DON’T BE A VICTIM! – CHECK YOUR BUSINESS PARTNER

13 June 2017

Global businesses belongs to our everyday life. We enjoy the advantages of our modern world, however, we must never forget its dangers. In this article we draw your attention to those basic points we suggest to check before doing business with a Hungarian company, to avoid losing money. Some of them may seem evident, however, our advices are based on real cases.

Does the company really exist?

If you start business negotiation with a Hungarian company, don’t forget to check if it really exists. You can check the official company registration database for free at this homepage: www.e-cegjegyzek.hu

This is the official homepage. Any other database may seem good but they are often not up to date. Unfortunately, the official website is available only in Hungarian, but the built in translation of some browsers can be quite good, and makes it easy to handle.

You can search by name, company registration number, tax number, and seat address. Please note, that if you search by name, the search function works with the beginning of the names. So if the company is called “The Company Ltd.” and you type “Company”, there will be no search results.

If the company has “cs.a.” or “f.a.” or “kt.a.” behind its name, that means there is a bankruptcy procedure, liquidation or involuntary liquidation procedure ongoing against them. Never do business with such a company before asking your lawyer!

Stolen company identities

Even if you check a company if it really exists, it may happen that somebody misuses the company’s data and creates a fake webpage. Before you get in touch with a company through its webpage, please check the company behind it.

Please don’t rely only on the data and links seen in the webpage. We have seen fake homepages that were linked to other fake pages to make you trust them. Try to search the company also with search engines, like Google. If you get the same results, the homepage is more likely safe.

To give you an example, visit www.danubisoft.hu which is a real site, and a fake homepage using the company’s identity: www.danubisoftkft.com

Am I talking to the right person?

Please remember that only the legal representative of a company can act on behalf of the company. You can check this person on the website we marked in the first point, on www.e-cegjegyzek.hu

After you open the company certificate, scroll down to point 13. That is where you can see the legal representatives.

If the person you are talking to is not listed there, that person is not the representative of the company, and can’t sign any documents on behalf of the company.

Checking the identity

If you are doing business with a person you haven’t met before, don’t forget to check his or her identity. Hungarian nationals can identify themselves with passport, ID card or driving license.

You can check the valid forms of these documents on the following links:

• passport: http://www.consilium.europa.eu/prado/EN/prado-documents/hun/a/index.html
• ID card : http://www.consilium.europa.eu/prado/EN/prado-documents/hun/b/index.html
• driving license: http://www.consilium.europa.eu/prado/EN/prado-documents/hun/f/index.html

Apart of checking the photo and name, please pay attention to the characters, especially if you receive the document electronically. Fake documents are not always done with perfect Photoshop skills, so you can notice with a little extra care. This is an example for fake Hungarian passport, taken from a real case:

Dangers at payments

Please never pay to any company without invoice. All Hungarian invoices must have the seller’s tax number.

The form of the tax number looks like: 12345678-2-42. You can check the validity of the tax number on www.e-cegjegyzek.hu after opening the certificate and scrolling down to point 21. It indicates not only the tax number, but also its validity.

If you do business with a Hungarian company, always make payment to its Hungarian bank account. The IBAN number of the bank account shall begin with HU. All Hungarian companies must have a Hungarian bank account, and you can check it in the company registry, on www.e-cegjegyzek.hu after opening the certificate and scrolling down to point 32. where you can see the valid bank account of the company.

Other risks

The list above provides a minimum level of security in business. There may be further information that is worth to look up:

• the financial background of the company
• ongoing procedures in the present and past against the company
• the shareholders’ and managing directors’ background
• companies having the same shareholders and / or managing directors in the present or in the past
• companies registered with the same address
• registered activities of the company

If you would like to get a detailed profile of your business partner, we suggest asking a Hungarian lawyer.