Category: Hungary

A fast-track analysis by the Hungarian Competition Authority (GVH) has found that in many cases, companies’ advertising communications suggesting sustainability are not backed up by easily accessible and relevant evidence for consumers. The result of the fast-track analyses was disclosed on 17 February 2023.

In November 2022, GVH launched a detailed market analysis to investigate the discrepancies between the actual content of different sustainability advertising messages and the way they are perceived by consumers. With this, GVH aimed to provide legislative input for the introduction of a coherent system of claims and labelling, which would enhance consumer trust. As part of the market analysis, GVH carried out a comprehensive sweep of 60 domestic websites.

The results of the analysis show that domestic businesses communicate sustainability in a very broad and unsystematic way. According to GVH, generic statements (“green”) are common, as well as that the explanation and substantiation of a claim in Hungarian is only available to the consumer in English. Undertakings try to justify their sustainability ambitions without specifics (“by buying, you are contributing to our environmental goals”). Many businesses use logos to demonstrate their “green” credentials, but the certification body or criteria behind them are not always identifiable to consumers. And in the case of certain grammatical adjectives (“more sustainable”), it is not clear to what extent the product has a more positive impact on the environment.

GVH’s investigation also identified good practices to follow. Examples include a “sustainability glossary” to help interpret green claims or a transparent and understandable presentation of the company’s environmental activities. Consumers can also be better informed through validated annual sustainability reports available on the website, provided they are transparent and well-structured. GVH’s comprehensive market analysis is expected to be completed in the summer of 2023.

ByEszter Kamocsay-Berta, Managing Partner, KCG Partners Law Firm

EU Directive 2019/1937 on the protection of persons who report infringements of EU law was adopted in 2019 and should have been transposed into national law by the Member States until 17 December 2021. The Directive obliges the Member States to set up a three-step notification system.

First step is the so-called internal notification channel, whereby the notifier reports the infringement within the legal entity. Second step is the so-called external notification channel, whereby the notifier communicates the infringement to the competent national authority.

Third step is the publication of the infringement. The transposition of the Directive had not progressed smoothly; only 8 Member States have transposed the Directive into national law by the deadline.

In view of this, on 28 February 2023 a bill was submitted to the Hungarian Parliament with the aim of establishing the Hungarian rules in line with the provisions of the Directive (bill no. T/3089.) The bill requires employers with 50 or more employees to operate an internal abuse reporting (or whistleblowing) system. Employers with 50-249 employees may jointly establish an internal abuse reporting system. As a general rule, all public sector entities must set up an internal abuse reporting system (municipalities with less than 10 000 inhabitants and municipal bodies or public bodies with less than 50 employees are exempted).

The bill lays down the guarantee rules for the functioning of the internal whistleblowing system, the main issues related to the making, receiving and handling of whistleblowing reports, including the rules for monitoring the functioning of the internal whistleblowing system. In order to ensure external control, the operation of the whistleblowing system will be subject to the supervision of the Commissioner for Fundamental Rights.

By Eszter Ila-Horvath, Attorney at Law, KCG Partners Law Firm

At the beginning of March 2023, the Ministry of Construction and Transport published the concept of the Act on Hungarian Architecture for public consultation. The new act would include, as a clear code, the act on the chambers of the designer and expert engineers and architects, the Building Act, the acts the protection of the townscape and on the protection of cultural heritage with updated content.

The concept sets out 7 priority aims such as improving the quality of life, preserving and protecting the built heritage and green spaces and strengthening the role of landscape architecture. Furthermore, the new act also determines construction principles for instance the principles of preserving the natural environment and digitalization.

The concept states the changes in the regulation of chamber membership. With a few exceptions, engineering and architectural designer and expertise activities will be subject to chamber membership. The bill proposes a 3-level system of chief architects including the national chief architect, the state chief architect and the municipal chief architect. The concept contains that all local governments with an urban status will be obliged to employ their own chief architect from 1 January 2025. The organisation of the design council would follow the 3-level system of the chief architects. The concept also proposes the creation of a national landscape architect position, who will assist the work of the national chief architect. In addition to the simple notification, for all buildings and landscaping works, compulsory designers’ liability insurance will be introduced and regulated by a government decree in order to ensure the effective protection of the builders.

As a part of the protection of the townscape, modifications would be introduced in the regulation of advertising by establishing that advertisement may only be placed in a place, of a size and in a form that does not harm the characteristic, valuable or traditional architectural image. The new act also places great emphasis on the protection of historic monuments. Considering the historic monument protection, there will be further benefits provided by the state. For instance, there will be 50% personal income tax relief on the income from the letting of a residential building under monumental protection or instead of the 4% property transfer duty, only a 2% transfer duty must be paid when selling a residential building under monumental protection.

In the area of procedural rules, there are numerous modifications planned as well. The validity period of the building permit will be changed to 10 years, during which construction will be allowed. This will allow the builder to carry out the construction activity at any time during the scope of the building permit. The new act would also transform the simple notification into an acknowledgement procedure. The planned date of the preparation of the new act on the Hungarian Architecture is 1 July 2023.

By Lidia Suveges, Attorney at law, KCG Partners Law Firm

Companies who are the victims of trade secret thefts by their employees in Hungary are protected on more levels: in addition to relying on the Business Secret Act, they can invoke the Labour Code, as well.Less clear is to which court should employers turn to in case they decide to sue their former employee and the competitor, employing the latter. Is the commercial court or the labour court the right forum? We analyse the question in the light of a recent judgment of the Hungarian Supreme Court.

Facts

The claimant complained that its ex-employee and its competitor as co-defendants induced certain employees of the claimant to terminate their employment and work for the claimant’s competitor. To this end, the claimant’s ex-employee disclosed a set of data to the claimant’s competitor in relation to the targeted employees such as their salary and other working conditions.

The claimant filed a claim requesting the commercial court to establish the infringement of trade secrets and award damages. Claimant relied on the Business Secret Act as legal basis.

The Defendants requested the commercial court to terminate the procedure and refer the claimant’s action to the competent labour court since the claimant’s claim against its ex-employee is stemming from the former employment relationship between them.

Lower court decisions

The first and second instance courts found that the dispute does not fall within the labour court’s competence given that the claimant asserted exclusively its rights protected by the Business Secret Act and the subject-matter of the action is not the employment relationship between the claimant and its ex-employee.

Thus, both courts examined the claimant’s action in its merits. While the first instance court established the trade secret infringement, the second instance court dismissed the claimant’s action as in its view the information disclosed between the defendants did not constitute a trade secret in the sense of the Business Secret Act.

Supreme Court

Surprisingly, in the judicial review procedure, the Supreme Court established that the labour court is competent to hear the case and terminated the procedure.

According to the Supreme Court, given that the Business Secret Act shall be interpreted in the employment relationship, in case of a trade secret infringement by an employee, the Business Secret Act and the Labour Code shall be applied together.

A contrary interpretation could lead to abuses by employers: they could argue that they solely base their trade secret infringement claims on the Business Secret Act and exempt themselves from the special rules of labour litigation, thereby depriving employees of special procedural guarantees.

Based on the Supreme Court’s decision when it comes to a trade secret infringement, the claimant as an employer cannot have the liberty to sue its ex-employee in front of the commercial court solely on the basis of the Business Secret Act but shall file its claim to the labour court invoking the provisions of the Labour Code as well. Moreover, if the employer wishes to bring an action against the company to whom its employee disclosed the trade secrets as a co-defendant, the labour court will be competent, too.

While it is understandable that the Supreme Court wanted to protect employees against being sued before the general commercial court based on the Business Secret Act, it is not sure that it is a good direction to deprive employers from their private autonomy and force them to sue their ex-employees on the basis of the Labour Code.

Nevertheless, given that the decisions of the Supreme Court being a precedent shall be followed by lower courts, for employers finding themselves in a similar situation in Hungary it is advised to sue their ex-employees in front of the labour court invoking the provisions of both the Labour Code and the Business Secret Act.

By Richard Schmidt, Managing Partner and Anita Vereb, Attorney-at-law, SmartLegal Schmidt & Partners

Hungary has been traditionally the go-to hub for filming in Europe.

1. Is it still the case – has Hungary maintained its position as the primary destination for filming in Europe or has it been surpassed by another location?

Hungary has not only maintained its position as the go-to production location in Europe but has increased its significance and strength. Although other Central and Eastern European countries — such as Poland, Czechia, Romania — are trying to attract more production by applying similar incentives, Hungary remains the number one destination for foreign, especially US-based, production companies in Europe after London.

Recently, Jamie Lee Curtis referred to Hungary by the nickname “Hollywood East”. (Fun fact: Jamie Lee Curtis is the daughter of legendary actor Tony Curtis, whose parents were Hungarian emigrants.)

In recent years, movies and series such as Dune, Mrs, Harris Goes to Paris, The Witcher and Shadow and Bone have been produced in Hungary. Dentons has been involved in the new Alien movie entitled Alien: Romulus to be produced in Hungary.

2. Can you identify factors that impacted the area?

The 30% tax rebate on production costs is just one of the many reasons why Hungary remains such a highly esteemed production location. The country also offers highly skilled production professionals, as well as lawyers and accountants, who can help companies apply for the tax rebate, provide labor law advice on actor contracts, help protect intellectual property, and provide other assistance which is essential to the production of world-class motion pictures. Such professional expertise is also available in London, but the costs of production in Hungary are significantly lower.

In recent years, several high-quality studios have opened their doors to production companies. A state-owned studio in Fót, at the north-east border of Budapest, has recently been expanded due to the demand for increased capacity.

Actors and other members of the cast usually speak with great respect about the vibrant cultural and gastronomical scene in Hungary and especially Budapest. Several world-renowned actresses and actors have been known to frequent Budapest’s restaurants and nightlife.

It is expected that in the coming years artificial intelligence will play a large role in the movie sector, not only when it comes to special effects, automation or copyright issues, but across the industry.

3. How has legislation that promotes the sector evolved over the last 10 years?

Legislation in Hungary is very producer-friendly, the government has a declared its intention to attract as much movie production as possible by providing the tax rebate and by removing administrative and technical barriers.

4. What was the impact of the pandemic on the development of Hungary’s filming industry?

During the global COVID-19 pandemic, most studios were shut down due to lockdown rules. In Hungary however, lockdown rules and travel bans were not as strict as in the US or other EU countries. This allowed movie production to continue in Hungary in a time of unprecedented global crisis. Due to the looser rules, although the first year of the pandemic caused a slight drop in movie production, Hungary benefitted from a significant head start after lockdown rules and travel bans were lifted in other countries which led to a major rise in production in the first years after the pandemic.

By Timea Bana, Partner, Dentons

Since 2010, the regulations and practices relative to the ESG requirements in the EU have been rapidly evolving. The EU has implemented significant rules by adopting the Taxonomy Regulation, the Non-Financial Disclosure Directive (NFRD), the Sustainable Finance Disclosure Regulation (SFDR) and the Corporate Sustainability Reporting Directive (CSRD). These regulate the disclosure obligations of certain companies and private equity funds in connection with their sustainability obligations and their commitment to respecting human rights.

Environmental, social and governance (ESG) within the EU and Hungary

Since 2010, the regulations and practices relative to the ESG requirements in the EU have been rapidly evolving. The EU has implemented significant rules by adopting the Taxonomy Regulation, the Non-Financial Disclosure Directive (NFRD), the Sustainable Finance Disclosure Regulation (SFDR) and the Corporate Sustainability Reporting Directive (CSRD). These regulate the disclosure obligations of certain companies and private equity funds in connection with their sustainability obligations and their commitment to respecting human rights.

The ESG requirements not only determine a company’s disclosure obligations, but they also influence its value. Many market players, so-called ESG qualifiers, such as Sustainalytics or Refinitiv, also establish their own factors and requirements by which they evaluate and rate companies from an ESG perspective. Having a well-governed company complying with ESG requirements also adds value from a financing perspective. Banks, public authorities, states or international organizations may provide more beneficial loans or other subsidies for companies operating in an ESG-friendly way.

Sustainable real estate funds are the beneficiaries in Hungary

Since EU legislation is constantly developing and determining the direction of industries, ESG requirements are also becoming more important in Hungary.
One of the latest developments is the Baross Gabor Equity Program announced by Nemzeti Tőkeholding Zrt., by which the Hungarian Development Bank will provide significant funds to real estate funds to invest in the real estate market (“RE Program”). The applicant real estate funds may use the money to invest in sustainable real estate projects.
The investments made by real estate funds must have an energy qualification of “Very good” in the BREEAM qualification system or a qualification of “Gold” in the LEED qualification system for commercial real estates. The investments for residential real estates need to have at least a BB class energy classification. This will require real estate funds to invest in real estate that has state of the art technology, uses renewable energy sources and does not exceed the annual energy consumption of 100kWh/sqm. These investments may also be considered an environmentally sustainable economic activity under the EU Taxonomy Regulation, as they contribute to the improvement of energy efficiency.

Real estate funds may individually receive a minimum amount of HUF 4.5 billion and a maximum amount of HUF 30 billion from the Hungarian Development Bank. By implementing the RE Program, the Hungarian Development Bank will provide HUF 150 billion to the real estate sector. The applicants must submit their applications to Nemzeti Tőkeholding Zrt. by 31 March 2023.

The introduction of the subsidy scheme will surely boost demand in the real estate market by providing an additional financial source to real estate funds. However, the new subsidy scheme will have a positive impact only on projects that can fulfill the ESG requirements in the field of sustainability and environment.

Energy projects in target

The EU legislation pushes enterprises to evaluate and consider the ESG aspects of their daily activities. The number of member states introducing local legislation for the same purpose has been growing gradually.

Namely, one of the latest domestic developments in Germany is the adoption of the German Supply Chain Due Diligence Act. It introduces material obligations applicable to significant German undertakings in relation to the ESG due diligence of their subsidiaries and suppliers for the purpose of identifying and eliminating their subsidiaries’ and suppliers’ environmental risks and activities violating human rights.

In Hungary, one of the government’s first steps is to announce the RE Program to encourage real estate funds to invest in the real estate market in a sustainable way and thereby support the energy transition.

Up to this point, real estate funds have only been allowed to invest in real estate-related assets. To achieve the sustainability goals in the energy policy field, it is necessary to extend the scope of the real estate fund’s investment targets to energy projects and companies licensed for renewable energy production and energy storage projects, which could boost the development of energy transition further.

By Daniel Orosz, Senior Associate and Dominik Csáscsu, Junior Associate, Baker McKenzie

Under Hungarian law if someone’s right to the protection of personal data is infringed, the person may be entitled to compensation for non-material damages. But does the unlawful processing of personal data always mean the infringement of the right to the protection of personal data, triggering the right for compensation? A fresh decision of the Hungarian Supreme Court analysed in this article provides answer to these questions.

Facts

Beginning with the facts, the defendant registered an e-mail address to the Hungarian company registry as its delivery address which was the same as the claimant’s e-mail address except for one dot. Given that the dot was not detected by the mailing system, the claimant received several e-mails addressed to the defendant.

The claimant requested the defendant to modify the e-mail address in the company registry and to pay him compensation for non-material damages. The defendant changed the e-mail address but refused to pay any compensation.

The claimant filed an action for compensation, pretending that because of the unlawful processing of his personal data by the defendant, he received unsolicited e-mails, thus the defendant infringed his personality rights protected by the Hungarian Civil Code.

The defendant requested the court to dismiss the action claiming that he not infringed the personality rights of the claimant. When the claimant informed him about the situation, he immediately corrected his mistake.

Contradictory lower court judgments

In the first instance court’s view the claimant’s e-mail address used for private purposes shall be considered as personal data and the wrongful registration of the e-mail address constitutes unlawful processing of claimant’s personal data. Given that the claimant received several unsolicited e-mails for years, actual adverse consequences occurred, meaning that the claimant is entitled to grievance award.

By contrast, the second instance court dismissed the claimant’s action. According to the court, the claimant’s e-mail address does not contain a unique identifier as his name from which the e-mail address was composed is the same as the name of the defendant’s representative, thus it cannot be considered as personal data. Further, the defendant did not register the claimant’s email address at the company court but the one which included a dot, so he did not process the claimant’s e-mail address unlawfully.

Supreme Court decision

In the judicial review procedure, the Supreme Court delivered a so-called Solomonic judgement. Based on the provisions of the GDPR, the Supreme Court established that the e-mail address containing the full name of a natural person constitutes personal data. The mere fact that the claimant’s name is common does not mean that it cannot be considered as personal data, it just means that other personal data is needed to identify the claimant.
However, by analysing the provisions of the Hungarian Civil Code on the protection of personality rights, the Supreme Court concluded that the claimant is not entitled to compensation for non-material damages.

According to the Supreme Court, the rules of the Civil Code provide protection against a direct attack on the personality of a natural person which violates his personal right deriving from human dignity. The possible violation of data protection rules does not automatically mean the infringement of personality rights under the Civil Code.

The wrongful registration of the e-mail address caused by a clerical error was not a direct attack on the claimant’s personality and after becoming aware of the mistake, the defendant has immediately taken steps to correct the error.

Thus, the processing of the claimant’s e-mail address resulting from the misspelling does not give rise to an infringement of the right to privacy, even though the claimant received unsolicited e-mails which caused him inconvenience.

In this decision the Supreme Court confirmed its previous case-law that the unlawful processing of personal data, in the absence of other elements, does not automatically constitute a violation of the right to the protection of personal data.

Consequently, the entitlement to compensation for non-material damages in case of unlawful data processing can only come into play in more serious cases, if the data subject suffers significant damage.

By Anita Vereb, Attorney-at-lawda, SmartLegal Schmidt & Partners

It is well known that the legislation on agricultural land and forestry is very strict and diverse, especially in comparison with the legislation on other private law matters. However, complying with these regulations must be even more difficult if the person who wants to acquire the ownership of a land is a citizen of another country and therefore is not familiar with the relevant Hungarian legislation. With the following, we offer a brief summary of the mandatory aspects of land acquisition in Hungary.

I. Participants of agriculture

Act CXXII of 2013 on the Transfer of Agricultural and Forestry Land (“Land Transfer Act”) covers the sale and purchase of the lands, considered as agricultural lands, which definition covers all lands that are being registered as arable lands, vineyards, orchards, gardens, meadows, grasslands, reeds, forests and wooded areas.

The Land Transfer Act sets forth that only natural persons who are

a) Hungarian citizens; or
b) EU citizens, or a citizen of a country party to the Agreement on the European Economic Area, or a citizen of a country treated as such by an international treaty (“EU citizen”)

may acquire the ownership of agricultural lands. Furthermore, the Land Transfer Act explicitly sets forth, that

1. foreign citizens (a person who is not a Hungarian citizen, nor an EU citizen);
2. foreign countries and their domains; and
3. legal entities – with few exceptions –

are prohibited from acquiring ownership of an agricultural land in Hungary.

It is crucial that natural persons who are not considered as “farmers” under the Land Transfer Act, may acquire ownership of agricultural lands only if the area of the land they possess, including the area of the land they wish to acquire, does not exceed 1 hectare. This means that in case a non-farmer already owns one hectare of agricultural land, he is even prohibited from acquiring ownership via adverse possession, since his ability to acquire ownership is maximized by law. This limitation does not apply only in few cases, one of which is when a non-farmer acquires the ownership of land from a close relative.

Under the term “farmer” the Land Transfer Act mainly considers a Hungarian or EU citizen registered in Hungary, who has a vocational qualification or a professional qualification in agriculture or forestry.

As mentioned above, legal entities – excluding few cases – are not entitled to own agricultural land, however, they are entitled to use them if they are considered as an “agricultural producer organization”.

II. Maximum land acquisition and maximum landholdings

The Land Transfer Act differentiates the maximum area of agricultural lands that can be owned or possessed by one participant of the agriculture.

The ownership of agricultural land is maximized in 300 hectares, and can be acquired by farmers or non-farmers who acquire the ownership from their close relative.

The farmers and the agricultural producer organizations are entitled to possess up to 1200 hectares of agricultural land. However, if the agricultural producer organization is considered as a producer of seeds of arable and horticultural crops, or an operator of a livestock holding, the area that can be possessed goes up to 1800 hectares.

III. Right of preemption and its exercise

The Land Transfer Act limits the freedom of contract in many aspects. One of the most crucial regulation is that the seller of the land does not have the ultimate right to choose the buyer as he wish, since there is a wide range of persons who have the right of preemption by law. Therefore, if a seller is to sell his land, the holders of the right of preemption can easily step into the contract and can acquire the ownership of the land with their unilateral statement.

Regarding the execution of the right of preemption, the seller is obliged to send the sales contract to the agricultural administration within 8 days after signing the contract. The agricultural administration then reviews the contract and if it does not find any reason for which it should be rejected, the administration ensures that the contract shall be advertised and thus made known to the potential holders of right of preemption.

IV. The mandatory approval of the transfer

In order to transfer the ownership of the agricultural land, the contract must be approved by the agricultural administration. The Land Transfer Act defines many reasons, which lead to the rejection of the contract. The most common causes of rejection are in connection with the violation of the above regulations, the violation of rights of preemption, or the failure to undertake the obligations by the buyer, explained under Section V.

V. The obligations after the acquirement of ownership

Pursuant to Act CXXIX on the Protection of Agricultural Lands, the land user must use the land for the production of the type of its registered cultivation or – without pursuing production – to prevent the establishment and spread of weeds, while respecting the soil protection standards (“Obligation of Use”).

The right to acquire ownership is subject to the undertaking of the obligation that the buyer will use the land himself and, in doing so, he will fulfil his Obligation of Use. Furthermore, the buyer shall accept the obligation that he is not to use the land for any other purpose than it is registered in the title deed for a period of 5 years from the date of acquisition of ownership.

The only exceptions from the obligations above is that the owner of the land can assign the “right of land use” by lease agreement to Hungarian or EU citizens, or to legal entities prescribed by law. Under the “right of land use”, the user can utilize, manage and use the agricultural land. According to the Land Transfer Act, the “right of land use” can be acquired by farmers or agricultural producer organizations.

VI. Conclusion

Based on the above it is safe to say that the acquirement of agricultural lands and the lawful usage following the acquirement is a highly complex matter, and it is easy for anyone who is not specialized to get lost in the concerning legal provisions. Therefore, it is highly recommended that in case anyone is about to start a related procedure, seek professional advice before doing so.

By Patrik Kiss, Junior Associate, act Ban & Karika Attorneys at Law

From 1st July 2023, a new law on the registry of legal persons, including companies and civil law organisations (“Registration Act”) will enter into force in Hungary. What are the key features of the new law? Will it be possible to register a company within 1 hour in Hungary from July 2023? This article highlights the major changes that the Registration Act will introduce.

Unified register of legal persons

Currently the different kinds of legal persons are registered in more registers in Hungary. For example the company register is maintained by the company courts, the register of civil organisations is run by the civil court, while certain type of entities are not registered in a public register at all.

The new unified register of legal persons will include:

1) companies,

2) civil and other organisations, moreover,

3) condominiums.

New approach – automated registrations

The new Registration Act allows automated registrations without human intervention in most cases (e.g., LLC formation or company modification procedures), which will simplify court work and reduce the case load.

In these cases, if the company’s request has no formal defects that can be detected by the automatic machine, the registration will be made within one hour.

Consequently, the control function of the courts will be focused rather on the ex-post control and judicial review procedures.

In the context of above automated registrations, only the most important documents shall be submitted to the court, i.e., in the future, in registration procedures, there will (again) be documents that are not directly examined by the court but kept by the legal representative.

We note that according to the Registration Act, if an annex is attached to the request in a foreign language, at least a simple Hungarian translation shall be attached to the request, unless otherwise provided by law.

Deadlines in the registration procedures

Regarding the deadlines, the new Registration Act maintains the 30-day rule for the submission of the request for company registration.
However, the 30-day deadline for submitting the request for company modification is reduced to 15 days, except for public limited liability companies and religious communities with legal personality covered by the new Act.

Business premises / branch

Furthermore, the current Company Procedure Act distinguishes between a company’s establishment in the same area as its registered office (Business premises) and an establishment a different area from its registered office but located in Hungary. (Branch)

Under the new Registration Act, a company’s establishments in Hungary will be classified uniformly as “Business premises”, regardless of whether they are in the same or different municipalities as its registered seat. According to the new Act, Branch will be considered only a foreign establishment of a Hungarian company.

Special power of attorney

To avoid fraudulent conduct, in case of a request submitted for a change of member or for the registration or deletion of a right in respect of a shareholder’s share based on a contractual agreement (e.g.: share purchase agreement), the new Registration Act will require that all parties concerned shall give the power of attorney to the acting legal representative.

Contractual rights registered on the shares

In case of general partnerships, limited partnerships and limited liability companies, the new Registration Act allows the registration of certain contractual rights (right of purchase, right of repurchase, option right, etc.) attached to shares in the register.

Service Agent

An important difference compared to the current provisions of Company Procedure Act is that according to the Registration Act, the service agent shall have an electronic contact in accordance with the provisions of the E-Administration Act.
A further difference is that the new Registration Act sets the presumption of knowledge of the foreign person at the fifth working day after service to the agent, instead of the current 15 days.

Activities subject to authorisation or notification

The new Registration Act maintains the possibility for a legal person to indicate among its activities an activity subject to authorisation or notification for which it has not yet obtained the authorisation or not made notification.

However, if the legal person fails to obtain the authorisation or make the notification within six months of the registration of the activity, the court shall delete the registered activity for which the legal person has not obtained authorisation or not made the notification.

Further regulations

Finally, we draw attention to the fact that many questions, which are now covered by the current Company Procedure Act (e.g.: procedures regarding the termination of the legal persons, the documents to be attached to the request etc.) will be not regulated by the Registration Act, but specific Acts or Decrees.

By Peter Korozs, Junior Associate, SmartLegal Schmidt & Partners

Schoenherr, working with Morgan Lewis, has advised Pathlight Capital on its term loan to Lumos Holdings US Acquisition Co. Baker McKenzie advised Lumos in Hungary and the UK.

Pathlight Capital is a private credit investment manager providing asset-based loans secured by first and second liens against tangible and intangible assets.

According to Schoenherr, the term loan was provided under a “New-York-law-governed credit agreement. The term loan is secured and guaranteed by Lumos subsidiaries incorporated in, among others, Hungary.”

Schoenherr’s team was led by Partner Gergely Szaloki and included Associate Balint Bodo.

The Baker McKenzie team included Partners Jozsef Vagi and Ines Radmilovic, Associate Greta Gali, and Junior Associates Robert Tran, Andrea Weinraub, and Dorottya Kosa.