Another change allows the executives of such companies to be held personally liable for harm deliberately caused third parties.

LLCs incorporated before 15 March 2014 have until March 2016 to raise their capital equity to HUF 3 million. Existing LLCs wishing to amend or modify their incorporating documents after 15 March 2014 must meet the new requirements immediately. Such modifications include change of address or the changing of the managing director(s).

The new rules state that a company’s profits can be used to raise equity capital over the next two years. Companies choosing this method must raise their capital to HUF 3 million prior to paying dividends and prior to owners receiving management fees, payment for raw materials, or rent.

According to Napi.hu, approximately 210 thousand companies will be affected by the new requirement.

The personal liability of a company’s executive(s) is also affected by the new civil code. Executives can be held personally liable for any damage or harm committed in connection with the capacity of their position. AIG executive Peter Alfoldi told Napi.hu the purpose of this rule is to serve as a deterrent against executives who hide behind the limited liability of the company when intentionally causing harm or injury to third parties.

Akos Menyhei, a partner at Hajdu es Menyhei Law Office, tells Nol.hu the new civil law states that a company and its executive(s) are jointly and severally liable for any injury-causing act committed outside the confines of a contract.

Source: BudapestBeacon.com

Republished with permission.