IX.

Act CXLIV of 1997

on Business Associations

 

PART 2:

 

Chapter VII.
Termination of Business Associations with Legal Succession (Transformation)

Title 1.
Joint Regulations on Transformation

Section 59.
(1) Unless otherwise provided in this Chapter, the regulations pertaining to the foundation of business associations shall apply to the transformation of a business association into a different business association.
(2) Merger (consolidation, acquisition merger) and demerger (division, separation) of a business association shall also qualify as transformation of a business association.
(3) Business associations may also transform into non-profit companies (Point 7 of Chapter VI of the Civil Code).
(4) Unless otherwise provided by law, upon transformation according to this Chapter, additional tax or duty obligations shall not result.
Section 60.
(1) Business associations undergoing liquidation or voluntary dissolution may not transform into another business association.
(2) Business associations may resolve transformation into a different business association only if the members (shareholders) thereof have fully provided their contributions as set forth in the articles of association (deed of foundation, statutes).
(3) With the exception of the merger of companies limited by shares, only a close company limited by shares may be founded through transformation.
(4) Business associations being established through transformation may not operate as a pre-company. Therefore, the date of the legal successor business association starting operations may not be an earlier point in time than the day following registration of the business association. Until registration of the legal successor business association, the business association shall continue its activity in its registered form of business association. The fact that the transformation is in progress shall be expressly indicated in the documents of the business association and in the course of its legal transactions.
(5) In the course of the transformation, special rights or benefits granted to certain members (shareholders) shall be entered in the articles of association (deed of foundation) of the business association being established, unless the member (shareholder) concerned expressly waives such right or benefit in writing.
Section 61.
(1) If, on the basis of the data from the report prepared pursuant to the Accounting Act, a business association does not possess equity corresponding to the subscribed capital prescribed for its form of business association in two consecutive years, and the members (shareholders) of the business association do not provide for the necessary equity within a period of three months after approval of the report prepared pursuant to the Accounting Act for the second year, the business association shall be required to resolve transformation into a different business association.
(2) In the course of transformation, a form of business association shall be chosen, for which the Act does not specify a minimum amount of subscribed capital, or for which the subscribed capital can be satisfied by the business association by transformation.
Section 62.
(1) The business association"s supreme body shall pass a resolution on the transformation on two occasions.
(2) On the first occasion, based on the proposal of the executive officers and the supervisory board, the business association"s supreme body shall establish whether the members (shareholders) of the business association agree on the intent to transform, shall assess in advance which of the members (shareholders) of the business association intend to become a member (shareholder) of the legal successor business association, and shall resolve into what form of business association the business association shall transform.
(3) If the business association"s supreme body agrees on transformation, the executive officers shall prepare, as at a reference date defined by the business association"s supreme body, the draft source and application of funds statement and the draft inventory of assets of the business association undergoing transformation, the (opening) source and application of funds statement, the draft inventory of assets and the draft of the articles of association (deed of foundation) of the business association being established through transformation, as well as the proposal on rendering accounts with the persons not intending to take part in the legal successor business association as members (shareholders). The members of the legal successor business association shall be entitled to conclude the articles of association (to approve the deed of foundation) of the legal successor business association.
(4) The draft source and application of funds statement of the business association being established through transformation may differ from the draft source and application of funds statement of the business association undergoing transformation:
a) by the contribution of new members (shareholders) joining the business association simultaneously upon transformation;
b) by the contribution of existing members (shareholders) to be provided subsequently, imposed as a condition of transformation;
c) by the proportion of the assets due to members (shareholders) not intending to take part in the business association being established through transformation.
Section 63.
(1) The draft source and application of funds statements shall be prepared in accordance with the methods and in the balance sheet format of the report prepared pursuant to the Accounting Act. The balance sheet of the report prepared pursuant to the Accounting Act may also be accepted as the draft source and application of funds statement of the business association undergoing transformation if the reference date thereof is no more than six months earlier than the second decision on the transformation.
(2) A business association undergoing transformation may re-evaluate its assets and liabilities as shown in the balance sheet of the report prepared pursuant to the Accounting Act.
(3) The detailed regulations of preparing draft source and application of funds statements, draft inventories of assets and those of the re-valuation, as well as the provisions on the establishment of the planned equity and subscribed capital of the business association being established through transformation are included in the Accounting Act.
(4) The draft source and application of funds statements and draft inventories of assets shall be examined by an auditor and, if a supervisory board operates at the business association, by the supervisory board. The auditor of the business association is not entitled to conduct this examination. The auditor who examined the draft source and application of funds statements of the transformation may not be appointed as the auditor of the business association being established for a period of three years after registration of the business association. The value of the assets of the business association and the amount of its equity may not be established at a value which is higher than the value determined by the auditor.
Section 64.
(1) The business association"s supreme body shall resolve on the approval of the drafts set forth in Subsection (3) of Section 62 following preparation of such. A period longer than three months may not elapse between the reference date of the draft source and application of funds statements and the date of such decision, with the exception of the case contained in Subsection (1) of Section 63.
(2) The employees" interest representation organs operating at the business association shall be informed of the decision on transformation.
(3) On the basis of the data from the draft source and application of funds statements and the proposal of the executive officers, the share of planned subscribed capital due to members (shareholders) of the business association being established through transformation shall be established, furthermore, the share of assets due to members (shareholders) not intending to take part in the legal successor business association, and the disbursement thereof shall be established in detail. Accounts shall be rendered with respect to the ratio of equity as per the draft source and application of funds statement to former subscribed capital, and that of equity to the balance sheet grand total.
(4) If, after appropriating the amount due to members (shareholders) not intending to take part in the legal successor business association, the equity as per the draft source and application of funds statement of the business association being established through transformation does not reach the minimum amount of subscribed capital as set forth in the Act, transformation shall be considered to have failed, unless in the interest of such transformation, the members (shareholders) of the legal successor business association themselves make the difference available to the business association prior to the application for registration.
(5) The share of assets due to members (shareholders) not intending to take part in the legal successor business association shall be disbursed within a period of thirty days after registration of the business association being established through transformation, unless an agreement with the persons concerned specifies a later point in time.
Section 65.
(1) The business association shall initiate the publication of an announcement on the decision on its transformation at the Company Gazette within eight days after the decision set forth in Subsection (1) of Section 64. Such announcement shall be published in two consecutive issues of the Company Gazette.
(2) Such announcement shall contain:
a) the name, registered office and company registration number of the business association undergoing transformation;
b) the form, name and registered office of the business association being established;
c) the date of concluding the articles of association (approving the deed of foundation);
d) the key data from the draft source and application of funds statement of the business association undergoing transformation and the draft source and application of funds statement of the business association being established, in particular, the amount of equity and subscribed capital, and within the latter, the share of contributions in cash and in kind;
e) the activity of the business association being established;
f) the name and domicile of the executive officers of the business association being established;
g) notice to the creditors (Section 66).
Section 66.
(1) Transformation shall not result in the expiration of claims outstanding against the business association undergoing transformation.
(2) Those creditors, whose unexpired outstanding claims against the business association undergoing transformation originated prior to the first publication of the resolution on the transformation, may demand security up to the amount of their claims from the business association undergoing transformation within a thirty day non-appealable deadline following the second publication of said resolution.
(3) If the liability of a member (shareholder) for the obligations of the business association undergoing transformation is limited during the existence of the business association, the provision included in Subsection (2) shall be applied only if the subscribed capital of the business association being established through transformation is lower than that of the legal predecessor business association as at the time of making a decision on transformation.
Section 67.
(1) The business association being established through transformation is the legal successor of the business association undergoing transformation. The legal successor business association shall be entitled to the rights of the legal predecessor business association, whereas the obligations of the legal predecessor business association shall pass to the legal successor business association, including the obligations contained in the collective agreement concluded with the employees.
(2) If an application of the business association for the issue of an official license is in progress, the business association shall report the decision on transformation to the authorities issuing such license without delay. The holder of the official license shall be the legal successor business association, unless such legal successor fails to meet the conditions for the official license.
Title 2.
Regulations for Individual Forms of Business Associations
Section 68.
(1) If a business association has resolved its transformation into a limited liability company, non-profit company or company limited by shares, the provisions on the share of the contribution in cash and contribution in kind need not be applied when establishing the initial capital (share capital) of the legal successor business association or non-profit company.
(2) In the cases set forth in Subsection (1), in the draft source and application of funds statement of the legal successor business association, those assets shall be identified which will constitute the subscribed capital of the legal successor business association on the basis of the proportionate value of the equity to the balance sheet grand total.
(3) In addition to the items listed under Subsection (2) of Section 65, in the case of transformation into a company limited by shares, the type, category (class) and face value of the shares, and the name and domicile of the supervisory board members, whereas in the case of transforming into a non-profit company, the public service activity shall also be indicated in the announcement of transformation, respectively.
Section 69.
(1) If a company limited by shares transforms into a different business association or non-profit company, when resolving the transformation as defined in Subsection (3) of Section 64, a decision must also be reached on the conversion of bearer shares to registered shares. The shares shall become invalid upon the registration of the business association being established through transformation, and the executive officers of the legal successor business association shall provide for the application of the legal consequences of such invalidity within thirty days after receipt of the resolution ordering such registration. In the course thereof, the provisions of Section 263 shall apply correspondingly.
(2) If a limited liability company transforms into a non-profit company, alteration of the articles of association of the business association undergoing transformation shall suffice in lieu of preparing a draft for the articles of association of the business association being established through transformation.
Section 70.
If a business association transforms into a limited partnership, the amount of contribution of the limited partners shall also be included in the announcement of transformation, in addition to the items listed under Subsection (2) of Section 65.
Section 71.
(1) If an unlimited partnership transforms into a limited partnership, or a limited partnership transforms into an unlimited partnership, alteration of the articles of association of the business association undergoing transformation shall suffice in lieu of preparing a draft for the articles of association of the business association being established through transformation.
(2) A change in the form of business association as set forth under Section 104 shall not qualify as transformation.
Title 3.
Merger of Business Associations
Section 72.
(1) In the course of the merger of business associations, the joint regulations on transformation and the regulations on the form of business association being established through transformation shall be applied with the deviations included in Sections 73-75. Mergers may take the form of acquisition merger or consolidation.
(2) Following the resolution on transformation, the executive officers of the business associations involved in the merger shall provide all information to the members (shareholders) of such business associations regarding the affairs of the business associations related to the transformation.
(3) On the basis of the decision of the business associations involved in the merger, the same independent auditor may act in the course of the examination of the draft source and application of funds statements for all business associations.
(4) If any of the business associations are not be entitled to certain rights (e. g. the right to issue shares) from among the combining business associations, only those business associations which possessed such rights may be considered as legal predecessor with respect to the exercise of such rights.
(5) In the course of mergers, the provisions of the Act on the Prohibition of Unfair Market Behavior and the Restraint of Competition on the supervision of the interpenetration of enterprises shall also be applied.
Section 73.
(1) In respect of acquisition mergers, the target business association shall terminate and its assets shall devolve to the acquiring business association as legal successor, whose form of business association shall remain unchanged.
(2) In respect of acquisition mergers, the face value of the participation of the target business association in the acquiring business association shall be disregarded when establishing the subscribed capital of the legal successor business association.
(3) In respect of acquisition mergers, the initial capital (share capital) of an acquiring limited liability company or company limited by shares may not be increased by the value of own capital contributions or the face value of shares owned by the target business association.
(4) In respect of acquisition mergers, the initial capital or share capital of the acquiring limited liability company or company limited by shares may not be increased by the value of those capital contributions or the face value of shares of the target business association which are owned by the acquiring business association.
(5) The value of the participation indicated under Subsections (2)-(4), or the value of the capital contributions or shares may no longer be included in the draft source and application of funds statement of the business association being established.
Section 74.
(1) In respect of consolidations, the combining business associations shall terminate and their assets shall devolve to a new business association being established as legal successor through transformation. In the course of consolidation, only business associations having the same form of business association may choose a different form of business association for the legal successor business association. In all other cases, the legal successor business association may only be established in the form of business association of one of its legal predecessors.
(2) In respect of consolidations, the value of own capital contributions and the value of shares of the business associations, as well as the value of their mutual participation shall be disregarded when establishing the subscribed capital of the legal successor business association. In such cases, the provisions of Subsection (5) of Section 73 shall be applied.
Section 75.
(1) In respect of all forms of business associations, if the business association"s supreme body has resolved in favor of the merger, the executive officers of the combining business associations shall prepare the draft merger agreement, in which the following shall be defined:
a) the name, registered office and company registration number of the combining business associations, the form, name and registered office of the business association being established;
b) the method of merger, the date of concluding the articles of association (approving the deed of foundation, statutes) of the legal successor business association;
c) in respect of acquisition mergers, the necessary alterations in the articles of association (deed of foundation) of the acquiring business association;
d) in respect of consolidations, the draft of the articles of association (deed of foundation) of the new business association.
(2) In addition to the items listed under Subsection (2) of Section 65, the method of merger shall also be indicated in the announcement of transformation (merger).
Title 4.
Special Regulations on the Merger of Companies Limited by Shares
Section 76.
(1) A public company limited by shares may be established through merger only if the acquiring business association is a public company limited by shares, or the combining business associations are public companies limited by shares.
(2) In the event of a merger of companies limited by shares, in addition to the items listed under Subsection (1) of Section 75, the following shall also be defined in the merger agreement:
a) the share exchange ratio of the merging companies limited by shares;
b) the detailed rules for the transfer of the shares of the acquiring business association;
c) the point in time, following which the shares are entitled to a portion of after-tax profits;
d) the rights granted by the legal successor business association to the shareholders invested with special rights (in particular, with regard to the benefits due to founders, or the rights attached to preference, employees" or interest-bearing shares) or to the holders of other securities, as well as the proposal on arrangements related thereunto.
(3) Simultaneously upon preparation of the merger agreement, the executive officers of the combining business associations shall prepare a written report in which the necessity of the merger and the share exchange ratio are justified on the basis of legal and financial considerations. If the assessment met with particular difficulties, such shall also be stated. Upon the request of shareholders and at the cost of the business association, full or summary copies of the documents accessible to shareholders shall be prepared.
(4) The auditor preparing the draft source and application of funds statements shall make a statement on what methods the company limited by shares used for establishing the exchange ratio set forth in Paragraph a) of Subsection (2), what value each of these methods resulted in, and whether the exchange ratio is correct in his opinion. If the assessment met with particular difficulties, such shall also be stated.
(5) The auditor acting in accordance to the provisions of Subsection (4), or any other expert independent of the merging companies limited by shares shall make a statement, in a report prepared on commission by the companies limited by shares, regarding the sound foundations of the contents of the draft merger agreement, and the written report of the executive officers. Such statement shall also contain an opinion on whether the planned merger endangers the satisfaction of creditors" claims outstanding against the companies limited by shares.
(6) In respect of convertible bonds, the company limited by shares being established through the merger shall provide such entitlements to bond holders, which are at least equivalent to the entitlements they possessed in the legal predecessor business association, unless each of the bond holders gives his consent to the change of entitlement. Holders may also claim the redemption of convertible bonds or bonds with subscription rights issued by the combining business associations from the legal successor company limited by shares. The provisions of this Subsection need not be applied if, upon the issue of the security, the position of bond holders in the case of an eventual merger had been defined in advance.
Section 77.
(1) Thirty days prior to the date of the general meeting resolving the approval of the merger agreement, the draft merger agreement, the written report prepared by the executive officers of the merging companies limited by shares, and the report of the auditor or independent expert containing his opinion on the draft merger agreement and on the written report shall be submitted by the companies limited by shares involved in the merger to the court of registration keeping the register of merging companies limited by shares.
(2) For a period of thirty days prior to the second general meeting resolution on the merger, all shareholders of the business associations involved in the merger shall have the right to become acquainted with the contents of the reports of the combining business associations prepared pursuant to the Accounting Act over the previous three years, in addition to the documents prepared for the resolution of the general meeting.
(3) If there are several categories or classes of shares, Section 238 shall be applied correspondingly when passing a resolution on merger.
(4) Based on corresponding application of the provisions contained in Subsection (2) of Section 66, creditors of companies limited by shares involved in the merger may demand security if they certify that such merger endangers the basis of satisfying their claims, provided that the companies limited by shares involved in the merger have not granted security to such creditors at an earlier point in time.
(5) The provisions contained in Subsections (2)-(5) of Section 76 and Subsections (2)-(3) may not be applied if the acquisition merger or consolidation takes place between companies limited by shares, in the case of which either of the companies limited by shares operates as a single-member business association of the other company limited by shares.
Title 5.
Demerger of Business Associations
Section 78.
(1) In the course of the demerger of business associations, the joint regulations on transformation and the regulations on the form of business association being established through transformation shall be applied with the deviations included in Sections 78-79. Demergers may take the form of division or separation.
(2) The supreme body of business associations may resolve the demerger of the business association into several business associations. A public company limited by shares may not be established through demerger.
(3) In respect of divisions, the business association being divided shall terminate and its assets shall devolve to the business associations being established as legal successors through transformation.
(4) In respect of separations, the business association from which separation is effected, shall continue to operate in its previous form following alteration of the articles of association (deed of foundation, statutes), while a new business association shall be established with the participation of the separating members (shareholders) and use of a part of the assets of the business association.
Section 79.
(1) In addition to the provisions of Subsection (2) of Section 62, the business association"s supreme body shall also examine which legal successor business association the members (shareholders) of the business association intend to become a member in.
(2) The executive officers of the business association shall prepare the draft terms of demerger, in which the following shall be defined:
a) the form, name, registered office and company registration number of the demerging business association, and the name and registered office of the business associations being established;
b) the method of demerger, and the date of concluding the articles of association (approving the deed of foundation) of the business associations being established through the demerger;
c) the proposal on the distribution of assets, that is, the distribution of the assets of the business association among the members (shareholders) of the demerging business association and the principles thereof, as well as the proposal on the division of the rights and obligations of the demerging business association;
d) in respect of separations, the necessary alterations in the articles of association (deed of foundation) of the remaining business association, as well as the draft of the articles of association (deed of foundation) of the business association being established through separation;
e) in respect of divisions, the draft of the articles of association (deed of foundation) of the new business associations being established.
(3) The legal successors of demerging business associations, including those business associations from which separation was effected, shall be liable for the obligations of the business association originating prior to demerger in proportion to the distribution of assets.
(4) If any of the assets has not been provided for in the demerger agreement, such an asset or the value thereof shall be due to all legal successor business associations in proportion to the distribution of assets. If an obligation becomes known only after the agreement, liability of the legal successor business associations shall be joint and several. The legal successor business associations shall bear joint and several liability even if, despite providing for an obligation in the demerger agreement, the business association obliged on the basis of the demerger agreement fails to discharge such obligation.
(5) In addition to the items listed under Subsection (2) of Section 65, the following shall also be defined in the announcement of transformation (demerger):
a) the method of demerger;
b) the key provisions of the agreement on the division of the rights and obligations due to the demerging business association, in particular, the proportion of such division;
c) notice to the creditors.
(6) In the event of the demerger of a company limited by shares into companies limited by shares, the provisions contained under Title 4 shall be applied correspondingly.
Title 6.
Duties Following the Registration of Transformation
Section 80.
(1) Upon registration of the legal successor business association, with the exception of the legal predecessor business association in the case of separation, and the acquiring business association in the case of acquisition merger, the legal predecessor business association shall be canceled from company registration records.
(2) Within a period of ninety days after registration of the business association being established through transformation, a final source and application of funds statement and inventory of assets shall be prepared as at the date of registration, both for the legal predecessor business association and the legal successor business association. A positive difference between the equity defined in this source and application of funds statement and in the draft source and application of funds statement shall be accounted for as assets over the subscribed capital, whereas in the case of a negative difference, unless the assets over the subscribed capital provide cover for such, the subscribed capital shall be reduced. The detailed regulations on the final source and application of funds statement and inventory of assets are contained in the Accounting Act.
(3) If the court of registration refuses to register the transformation, or the final judgment ordering registration is repealed, the business association intending to transform shall continue to operate in its previous form.
PART TWO
REGULATIONS PERTAINING TO INDIVIDUAL FORMS OF BUSINESS ASSOCIATIONS

Chapter VIII.
Unlimited Partnerships

Section 81.
(1) By virtue of articles of association for the establishment of an unlimited partnership (hereinafter referred to in this Chapter as "partnership"), the members of the partnership undertake to pursue joint business-like economic activities with unlimited, joint and several liability, and to make available to the partnership the contribution necessary for such activities.
(2) The designation "unlimited partnership" (közkereseti társaság), or its abbreviation "kkt.", shall be indicated in the company name.
Foundation of Partnerships
Section 82.
In addition to the items listed under Section 11, if so required, the method and content of the personal assistance undertaken by the members, and the rules of the operation of the members" meeting shall also be set forth in the articles of association.
Internal Legal Relations of Partnerships
Section 83.
(1) No member shall be required to increase his contribution in excess of the amount set forth in the articles of association, or to supplement such contribution in the event of loss.
(2) No member may reclaim his contribution or the value thereof during the existence of the partnership or his membership therein.
Section 84.
(1) Members of partnerships may assist personally in the activity of the partnership.
(2) Members may be entitled to remuneration for their personal assistance.
Section 85.
(1) Partnerships shall prepare a year-end report pursuant to the Accounting Act. The meeting of members shall pass a resolution on the approval of the report and on the appropriation of after-tax profits.
(2) Unless otherwise provided by the articles of association, profits and losses shall be distributed among the members in proportion to their contributions. An agreement on the exclusion of any of the members from the profits or from the bearing of losses shall be null and void.
Management, Representation
Section 86.
(1) Unless otherwise provided by the articles of association, all members shall be entitled to the management of the partnership, without the restrictions contained in Subsection (3) of Section 22 and Subsection (1) of Section 24.
(2) In the articles of association, the members may entrust one or several members with the management, in which case the other members shall not be entitled to management.
(3) A member of the partnership with legal personality shall provide for the management by means of a natural person entitled to represent such legal person.
(4) The personal requirements related to executive officers shall be applied to the members entrusted with management and the representatives of members with legal personality.
Section 87.
(1) Each member entitled to management may act independently. Members entitled to management may object against the planned measures of another member entitled to management. In such cases, with the exception of urgent measures, the measure concerned may not be taken until the meeting of members passes a resolution thereon.
(2) The articles of association may provide that several members entitled to management may only act collectively. If the members fail to agree, any of them shall be entitled to request a decision on the issue by the meeting of members. However, urgent measures may also be taken independently by the members entitled to management. All other members entitled to management shall be informed of such measures without delay.
Section 88.
The members entitled to management shall represent the partnership, and shall exercise their right to sign for the partnership in accordance with the contents of the articles of association.
Supreme Body of Partnerships
Section 89.
(1) The supreme body of an unlimited partnership is the meeting of members, in the activity of which all members take part in person. The articles of association may provide that a members" meeting function as the supreme body of the partnership. In this case, the articles of association shall contain the rules on calling members" meeting and on the order of procedure of passing resolutions.
(2) The meeting of members (members" meeting) shall pass resolutions on all issues not falling within the scope of management which are assigned to the competence of the supreme body of the partnership by legal regulations or the articles of association, or which do not belong to the ordinary business activity of the partnership.
(3) In the course of passing resolutions, each member shall have an equal vote. The articles of association may contain provisions to the contrary, but each member shall have at least one vote.
(4) The meeting of members (members" meeting) shall pass resolutions by a simple majority of the votes calculated in comparison to the number of all eligible votes, with the exception of those issues, in the case of which this Act or the articles of association stipulate a unanimous vote or a majority of three-quarters of the votes.
(5) A resolution passed by the unanimous vote of all members shall be required to alter the articles of association, as well as to decide upon issues not belonging to the ordinary business activity of the partnership.
(6) Alterations of the articles of association shall be signed by all members.
Legal Relations of Partnerships with Third Parties
Section 90.
(1) A partnership shall be primarily liable for its obligations with its assets. If the assets of the partnership do not cover an obligation, the members shall bear unlimited, joint and several liability with their private property for the obligations of the partnership.
(2) Judgments of guilt may be passed or execution may be levied on the assets of the partnership without members being involved in the proceedings, however, such may be passed or levied on the private property of members only with their involvement in the proceedings. Without prejudice to their subsidiary liability, members may also be sued together with the partnership.
(3) The liability of a member joining the partnership for the obligations originating prior to his admission shall be identical to that of all other members. Any agreement to the contrary shall be null and void against third parties.
Section 91.
For the purposes of security or payment, creditors of members may not make use of any assets or rights representing pecuniary value transferred to the property of the partnership by a member. Only that portion of the assets shall cover the claim of the creditor which is due to the member upon the termination of the partnership or his membership. If the creditor had execution levied on such portion of the assets, the member may exercise his right to ordinary notice, but may not claim the disbursement of the share of assets due to him in kind.
Termination of Membership and Partnerships
Section 92.
Membership shall terminate:
a) if the member fails to provide his contribution defined in the articles of association despite an order to this effect;
b) upon joint agreement of the members;
c) upon exclusion of the member;
d) by ordinary notice;
e) upon termination with immediate effect;
f) upon death or termination of the member without legal successor;
g) if the existence of such is in violation of the law.
Section 93.
(1) Members may terminate their membership in writing with a notice period of three months in a partnership founded for an indefinite period of time (ordinary notice). Any exclusion or restriction of this right shall be null and void.
(2) If the expiration of the notice period falls at an unsuitable point in time, the other members may extend the notice period by an additional period of three months at the most.
Section 94.
Members may terminate their membership in writing with immediate effect, indicating the reason, if any other member of the partnership commits a severe breach of the articles of association, or behaves in a manner which seriously endangers cooperation with such member or the achievement of the purpose of the partnership.
Section 95.
(1) Accounts shall be rendered with members withdrawing from the partnership according to the situation existing at the time of termination of membership.
(2) Unless the partnership and the member agree otherwise, the claim of a member withdrawing from the partnership shall be disbursed in cash within a period of three months after termination of membership.
Section 96.
Based on an agreement with the members of the partnership, the heir of a member who has died may join the partnership as a member. If such agreement fails, the provisions of Section 95 shall be applied correspondingly to rendering accounts with the heir. Accounts shall be rendered with the legal successor of the member according to Section 95 even if the legal successor decides not to become a member of the partnership.
Section 97.
(1) For a period of five years after termination of their membership, members withdrawing from the partnership shall bear the same liability as all other members for such obligations of the partnership against third parties which originated prior to the termination of their membership.
(2) The heir of a member who has died shall, if he does not join the partnership, be liable for the obligations of the partnership originating prior to the member"s death in accordance with the rules of liability for the testator"s obligations. This provision shall be applied correspondingly to the legal successor of terminated members.
Section 98.
(1) If, as a result of termination of membership, the number of the members of the partnership declines to one, the partnership shall terminate only in the event that no new members are reported to the court of registration within a three month non-appealable deadline.
(2) If a partnership terminates on the grounds set forth in Subsection (1), a person in charge of voluntary dissolution shall be appointed by the court of registration.
Section 99.
A unanimous resolution of the members shall be required to resolve termination without legal successor or transformation of the partnership.
Section 100.
(1) In the event of termination of a partnership without legal successor, voluntary dissolution may be carried out in simplified procedure if the partnership settles all its debts within a period of thirty days after the resolution of the partnership on the commencement of voluntary dissolution. In such cases, the person in charge of voluntary dissolution need not be reported to the court of registration until reporting the completion of voluntary dissolution. The court of registration shall then provide for cancellation of the partnership and publication of such fact.
(2) In the event of termination of a partnership without legal successor, unless otherwise provided by the articles of association, assets remaining after settlement of all debts shall be distributed among the members in proportion to their contribution.

 

Chapter IX.
Limited Partnerships

Section 101.
(1) By virtue of articles of association for the establishment of a limited partnership (hereinafter referred to in this Chapter as "partnership"), the members of the partnership undertake to pursue joint business-like economic activities in a way in which the liability of at least one member (general partner) for the obligations not covered by the assets of the partnership is unlimited, and is joint and several with all other general partners, while at least one other member (limited partner) is only obliged to provide the contribution undertaken in the articles of association, and, with the exceptions set forth in this Act, is not liable for the obligations of the partnership.
(2) The designation "limited partnership" (betéti társaság), or its abbreviation "bt.", shall be indicated in the company name of the partnership.
(3) Unless otherwise provided by this Chapter, the regulations on unlimited partnerships shall apply to limited partnerships.
Section 102.
With the exception of the case contained in Subsection (1) of Section 103, limited partners are not entitled to the management of the partnership. However, limited partners may also take part in the activity of the meeting of members (members" meeting).
Section 103.
(1) Limited partners shall bear the same liability as general partners if their names appear in the company name of the partnership.
(2) If a limited partner has not provided his contribution indicated in the articles of association, or has provided such only in part, he shall be liable with his private property up to the value of the contribution not provided.
Section 104.
(1) If all general partners withdraw from the partnership, the partnership shall terminate, unless
a) admission of a new general partner is reported to the court of registration within a period of three months after withdrawal of the last general partner, or
b) the limited partners decide to continue operation of the partnership as an unlimited partnership, and
alteration of the articles of association in accordance with this is submitted to the court of registration within the deadline set forth in Paragraph a).
(2) If all limited partners withdraw from the partnership, the partnership shall terminate, unless
a) admission of a new limited partner is reported to the court of registration within a period of three months after withdrawal of the last limited partner, or
b) the general partners decide to continue operation of the partnership as an unlimited partnership, and
alteration of the articles of association in accordance with this is submitted to the court of registration within the deadline set forth in Paragraph a).
(3) In the event of termination of a partnership pursuant to Subsections (1)-(2), a person in charge of voluntary dissolution shall be appointed by the court of registration. In such cases, limited partners may also be appointed as the person in charge of voluntary dissolution.
Section 105.
In the cases contained in Section 104, accounts shall be rendered with the general or limited partners not intending to take part in the continued operation of the partnership as an unlimited partnership pursuant to the provisions of Section 95.

 

Chapter X.
Joint Enterprises

Section 106.
(1) Joint enterprises (hereinafter referred to in this Chapter as "enterprise") are business associations founded by members which first and foremost are liable for their obligations with their assets. If the assets of the enterprise do not cover any debts, the members shall, in proportion to their contribution, bear joint liability for the debts of the enterprise as guarantors.
(2) The designation "joint enterprise" (közös vállalat), or its abbreviation "kv.", shall be indicated in the company name of the enterprise.
Title 1.
Foundation of Enterprises
Section 107.
(1) In addition to the items listed under Subsection (1) of Section 11, the following shall also be defined in the articles of association:
a) the extent of voting rights, and the method of exercising such;
b) the rules on distributing after-tax profits and bearing losses;
c) the conditions for disbursing the share of assets due to a member upon his withdrawal;
d) the order of distributing the assets remaining after termination of the enterprise.
(2) If so required, the articles of association shall provide for the following:
a) the services representing pecuniary value (ancillary services) owed by members, the contents and conditions thereof, as well as the amount of penalty payable in the event of the non-performance or insufficient performance of ancillary services;
b) the establishment of a value limit, above which transactions shall fall within the competence of the council of directors.
Section 108.
(1) Members of an enterprise shall pay their contribution in cash, provide their contribution in kind, and perform the ancillary services undertaken.
(2) In addition to providing their contributions, members of an enterprise may undertake to perform other services representing pecuniary value (ancillary services). Members may be entitled to separate remuneration for such services.
(3) Unless otherwise provided by the articles of association, profits and losses shall be distributed among the members in proportion to their contributions.
Title 2.
Organizations of Enterprises
Section 109.
(1) The supreme body of an enterprise is the council of directors. Members may be represented through representatives. The director, supervisory board members or the auditor may not be representatives. Authorization shall be drawn up in a notarial document or private document representing conclusive evidence.
(2) The following shall fall within the competence of the council of directors:
a) formation of the internal organization, and the order of management and supervision of the enterprise;
b) approval of plans related to business administration;
c) approval of the enterprise"s report pursuant to the Accounting Act;
d) decision on the appropriation of after-tax profits;
e) passing of resolutions which define tasks to be implemented in the business administration of members;
f) resolution of termination without legal successor or transformation of the enterprise;
g) approval of members joining the enterprise, and approval of the restriction of the liability of new members;
h) consent to the transfer of membership rights;
i) election and removal of the director, as well as the exercise of employer"s rights related to the director;
j) if a supervisory board operates at the enterprise, the appointment thereof, withdrawal of its mandate, and establishment of remuneration;
k) if an auditor operates at the enterprise, the appointment thereof, withdrawal of his mandate, and establishment of remuneration;
l) alteration of the articles of association;
m) initiatives to exclude a member;
n) decisions to conclude or amend a contract, the value of which exceeds the value limit set forth in the articles of association, or which is concluded by the enterprise outside its ordinary activity with one of its members;
o) decision on all issues which are assigned to the competence of the council of directors by this Act or the articles of association.
Section 110.
(1) The council of directors shall hold its meetings as necessary, but at least once every year.
(2) Meetings of the council of directors, indicating the agenda, shall be called by the director. The director shall provide for the organization and completion of the meeting, the keeping of minutes and the distribution of the resolutions.
(3) The following shall be entered in the minutes: the place and time of the meeting, the persons present and the extent of voting rights represented by such persons, significant events, statements and resolutions taking place during the meeting, the number of votes cast for and against such resolutions, and persons abstaining from or not taking part in the vote.
Section 111.
(1) The council of directors has quorum if members representing three-quarters or more of the votes are present at the meeting.
(2) Unless otherwise provided by the articles of association, voting rights shall be due to members in proportion to their contributions.
Section 112.
(1) Unless otherwise provided by the Act or the articles of association, the council of directors shall pass its resolutions by a simple majority of the votes present.
(2) A majority of three-quarters of the votes shall be required to decide on the issues listed under Paragraphs a), b), f), g), h), l) and m) of Subsection (2) of Section 109.
Section 113.
(1) The council of directors may pass resolutions without holding a meeting.
(2) The draft of resolutions proposed outside a meeting shall be communicated to the members of the council of directors in writing, setting a deadline of fifteen days, who shall cast their votes in writing. The director shall inform the members of the result of the vote in writing within eight days after receipt of the last vote.
(3) Upon the request of any of the members of the council of directors, a meeting shall be called to discuss the draft resolution.
Section 114.
(1) Management and representation of an enterprise shall be carried out by the director within the framework of the articles of association and the resolutions of the council of directors.
(2) The council of directors may stipulate that the exercise of certain employer"s rights related to managerial employees of the enterprise be subject to its own consent.
Title 3.
Admission of Members; Termination of Membership
Section 115.
(1) According to the conditions contained in the articles of association, members may also enter an enterprise following its foundation (admission).
(2) The council of directors shall pass a resolution on the approval of admission, and shall decide simultaneously on the due date of the obligations attached thereto and the degree of the voting rights of the new member.
Section 116.
(1) New members shall be liable for the obligations of the enterprise originating prior to their admission. Upon admission, new members may restrict their liability by a declaration to the council of directors. If such declaration is approved, the new members shall be liable for the obligations originating prior to his admission only to the extent of his contribution.
(2) The fact, date and restriction of admission pursuant to Subsection (1) shall be entered in the register of companies. Restrictions are valid against third parties.
Section 117.
(1) Membership shall terminate
a) if the member has not provided his contribution defined in the articles of association despite an order to this effect;
b) upon withdrawal of the member;
c) upon death or termination of the member without legal successor;
d) upon exclusion of the member;
e) if the existence of such is in violation of the law.
(2) Members may withdraw from the enterprise at the end of the year. Intention to withdraw shall be reported to the council of directors (board of directors) at least three months in advance.
(3) With the exception contained in Subsection (1) of Section 119, a member withdrawing from the enterprise shall be liable for the obligations of the enterprise originating prior to his withdrawal for a period of five years thereafter.
Section 118.
(1) Accounts shall be rendered with withdrawing members according to the situation existing at the time of their withdrawal. The council of directors shall decide when and in what installments the share of assets due to the withdrawing member is to be disbursed.
(2) The date of disbursement shall be established on the basis of the report of the enterprise prepared pursuant to the Accounting Act, in such a manner that disbursement does not endanger the continued operation of the enterprise, and the period thereof is three years or less.
(3) If disbursement does not take place upon withdrawal of the member, a proportionate share of after-tax profits shall be due to the withdrawing member according to his portion of assets yet to be disbursed.
Section 119.
(1) With the consent of the council of directors, withdrawal may take place through transferal of the membership rights to another member. In this case, the liability of the withdrawing member for the obligations originating prior to his withdrawal shall pass to the new member acquiring such membership rights.
(2) If the member terminates or dies, the provisions of Section 118 shall be applied correspondingly to render accounts with the legal successor (heir) of the member. If, however, the legal successor (heir) intends to continue the activity of the member, he may become a member of the enterprise with the consent of the council of directors. In this case, the provisions of Subsection (1) shall be applied correspondingly to the liability of the new member.

Section 120.
In the event of termination of an enterprise without legal successor, unless otherwise provided by the articles of association, the assets remaining after settlement of all debts shall be distributed among the members of the enterprise in proportion to their contribution.