The Hungarian Whistleblower Protection Act has entered into force this July. While bigger companies have to operate the internal whistleblowing system since the above date, medium sized businesses (50-250 employees) were given a prolonged period until the 17th of December 2023 to implement the reporting channel. Since the deadline is approaching, we summarize how Hungarian SMEs can comply with the Act
The „start-up capital” of the limited liability company (LLC) is the initial capital which is the totality of the capital contributions provided by the shareholders. In this article we will examine the rules on the capital contribution.
Trade secrets are protected on more levels in Hungary. While the Business Secret Act provides general protection, the Labour Code protects the business secrets of employers in the employment context. Yet this abundance can cause problems when it comes to the question which court is competent to protect employer’s rights in case of theft of trade secrets by an ex-employee. Can an employer file a damage claim against an ex-employee and a competing company as co-defendants in front of the commercial court? Or is it the labour court which is competent to hear the case? A fresh decision of the Hungarian Supreme Court, analysed in this short article, deals with these questions.
Under what conditions can a minority shareholder sue the managing director on behalf of the company if the majority of shareholders do not support the motion? Should these conditions be interpreted restrictively or broadly? This article analyses the above questions in the context of a recent Supreme Court judgment.
This article analyses a recent Supreme Court decision(1) and seeks to answer the following questions: - Can a defendant which is domiciled abroad be sued in Hungary under the EU Brussels Recast Regulation (1215/2012/EU) in the event of defective performance of an international sales contract if the place of performance is abroad? - Can the jurisdiction of a Hungarian court be established based on the fact that a lower court expressly established its jurisdiction at the beginning of the litigation? - How is the Ex Works (EXW) clause to be interpreted within the meaning of the EU Brussels I Regulation?
Black Friday is once again around us: the time when online shops and the consumer protection authority cash in some extra income every year. We guess you’ve already read about the extreme discounts and the record-breaking fines by the authorities, so in our article, we will explain, that without your knowledge, your own business can easily step into the field of consumer protection, in which case, your contracts are subject to special rules. In our article, we show you how you can recognize these situations and, of course, summarize the obligations.
Cross-border online sale of medicinal products is a recurring issue before the Court of Justice of the European Union. This is no coincidence, as trade in medicines is a strictly regulated area in all Member States, which can easily conflict with the EU principle of freedom to provide services, and in the end, the "price" of excessive national restrictions is borne by the consumers. In our article, we summarize the recent ruling of the Court of Justice of the European Union on the limitation of the principle.
Messi hit the legal news again, this time not because of his tax issues. In September, the match between the EUIPO and the world-famous football player, which was ongoing since 2011, finally ended. Messi won the match, as the European Court of Justice ruled that because of his significant reputation, his name can be registered as a trademark despite the fact that it is similar to several earlier trademarks, which is otherwise a ground for exclusion. In our short article, we summarise the details of the case and the legal significance of the decision.
The legal debate surrounding the “infamous” legislative amendment in 2015 introducing the right to unilaterally increase land rents has taken another turn. In its decision this spring, the Hungarian Supreme Court disregarded the previous decision of the Constitutional Court on this matter and omitted the application of the disputed provision when deciding a legal issue. Our article will discuss the significance of the decision, as well as the contradiction between the two highest organs of the judiciary.
The „start-up capital” of the limited liability company is the initial capital which is the totality of the capital contributions provided by the shareholders. Since the shareholders may declare that the capital contribution shall only be provided after the establishment of the company in a later date, the painful situation might occur that the shareholder does not provide or only partly provides the capital contribution. Given that this may create unwanted consequences, the settlement of the capital-related problem is the common interest of the shareholders. In this article we summarize the possible methods to solve this issue.
On 11 March 2020, the Hungarian Government declared a state of emergency in Hungary , which is still in force until revocation. In the last two months, nearly 100 government decrees have been adopted in connection with the pandemic, nearly a third of which are economic measures. In our article, without going into the very details, we summarize the most important measures affecting businesses to give economic operators a comprehensive picture of the benefits and reliefs available in different areas.
Although efforts are being made around the world to curb the spread of the epidemic, it can already be seen that entire sectors of the economy have to face a difficult situation, which is also affecting companies ’contracts. For example, many businesses request the reduction of the rent for the premises they lease for business, due to the coronavirus situation. The question arises as to whether there is another option for amendment if the parties fail to reach a mutual agreement.
The worldwide coronavirus epidemic is causing serious problems in the economy as well, businesses in sensitive sectors fear a total loss of income for months. For this reason, the Hungarian Government introduced a ban on termination and rent increase for commercial lease contract in case the lessee operates in specific, sensitive sectors. However, there are several legal uncertainties surrounding the measure, which will be discussed in our brief article.
You can hear a lot of stories where the debtor “escaped with the money”, the construction contractor “disappeared” or the debtor company’s assets have been hidden. Essentially, failure to pay is a breach of contract, which is subject to civil action, eg. litigation. However, if a transaction is suspected to be a scam, criminal proceedings may be brought against the defaulting debtor, for example, for fraud, which we examine in this article.
For companies operating internationally or with foreign background, it is common to work with documents in a foreign language and to sign corporate documents and contracts abroad. Although it is insignificant in the daily life of a company, the situation is different if you want to use a document signed abroad or in foreign language in a litigation or in other legal proceedings, as the foreign document has to comply with special rules. In our short article we will summarize what should you consider if you want to use foreign documents before the Hungarian authorities.
Even winning a lawsuit and having the positive judgment in your hands are of no use if the debtor company is terminated in the meantime. In this case, the "winning" judgment will only be a worthless piece of paper, despite that you have spent a fortune on debt recovery. In this short article, we summarize the most important rules and deadlines so that you can avoid staying empty-handed at the end of the debt collection in Hungary despite winning the lawsuit.
It has been one of the most annoying things for Hungarian companies that they had to pay Value Added Tax (VAT) in case of unpaid claims as well, so even if the invoice has never been paid by the business partner. Fortunately, from 2020, the above rules will change, and it will be possible to refund the VAT already paid on uncollectible claims. In our article we summarize the details.
One of the annoying things in business is when your invoices are not paid by your business partners. After getting bored of their excuses, there comes a time when you have to put pressure on your debtor. At that point, you either entrust a law firm or turn to one of the many debt collection agencies offering “simple and cheap, yet efficient” solutions. Are the latter solutions really that effective? Is it worth entrusting a debt collection agency in Hungary? In our article, we bring up three reasons why hire rather a law firm in Hungary instead collection agencies.
The initiation of a liquidation procedure is an effective debt collection method, since the debtor may only avoid being liquidated by paying the claim if the conditions specified in the Act on Bankruptcy Proceedings and Liquidation (Bankruptcy Act) are met. For this reason, in the case of liquidation, one of the most common defences of the debtor is the reference to offsetting. But can the debtor refer to offsetting without limitation during liquidation? In our short article we answer this question.
In business, signing a contract or making a declaration on behalf of a company is daily task. During this “routine” process, the parties often do not check whether the signatory of the other party can represent the company. Is the contract valid in Hungary if the signatory has no signing authority, or it is limited? Who, what and from whom can claim in such a case? In our article, you will find the answers to these questions.
If you believe that the highest judicial forum of the EU only deals with matters that are far from everyday life, you have missed the recent decisions of the Court of Justice of the EU. Last year, the Court has drawn significant conclusions on copyright in a case concerning the taste of a cheese product, and now, in a legal dispute surrounding a returned mattress, the Court gave important guidance on online purchases. The decision concerns both consumers and sellers, so our short article is worth reading for everyone.
In case of leasing an office, warehouse or other industrial property, lessees often make significant investments to the premises, which can easily result in a dispute when the contract is terminated. From our article, you can learn what should you to take into account as a lessor in relation to investments made by lessees.
Changing your supplier is a common situation in business. Can you switch between suppliers without restrictions, if there is no fixed term or exclusive contract? Do you have to purchase from the supplier during the notice period? What are the risks of failing to give purchase orders? In our article, we answer the above questions by analysing the Hungarian judicial practice.
It has not been a good start for McDonald’s this year, as in January, the news that the major company has lost its EU trademark protecting BIG MAC spread like wildfire. Since the decision can be subject to an appeal, it would be premature to consider the loss of the trademark as a fact, however, the lesson can already be drawn, which we present in our article along with the details of the case.
Which artworks are protected in the European Union by copyright? Due to the constant development of technology and art the answer shall be reconsidered from time-to time. In our article we address this question on the basis of the landmark judgments of the European Court of Justice delivered in the field of copyright.
The Court of Justice of the European Union has ruled in a case, where the main question was whether the taste of a cheese product may be eligible for copyright protection under EU law. We summarize the case and answer the question what constitutes a “work of art” under EU copyright law.
On 1st January 2019 the Act on the Control of Investments Detrimental to the Interests of Hungarian National Security entered into force. On the basis of the new law investors who are considered as “foreign” have to report their newly acquired interest in Hungarian companies. Pursuant to the Act, the Minister of the Interior may prohibit the acquisition or may withdraw the right of the company to pursue a certain activity. In our article, we summarize the most important information regarding the new law.
The Christmas shopping fever began with Black Friday in late November, and not only the buyers are trying to exploit this period of discounts, but also the sellers. During this season the Competition Authority is also curious about the incredible sales and should they find any breach, their “surprise” to the seller will be a fine of ten millions of HUF. During the inspections of recent years, big companies have been caught in the authority's net such as Extreme Digital, Media Markt, Alzo or Lidl. If you are a seller or operate an e-shop, it is as easy to slip into a legal pitfall as slipping on ice. That's why we've collected the most important rules for discounts attracting customers and how to operate a compliant e-shop. Thus, you can avoid paying your end-of-year earnings to the Competition Authority.
When we talk about work, employment relationship comes to everyone’s mind first, although you can work for someone’s interest in other ways outside the “9-5”, monthly paid job system, for example by an engagement contract. Whether you are an employer or an employee, you need to know what the differences are between the two most common forms of working, especially because in some cases the employment authority or the court may re-classify the engagement as employment and may impose a significant fine on the principal.
If business secrets are mentioned, most people think of big companies and tenders worth millions. Nevertheless, not only big companies are affected by leaks of confidential information, causing serious disturbance and financial loss. If you think this problem cannot affect your business, this article is for you. In our article, we will show you what can be considered as a a business secret, how you can protect this information, and what are your options when the breach has already occurred.
There are many requirements for international road transportation. These usually concern the carrier, but in some cases you also have obligations as a recipient and failure to comply with them may result in a fine. In this article, we tell you how you can avoid the “fine trap” set by the authority, in case your company is waiting for a shipment from outside the EU.
We are no longer keeping it secret: in August, the new law on the protection of business secrets entered into force, which, unlike the fragmented rules that have been applied so far, will protect business secrets and know-how in Hungary more uniformly and effectively. We summarize the most important aspects of the new law in our article.