LET’S MAKE ORDER IN THE JUNGLE OF COMPANY ADDRESS TERMS IN HUNGARY

19 February 2018

In legal texts you can see different terms referring to a company’s address: seat, place of business, premises, branch office, etc. Usually it is very hard to make differences from the context, and some of them seem to mean the same, because the most of the texts don’t tell you a definition. We will. Let’s see, what these words actually mean in Hungary.

1. Seat

Alternative names: headquarters, head office, registered office or registered seat.

All companies must have a seat, and they are allowed to have only one. If the company has only one registered address in the company registry, there is no doubt that that’s a seat.

This is the place where the company has to receive letters, and must provide access to official documents required by law. The address that is marked as “seat” in the company registry will serve as primary contact for authorities. It is also advised to send letters to the seat if we have something to do with a company either as business partners or customers.

The seat must be marked with a company sign so that anybody can clearly see that the company can be found there. It doesn’t have to serve necessarily as the place of actual work. However, one of its obligation is to keep documents, so it is obvious that a post box rented in the post office is not sufficient for a seat.

 

2. Place of central administration

Alternative names: place of central management, main office of central business administration or head office central business administration

The law allows you to limit the tasks of the seat to the required minimum – that means only receiving letters and keeping documents as written in the first point – and do the “real job” (i.e. hold the meetings, make decisions and do administrative work) in a completely different place that is called the place of central administration.

Most of the companies are established with a seat that includes the place of central administration. Chose this 2 in 1 solution if you do not want to overcomplicate the things, and your seat is not just a mere “virtual office”.

 

3. Business Premises

Alternative names: business establishments, place of business

It is possible that companies operate in several places separated from the seat. For example, a retailer who has more offices or shops operates more business premises.

Each place where the company has an activity must be marked as “business premises”, even if the company is not the owner of the place, just leases it.

There is no limitation how many business premises a company may have. The company can create as many as needed. If it is needed, it is all right not to have any business premises at all. It is just a possibility not a must.

 

4. Branch office

Alternative name: satellite office

The name is a little bit confusing, because there is an entity, called “Hungarian branch office of foreign company” (often shortened to: branch office) that is sometimes mixed with the “classic” branch office.

The Hungarian branch office of the foreign company is registered in the company register under its own name, however, it is not an independent legal entity. It is just an office representing the foreign company in Hungary based on a special regulation.

The “classic” branch office is a place where the company does any business activity and it is separated from its seat.

You may think that this definition is exactly the same as the business premises, and you are right. They may be created the same way, and they may serve the same functions.

The only difference is that the business premises must be in the same town as the seat. The branch office is always in a different town.

 

5. Company address

There may be a rare occasion that legal regulations are talking about “the company’s address”. You may be confused which one it is supposed to mean.

Actually, if you see this term, it refers to all the address types mentioned above, if they are registered in the company registry.

Don’t forget to check in the official electronic registry that is available here: https://www.e-cegjegyzek.hu/