Overview of the Company Law Amendments to the Hungarian Civil Code Entering into Force on 1 March 2026

Disqualification, supplementary payments, member liability, and acquisition of quotas through auction – overview of the company law changes to the Hungarian Civil Code effective from 1 March 2026.

The amendments to Act V of 2013 on the Civil Code (the "Civil Code"), entering into force on 1 March 2026, address several issues that have long been debated in corporate law practice. The purpose of the amendments is, inter alia, to eliminate legal uncertainties and to ensure consistency between related pieces of legislation. Below is an overview of the most important changes and their practical implications.

1. Participation of disqualified persons in companies [Section 3:90 (3) of the Civil Code]

The amendment to the Civil Code entering into force on 1 March 2026 resolves the inconsistencies between the Civil Code and Act V of 2006 on Public Company Information, Company Registration and Winding-up Proceedings regarding the participation of disqualified persons in companies.

Pursuant to Section 9/C (4) of the Act V of 2006., a person subject to disqualification may not acquire majority control in a business association, may not become a member with unlimited liability, a member of a sole trader company, nor may such person act as an executive officer, company manager or supervisory board member. According to Section 9/D (2) of the Act V of 2006., the extent of an existing membership interest held at the time the disqualification takes effect may not be increased — whether by transfer for consideration or by gift — unless the resulting interest does not reach the level of majority control, and no influence subject to prohibition may be newly acquired.

By contrast, prior to the amendment, Section 3:90 (3) of the Civil Code — except in the case of public companies limited by shares — generally excluded disqualified persons from holding membership in companies.

This discrepancy arose from the fact that, while the Act V of 2006. — subject to certain limitations — allowed the continuation of an existing membership relationship, the Civil Code excluded such membership as a general rule.

The amendment effective from 1 March 2026 resolves this inconsistency: the revised Civil Code, in alignment with the Act V of 2006., no longer imposes a general obligation to dispose of existing participation, but instead places the emphasis on prohibiting the acquisition or increase of membership interests.

The amendment eliminates the previous uncertainty surrounding the fate of existing membership interests of disqualified persons, while clearly establishing that the acquisition of new participation or majority control — subject to statutory exceptions — is not permitted.

2. Repayment of supplementary payments [Section 3:99/A of the Civil Code]

Supplementary payment (in Hungarian: pótbefizetés) is an additional financial contribution provided by members — either voluntarily or on the basis of a company decision — which does not increase the share capital or registered capital.

The amendment to the Civil Code clarifies the rules governing the repayment of supplementary payments in the event of the company's dissolution without legal succession. Under the new rule, upon dissolution, after the satisfaction of creditors, supplementary payments must be repaid to the members as a priority, and only thereafter may the remaining assets be distributed among members in proportion to their share capital or registered capital contributions.

This clarification resolves earlier uncertainties regarding the distribution of liquidation assets and establishes a clear order of settlement. It should be noted, however, that this rule is dispositive in nature, meaning that the company's corpdocument may provide otherwise within the limits of the law.

3. Member liability in the course of corporate transformation [Section 3:135] of the Civil Code

The amendment clarifies the rules governing member liability in the case of a change in corporate form. If a member with unlimited liability (e.g. a member of a general partnership or limited partnership) becomes a member of a company with limited liability through transformation, such member remains fully liable for the obligations of the predecessor company for a period of five years from the registration of the transformation.

The amendment expressly provides that the obligation to satisfy the debts of the predecessor company remains unaffected by the transformation and continues independently of the member's new — limited— status in the successor company.

4. Acquisition of quotas in enforcement proceedings [Section 3:167/A of the Civil Code]

The amendment introduces a new provision (Section 3:167/A) to the rules governing limited liability companies, regulating the acquisition of quotas sold in enforcement proceedings.

As highlighted in the official reasoning accompanying the amendment, it had previously been debated in practice whether the acquisition of a quota at a judicial auction constitutes an original or derivative mode of acquisition. This distinction is significant because, in the case of derivative acquisition, the general rules of the Civil Code (in particular notification and declaration requirements) apply, whereas in the case of original acquisition, such requirements do not.

The amendment resolves this issue unequivocally: acquisition through auction constitutes an original mode of acquisition. Consequently, the purchaser at the auction becomes a member of the company automatically upon acquisition — without any separate declaration or corporate approval — and the membership relationship is established at the moment of acquisition.

The bailiff notifies both the company and the court of registration of the auction, and the court of registration records the change of membership ex officio with retroactive effect to the date of the auction. The managing director is obliged to register the auction purchaser in the register of members.

The right of pre-emption may still be exercised; however, its enforcement must comply with the rules governing enforcement proceedings.