A recently passed law amends the Companies Act at various points. The rules of prohibiting a company representative from the position gained in complexity.
According to the text of the Companies Act currently in effect, the court of registry shall prohibit a person who was a managing director; a member with unlimited liability; or a majority shareholder of a company at the time the forced dissolution procedure started or in the previous year. The period of the prohibition is currently 5 years.
The new law brings more sophisticated provisions to the institution of prohibition. On one hand, it specifies the cases of forced dissolution (dissolution due to unknown seat and due to withdrawal of tax number) when such prohibition is applicable following the dissolution procedure.
On the other hand, as a general rule, the prohibition will only be applicable if the relationship between the person and the company existed at the time the dissolution procedure started. If the person was a managing director, member of the company with unlimited liability or had majority in the company during the year before the dissolution procedure started, the prohibition will only be applicable if the amount of the claims against the company exceed 100,000 Hungarian Forints and if there is information on the omissions of the company from the preceding year. Current provisions do not contain requirements on the amount of claims.
Detailed provisions will come into effect regarding the period of the prohibition which will be adjusted to the amount of claims. If the claims against the company did not exceed 500,000, – HUF, the person may only be banned for 1 year, if the claims are between 500,000 and 3,000,000, – HUF, this period shall be 3 years and in case of claims exceeding 3,000,0000, – HUF, the period shall be 5 years.
The new provisions will allow the court of registry to dispense the prohibition if the person demonstrates the measures (s)he has taken in order to cause the company to comply with its obligations.
Anyone who would like to lodge a claim against a company under forced dissolution will have to submit additional information. Not only the amount of the claim should be specified in the claim but the legal title of the claim and also the date of incurrence and the due date. The new rules shall apply also in case the company was terminated following a liquidation procedure that was preceded by a procedure of forced dissolution.