Closing a company in Hungary
The purpose of company liquidation in Hungary is to dissolute a company and satisfy the claims of its creditors. The legal grounds for company liquidation are set forth in the Bankruptcy Act. Any company in Hungary that wants to end its activities needs to observe the proceedings for this purpose as described by law.
The liquidation of a Hungarian company begins after a local court decides that the company is insolvent. The insolvency can be declared based on a few conditions and the process can be initiated by the company itself or at the request of a creditor, if the company has outstanding debts.
Our company formation experts in Hungary can help you if you want to wind up a company in this country.
The liquidation process in Hungary
A company is declared insolvent through a court order if the legal entity is unable to pay its debts to a creditor within 15 days from the due date of a payment notice received from the creditor as per a contractual obligation. Insolvency can also be declared if the company failed to pay its debts after receiving a court order to do so or if the company failed to comply with its obligations set forth in a bankruptcy procedure.
If one of these conditions applies to a Hungarian company, then the court can order the liquidation of the company within 60 days after the receipt of the request. The court also appoints a liquidator that will handle the process. Once the liquidation of a Hungarian company is published in the Companies Gazette it becomes final and binding.
Options for dissolving a company in Hungary
The liquidation procedure is a way of ensuring that the company is closed in a proper manner and all of the remaining debts have been satisfied. It is possible to satisfy the creditor’s claims through negotiation and amicable understanding and thus the legal disputes can be avoided.
The liquidation of a company can last for several months. Our Hungarian company formation specialists can assist you throughout the entire procedure and can offer you details about other ways to end the activity of a company, like filing for bankruptcy.
The procedure will need the assistance of a team of accountants in Hungary, who can verify the company’s financial documents throughout the entire liquidation procedure.
Companies can also benefit from a simplified liquidation procedure since 2018, in certain conditions. This is available for companies that can complete the procedure in a period of 150 days since the initiation of the liquidation.
For more information about company liquidation in Hungary, please do not hesitate to contact our company formation experts in Hungary.