general rule on the liability of management in case of the companies’ dissolution without success. This means that, if the management fails to take the creditors’ interest into account after insolvency takes place, the management shall be liable for damages up to claims outstanding on the ground of non-contractual liability. MORE

3) Is there any state aid available for companies in Hungary due to the Corona crisis?

The Hungarian Government has announced the economy protection action plan in April 2020. The action plan is under revision now, in the following, we summarise the main points of the economy protection action plan as of 20 April 2020: MORE

4) What immediate measures should a Hungarian company take if it is affected by the Corona crisis?

The Hungarian government recently introduced facilitation measures in the field of company law to provide a more convenient way for companies in the decision-making process.  For example, a decision-making body might hold its meeting by electronic communication means or adopt resolutions without holding meetings. In addition to this, the acceptance of the company’s report can be carried out by electronic communication means or other electronic means suitable for identification. MORE

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