Your essential guide to the company dissolution process in Hungary
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February 1, 2017Company dissolution is one method of ceasing business activity of a company which does not have any liabilities. While company formation in Hungary is quick and easy, tying up loose ends might take some time; this is why regulations allow 3 years for the company dissolution process.
How much time does company dissolution take?
While the law allows 3 years for the company dissolution process to be completed, it might take less time. However, various documents have to be collected, submitted, and examined, all of which might prove time-consuming.
During the company dissolution period, the following take place:
- The company should prepare, collect, and submit documents to the court of registration and to the tax authorities.
- The tax authority might want to conduct a tax inspection.
- Creditors might submit their claims.
- The company has to collect receivables, pay liabilities, sell assets, and decide how all remaining possessions of the company should be distributed among the owners.
If you are thinking about starting the dissolution process for your company, please consider the following:
- Once company dissolution is announced, creditors have 40 days to submit their claims.
- The company bank account has to be maintained during the dissolution process. Liabilities have to be settled from this bank account (except if the liabilities are paid in cash). Tax liabilities also have to be transferred from this bank account, while the tax authorities also transfers tax overpayments and tax reclaims to this bank account.
- Liabilities may be settled through bank transfer or in cash, by handing over assets of the company to the creditor, or the creditor might discharge the liabilities.
- When the dissolution process is closed, closing financial statements and closing tax returns have to be submitted within 60 days.
- When the dissolution process is closed, the National Tax Authority (NAV) may conduct a tax inspection.
- The company will be deleted from the company registry only when the National Tax Authority (NAV) informs the Court of Registration that the company does not have any tax liabilities.
Remember: the company dissolution process in Hungary is complex and lengthy. Before you start it, discuss in detail with your accountant. The more prepared you are, the smoother and shorter the process will be.
