How to Change Your Business Structure in Hungary

Investors who want to establish a company in Hungary should know that they are not bound to perform their business activities only through the legal entity they have chosen at the incorporation. In several situations, the legal structure of the company can be changed, as en effect of the modifications appeared during the lifetime of the business. A legal structure can be changed if the investor considers that his or her business will perform better under a new legal entity, which can offer other advantages; our team of Hungarian company formation specialists can provide more information on this matter. 

Sole proprietorship to limited liability company in Hungary

One of the simplest ways to change the legal structure under which the company functions is to turn a sole proprietorship into a limited liability company (LLC), which is the most common type of business registered in Hungary. The sole proprietorship does not distinguish between the company and its founder, which means that the person owning the business can become liable for the debts incurred by his or her business. 

In the situation in which the business develops fast, it is recommended to be represented by another business form, as the sole proprietorship does not provide all the structures of a company, because it is suited for small businesses; our team of Hungarian company incorporation agents can offer more details on when such an action should be performed. 

When you will change the legal entity of the company, different accounting policies may be imposed on the new structure. When changing from a sole trader to an LLC, the accounting procedures will be very different. 

Our accountants in Hungary can present the main differences in procedures, financial documents and financial reports that the new business must maintain in accordance with the applicable law. 

Procedure to change the legal structure

In order to change the current legal structure, the investor is required to de-register the current company from the Commercial Register and to register again under the new legal entity. Companies in Hungary are registered at the above mentioned institution, where the investor is required to submit several documents. 

The company will have to register for tax purposes and receive business permits (if it may be the case. It is also important to open a corporate bank account for the LLC. 

Persons interested in receiving more information on the ways in which a legal structure can be changed in Hungary can address to our team of Hungarian company formation consultants.