Law

Lawyers may also act as real estate brokers pursuant to Section 64/C (5) of Act LXXVIII of 1993 (hereinafter: Housing Act) and Act LXXVIII of 2017 on the Activities of Lawyers (hereinafter: Lawyers Act).

For those interested in this topic, please read the interview with Dr. György Zalavári, attorney-at-law, on the ingatlan.com Knowledge Base.

In order to act as a real estate agent, lawyers do not need a special qualification, which is mandatory for other real estate agents, due to their legal qualifications and experience in real estate, but they must meet the other conditions set out in the Government Decree 499/2017 (XII. 29.) on the conditions for the commercial conduct of real estate agency activities and the detailed rules of registration, and they must also be registered by the real estate business supervisory authority.

They can also act as estate agents without the above-mentioned OKJ qualification. According to the legislation, this is a so-called additional activity which lawyers may perform in addition to their traditional duties as lawyers.

A lawyer wishing to practise as a real estate agent on a complementary basis must not only meet the statutory requirements for practising as a lawyer, but also the requirements laid down in the legislation governing the activity of real estate agent.

A specific requirement for lawyers is that they may only act as a classic lawyer and as a real estate agent for the same client in the same transaction at the same time if the client gives his express written consent. In such cases, the drafting and countersigning of the sale and purchase contract may be carried out by another member of the law firm instead of the lawyer acting as real estate agent.

If you want to sell a property, you should contact a lawyer who is also a real estate agent and who is entitled to act as an intermediary for you in the sale of your property, in addition to his or her traditional role as a lawyer.

The author of the article is Dr György Zalavári, lawyer and managing partner of Ecovis Zalavári Legal Hungary.

Gambling enthusiasts and the potential accumulation of winnings from week to week is what keeps a large proportion of the country's population excited about the numbers drawn in the weekly Five Lottery draw. They are more hopeful that if they hit a winning combination, their lives could be fundamentally changed. The very first draw of the Five Lottery was on 7 March 1957 and at the time of writing, the largest prize so far was recorded as 6,523,768,955 forints.

But what are the rules for this popular game?

The legal background to the Five Lottery is provided by Act XXXIV of 1991 on the organisation of games of chance. The authority responsible for the supervision of gambling is the Authority for the Supervision of Regulated Activities (hereinafter "the Authority"), which also supervises the operation of the Five Lottery, and only the state games organiser is authorised to organise this game.

The Five Lottery is also governed by the Promoter's Five Lottery Rules of Participation.
According to the law, a lottery is a game of numbers organised at the same time intervals and authorised by the Authority under the name "lottery", in which a predetermined number of numbers in a given set of numbers entitles the player to a prize.

In a numbers lottery, the organiser is required by law to award a predetermined prize to the holder of a ticket purchased for a predetermined purchase price if one or more numbers in the ticket number sequence match the number drawn in the public draw.

Are there any legal proceedings related to lotteries?

The history of court decisions includes more than one decision where the lottery was the subject of litigation. These cases typically involve several people playing the lottery together and then one of the players, to the exclusion of the others, alone collecting the winnings from the lucky winning ticket. This is fine when the others might realise that there is a benefit to playing the lottery together and it has not been shared by the other player who cashed the ticket, if they cannot agree among themselves, their case does not end up in a court case. In one such case, the Curia ruled that joint lottery winnings are subject to the parties' either oral agreement and the civil law rules on community property. The result in that case was that the partner who had concealed the prize had to share the lottery winnings with the others on a pro rata basis.

What is the prize pool?

In the context of the lottery, the law also stipulates that the prize pool is the product of the number of tickets purchased and their price, of which at least 40% must be used for prizes. In the five numbers lottery, you have to choose 5 out of 90 numbers and you win if you get as many of the 5 winning numbers as possible in the weekly draw. You need to hit at least 2 numbers to win something, and you need to hit 5 numbers to win the jackpot.

How to play the Five of a Kind lottery?

The Five of a Kind lottery can be played with your own numbers and random numbers, on paper or digitally. Bets can be placed on numbers from one to five weeks in advance. If no-one hits the five numbers drawn in a given week, the prize pool for the five winning tickets is added to the following week's winnings, significantly increasing the amount that can be won and typically the amount of money that can be won that week. This weekly accumulation can last up to a year if no one hits all the numbers week after week. If there are no five-hitters for a year, the jackpot is distributed among the other winners according to the participation rules. But it's not just the full-match prize pool that accumulates from week to week, because the same happens if there are no two, three or four-match tickets with the prize pools created for them.

How do I get the prize?

If a player has a full lottery ticket, his/her grand prize will be paid by the game operator only after verification and identification by bank transfer, no cash payment is possible. The organiser will deduct personal income tax from the winnings before payment, so there is no obligation to declare and pay tax.

The author of the article is Dr György Zalavári, lawyer and managing partner of Ecovis Zalavári Legal Hungary.

 When a new business is born, one of the central questions is what name the owners should give to their new company, especially if they want to use it to advertise their business, even to create a new brand. But when it comes to the use of a company name, there are rules that limit the imagination of members and shareholders. 

Act No V of 2006 on company registration, court proceedings and winding-up (Ctv.) lays down the rules and provisions that set the framework for the choice of company name. A company name must consist of two, typically three, elements. The two obligatory elements are the keyword, which is the first element in the company name, and the unique element, which can be a creative fancy name to help identify the company and distinguish it from other companies with the same or similar activities (e.g. Wolters Kluwer). The keyword can be a Hungarian or foreign language term, an abbreviation or even an acronym. It is also an important rule that it should be defined in Latin letters and Arabic numerals. 

Another mandatory element of the company name is the name of the chosen company form (e.g. limited liability company, limited partnership). The abbreviated version of these in the short name is a kft., bt. or zrt. In addition to these, a third term indicating the activity (e.g. service or trade) may also be included in the company name. In the company name, the term referring to the activity and the chosen company form may only consist of Hungarian words, in accordance with the rules of Hungarian spelling. In the company name, abbreviations are only possible in the case of a keyword or when defining the company form. 

This rule provides guidance to companies on whether a multi-word keyword in an abbreviated name can consist only of initials (e.g. Men In Red Korlátolt Felelősségű Társaság and M.I.R. Kft.). The answer to this question is no, as a rule, the prefix cannot be abbreviated in the short company name, it must appear in the same way as the full company name. The abbreviated name of the company consists only of the motto and the designation of the form of the company (e.g. Men In Red Ltd.). 

The company name must be clearly distinguishable from the name of any other company registered in the country. The company name must not give the impression that it is misleading as to the company's field of activity and the form of the company chosen, and must also be clearly distinguishable from the official and colloquial names of public authorities and administrations. 

A court decision has also pointed out that where the name of a company refers to a particular activity, it must not give the impression that it is engaged in an economic activity which it does not, or could not, in fact carry out, because the company name cannot be misleading in that context either. Thus, it cannot be a "tax authority limited company." or "limited liability limited partnership". Nor may the name of the company include the name of a person who played a leading role in the establishment, development or maintenance of authoritarian political regimes in the 20th century, or the name of a term or organisation directly associated with an authoritarian political regime in the 20th century. 

The company name may also include the name of the owner or members of the company. In its decision on the use of a family surname as a company name, the Curia also ruled that the identity of a surname and a company name does not mean that the natural person concerned can automatically be identified with the company. It also allows the name of the company to be defined in a term, even if used as a surname by others, which is not used as a proper name by the owners or the managers. 

If the company is established for non-profit purposes and carries out non-profit activities, the non-profit character of the company must be indicated in the company name before the indication of the legal form (e.g. XY Nonprofit Ltd.), and in the case of public benefit status, this organisational capacity may be indicated in the company name (e.g. XY Public Benefit Ltd.). 

The terms "state" or "national" may appear in the company name only if the state directly or indirectly holds a majority stake in the company, or if the company is permanently state-owned, or if a government decision authorises it to do so in connection with the performance of a public task of major importance. 

The name of an eminent historical figure (e.g. Petőfi) may be used in the name of a company with the permission of the Centre for the Study of Humanities (in Hungarian: Bölcsészettudományi Kutatóközpont), and a name in which another party has a legal interest (e.g. the use of an already registered trade mark or a unique identifier, trade or other name) may be used only with the consent of the rightholder. Interestingly, the opinion of the Centre for the Study of Humanities is not required if it is clear from the company documents that the name of a member of the company is included in the company name. Thus, if the owner of the company is called Lajos Kossuth, he or she is able to set up Lajos Kossuth Ltd. without any further authorisation. 

If two new companies apply to register the same name with the same name, the court will approve the application of the one that filed the application for company registration first or the one that used the name reservation. 

The author of the article is Dr György Zalavári, partner lawyer. Ecovis Zalavári Legal Hungary.

Photo by Jon Tyson on Unsplash . Thanks!

In many cases, our clients come to us claiming that they have been the subject of an unexpected enforcement action arising from a long forgotten relationship dating back many years, and often they no longer remember why, to whom or for how much they were owed. In such cases, it is necessary to examine retrospectively whether the claim can still be enforced against them. 

If the claim or the right to enforce it has become time-barred, this is good news for the client, because in this case the enforcement proceedings against him can be terminated. In such cases, the historical background should be examined and assessed in the chronological order of the events in the legal relationship and the actions of the parties. 

The general rules on limitation periods are set out in the Civil Code (CC). Here, it is also necessary to consider whether the legal relationship on which the limitation period is based is to be examined under the current Civil Code or the earlier "old" Civil Code, in force until 25 February 2013, because the rules on limitation differ in the two cases. 

Under the current Civil Code, claims are subject to a limitation period of five years, subject to statutory exceptions. The limitation period is shorter for claims arising, for example, from parking, utilities, internet, mobile and fixed telephone services. But we can also set a shorter limitation period in writing in an individual contract, with the proviso that limitation cannot be completely excluded. The limitation period starts to run when the claim becomes due. If a time-barred claim cannot be enforced in court proceedings, but the debtor must expressly invoke this, because if he does not make a declaration to this effect, a time-barred claim will also be judged by the court and recovered by the bailiff, because the limitation period cannot be taken into account ex officio in court or administrative proceedings. If the time-barred claim is nevertheless paid by the debtor, it can no longer be recovered on the grounds that it is time-barred. 

Dr. György Zalavári LL.M  lawyer and managing partner of Ecovis Zalavári Legal Hungary , also points out that the limitation period is interrupted if the debt is acknowledged by the debtor, if the parties reach an agreement; or if the creditor initiates court proceedings and a judgment is obtained. 

In such cases, the limitation period starts again. If the debtor submits a claim to the bailiff under Article 41 of Act LIII of 1994 on Judicial Enforcement (Act LIII of 1994 on Judicial Enforcement) that the claim subject to enforcement is already time-barred under the provisions of the Civil Code or other applicable law, the bailiff is obliged to send this request to the applicant for enforcement. The debtor has 15 days to make a statement on the merits in response to the debtor's presentation. If he acknowledges that the claim is time-barred within this period, he will have to repay any sums already received during the enforcement and will also bear the costs of enforcement. If he has then admitted the debtor's claim to be true and has paid the sums due and determined by the bailiff, the enforcement proceedings will be terminated, and the debtor will be exempted from further enforcement actions. 

However, if the claimant for enforcement does not admit the limitation plea and the bailiff is unable to terminate the proceedings, the debtor must prove his claims on limitation in court in a suit for termination of enforcement in order to terminate the case. However, it should also be noted that the limitation period for a claim or enforcement right is interrupted by any enforcement action. 

Thus, if, from time to time during the procedure, the bailiff takes some verifiable action, the limitation period is restarted at each procedural step and can last for years, almost without time limit. 

If you need to investigate the statute of limitations for a claim, contact Dr. György Zalavári LL.M  lawyer and managing partner of Ecovis Zalavári Legal Hungary.

Photo by Jon Tyson on Unsplash. Thanks!

Please find the blog article about the Hungarian White Card for digital nomads on the link below:

https://www.ecovis.com/global/hungary-white-card-for-digital-nomads/

Photo by David L. Espina Rincon on Unsplash  

 In real estate transactions, the parties to the contract must agree on the payment schedule for the purchase price. This means that the seller and the buyer must agree on the instalments and the dates on which the buyer must pay the purchase price. They must also specify whether each instalment will be paid in cash or by bank transfer. It is not inconceivable that payment may be made by offsetting the outstanding receivables without any actual cash flow.

In addition to defining the amount of the instalments, the time limit and the form in which the buyer is obliged to pay them, the seller and the buyer must also define the legal title to each instalment.

The  differences between the two types of legal instruments determined in the title can have a significant impact on the legal options available for the performance of a contract. The most common legal titles worth mentioning are down payment and prepayment. 

The simplest task in the explanation is to define the prepayment, because it is nothing more than an instalment of the purchase price, which is not subject to any additional rules compared with the rules on the purchase price. The prepayment and the purchase price instalment therefore mean the same thing. 

However, the rules of the law about the down payment are more detailed and may be more complex. A down payment is a sum of money paid to the seller when it is paid as confirmation of the buyer's obligations under the contract of sale. This amount is normally included in the purchase price and forms part of it, i.e. it is a deduction from the purchase price.

The old rule, which is no longer applicable, is that the deposit must be paid at the time of signing the contract. This is no longer the case. It may be paid as the third or fourth instalment and as an amount to cover the purchase price. Logic dictates that the down payment should be paid by the obliging party in the shortest period following the conclusion of the contract. Only then can the legal consequences of the deposit be applied in the event of a breach of contract If the party responsible for the breach or default forfeits the down payment, if he has given it, he forfeits it, and if he has received it, he must repay twice the amount received 

The most common cases for the loss of a down payment: 

The most common case of a breach of contract on the buyer's side leading to the loss of the down payment is when the buyer fails to pay the purchase price. 

In particular, the question often arises in the context of purchase price payments planned with the use of credit : will the buyer lose the deposit if he is unable to pay the purchase price because the bank has not accepted his application for credit and he is unable to meet his obligation to pay the purchase price due to the lack of bank financing?

The answer to this question is that it is up to the buyer to decide from which financial sources he wishes to finance the purchase price. The loss of access to finance is normally a default by the buyer, i.e. the buyer loses the deposit. 

However If the selling party is cooperative and sufficiently generous, the parties may derogate from this in the contract. It is also clear that neither party is liable for this default. The amount of the down payment will be returned to the buyer at the termination of the contract.

However, a more straightforward way to obtain bank financing is to ask for a preliminary credit assessment from several banks. You can do this before you choose the property you want to buy. 

You will not only find out how much money you have available to buy a home, but you will also be able to compete with cash buyers with this information - that you are creditworthy for the amount you have in hand. 

On the other side of the coin, the reason for a contract to fail can be a lack of information provided tot he buyer about the essential characteristics of the property or even a failure to take possession. 

A common occurrence is the seller's failure to inform the buyer that the property is being built or the construction has been carried out without the appropriate building permit or a permit for use. These can also lead to the buyer being able to withdraw on the grounds of breach of contract by the seller and to the seller being subject to the consequences of a down payment. 

It is also possible that a sale and purchase agreement may be impossible to conclude because of a cause for which neither party is responsible. An example might be if an earthquake causes the property which is the subject of the sale to collapse. The transfer of the property is therefore unfeasible in this case. Thus, the seller cannot be held liable. If the contract is terminated, the buyer will only be refunded the down payment when the contract is settled in this situation. 

If the contract is not performed for reasons for which neither party is responsible or both parties are responsible, the down payment is returned. 

The amount of the down payment is typically 10 percent of the purchase price, but this is not fixed anywhere in law. This may vary depending on the size of the purchase price. It can be 5 or even 30 percent of the agreed purchase price. However, the important to note that if the amount of a down payment set at an excessively high rate, known as an excessive deposit, may be reduced by the court on application by the party liable, i.e. the contracting party who is obliged to pay the deposit. Such a case If the court orders the down payment, it to be paid only in a lower amount. In the case of a down payment paid, only the lower amount is subject to any legal consequences.

The down payment can be seen as a significant sanction in the event that a transaction does not take place due to the fault of one of the parties. 

However, this does not mean that the defaulting party should only have to pay this amount for the damages suffered by the other party. The amount of the down payment reduces the amount of any damages or compensation, but the additional damages or compensation that can be claimed from the at-fault party remain. It may be fixed, that the loss or double payment of the down payment does not relieve you from other consequences of the breach of contract, which may still be enforced against the at-fault party. 

The payment for a waiver (or regret) (in Hungarian „bánatpénz”) means something else The payment for a waiver It is a common mistake when the parties thinks that with the payment or loss of the down payment any party is entitled to rescind from the contract any time. It is a false presumption. Without a proper reason none of the parties can withdraw unilaterally from the agreement. The only chance to terminate without a reason if the contract contains a  payment for a waiver clause which provide an opportunity to rescind unilaterally in case the affected party pays the payment of waiver (or payment of regret).

 If you plan to purchase a real estate in Hungary, contact Dr György Zalavári, lawyer and partner of Ecovis Zalavári Legal Hungary. 

Dr. György Zalavári LL.M.
Ecovis Zalavári Legal Hungary
Lawyer | Mediator | Corporate Law and Data Protection Specialist
gyorgy.zalavari@ecovis.hu

The answer is simple: yes, you can. Although the Hungarian Civil Code has allowed this possibility for many years, in practice we find that this solution is more often used in the structures of foreign companies.

According to Hungarian law, it is possible for a company to have a legal entity as its managing director, but in this case the legal entity is also obliged to appoint a natural person to act as managing director on its behalf.   

In relation to this natural person, the legal provisions and restrictions that would otherwise apply to the appointment of a natural person as a managing director should also be examined.

In the case of Hungarian companies with a foreign parent company, it also happens that the managing director of the foreign company is another company, and the managing director of this other company is also another company.In such a case, not only the company certificate of the foreign parent company but also the company certificate of the company of the managing director of the foreign parent company must be submitted in the Hungarian company procedure when the Hungarian company is established. 

This is necessary because the application for company registration must be accompanied by the document from which the right to represent the foreign member can be established, and this also applies to the other company representing the foreign company.

 Although this document is not listed as a mandatory attachment in the Act on Company Procedure, it is a requirement that can be deduced from the general rules. 

Based on the practical knowledge of the lawyer Dr. György Zalavári, the author of this article, it is important to note that the prosecutor's office investigating the proceedings of the commercial court will pay attention to this element and, in case of its absence, will bring an action against the registration order even if the commercial judge has decided on the registration of the company without it.

However, it can create an unpleasant situation in the life of the company if bankruptcy or liquidation proceedings are initiated against the other company representing it, because it is then recommended to take immediate action to change the company's representation. Otherwise, it may even happen that the bankruptcy trustee or liquidator of the other company becomes the natural person entitled to act on behalf of your company. 

Therefore, if another company is the managing director of our company, it is important to keep a close eye on its legal status and operation and, if necessary, to take swift and timely action to change the representation.

Dr. György Zalavári LL.M.
Ecovis Zalavári Legal Hungary
Lawyer | Mediator | Corporate Law and Data Protection Specialist
gyorgy.zalavari@ecovis.hu

The acceleration of company registration procedures has reduced the importance of the pre-incorporation phase, but it is a necessary stage in the life of any company. 

The pre-company is created by the signature of the founders of the memorandum and articles of association and countersigned by a lawyer, and is dissolved by registration in the Trade Register or by the final refusal of an application for registration or the withdrawal of the application for registration.

Although the pre-company is formed as described above, it may not commence commercial activities until the application for registration has been filed with the Commercial Court. 

The tax authority will then establish the tax number for the pre-company, stating that this is not otherwise a necessary condition for carrying out the economic activity, but that care must be taken in the economic activity carried out at this stage in order to ensure that the tax deduction is exercised in a lawful manner. [KGD.2008. 176] If, however, the tax authority refuses to issue a tax number, the founders are jointly and severally liable for the tax obligations of the pre-company. [Art. 22]

The pre-corporate nature of the company must be indicated in the company's documents and declarations; failing this, a declaration made by the pre-corporate company is, if the company is not registered, a declaration made jointly by the founders.

A pre-company is not a separate legal form: it is governed by the rules applicable to the company which it is intended to set up, except that there can be no change in the members except by operation of law, i.e. the shares cannot be transferred; it cannot form or become a member of a company; it cannot be the subject of proceedings to exclude a member; and it cannot be the subject of a transformation, merger, division or dissolution without succession. In the pre-company stage, the articles of association may not be amended, except upon request of the court of registration and the body competent to grant official authorisation, but the Civil Code does not preclude the members of the pre-company from amending the articles of association, with the amendment taking effect on the day following the registration of the company. [BDT2006. 1453.]

The pre-company may therefore conclude contracts after the application for registration, which are considered legal transactions of the company after registration. If, however, the registration of the company is finally refused or the application for registration is withdrawn, the pre-company must cease to exist without delay and the obligations entered into must be met out of the assets made available to the company being formed. 

The founders shall be jointly and severally liable to third parties for any claims that cannot be settled. If, in the company being formed, the liability of the member for the obligations of the company has been limited and there remain, despite the member's liability, unpaid debts, the directors of the company being formed shall be jointly and severally liable to third parties for such debts.

Dr. György Zalavári LL.M.
Ecovis Zalavári Legal Hungary
Lawyer | Mediator | Corporate Law and Data Protection Specialist
gyorgy.zalavari@ecovis.hu

In the case of a gift, the donor transfers the ownership of an object to the donee free of charge, with the possibility of reclaiming it under certain circumstances.

One of the legal bases for reclaiming a gift is if the donor needs it for his/her subsistence. It is important to note that only the gift still existing can be recovered and only if its return does not endanger the subsistence of the donee. The donee is not obliged to return the gift even if the donor adequately provides for the donor's subsistence by means of an annuity or maintenance in kind.

The gift may also be recovered for a serious infringement committed by the donee or a relative living with the donee at the expense of the donor or a close relative. In addition to the above, it is also possible to claim not only the existing gift, but also the value of the value of the gift that has been replaced. 

A serious breach of a criminal offence or a breach of a legal obligation is considered to be a serious breach, provided that a final court or administrative decision is not a prerequisite for the claim to be enforceable, but the mere deterioration of the relationship between the parties or the lack of respect for the donor is not sufficient.

 The gift cannot be recovered if the gift or the value substituted for it is no longer present at the time the infringement was committed.

Finally, the donor can also claim the gift back if he or she has subsequently made the gift on the basis of a presumption that has been permanently frustrated, without which the gift would not have been made. Three conditions must be considered in this context: (i) the transaction was based on a presumption; (ii) without the presumption the transaction would not have been concluded; (iii) the presumption was subsequently permanently frustrated. In the examination, the circumstances surrounding the gift must be carefully weighed, for example, 'the relationship which existed between the donor and the donee before the gift was made is of great importance; the value of the object of the gift must also be examined, and in connection with this whether the gift is so significant that it may be reasonably inferred that the donor was in fact induced to make the gift by the presumption which he had put forward' [PK. 76]. 

The gift cannot be recovered or the value substituted for the gift cannot be claimed if the failure of the assumption on which the gift was based was caused by the donor's wrongful conduct.

The gift can never be reclaimed at the normal rate, but it can never be reclaimed even if the gift-giver has forgiven the offence. Forgiveness or waiver of reclaiming is when the gift-giver does not reclaim the gift after a long period of time without good cause.

Dr. György Zalavári LL.M.
Ecovis Zalavári Legal Hungary
Lawyer | Mediator | Corporate Law and Data Protection Specialist
gyorgy.zalavari@ecovis.hu

A summons to a pre-suit settlement attempt, especially in simpler disputes, can provide a fast and cost-effective dispute resolution forum for citizens seeking redress.

The procedural rules laid down in the Code of Civil Procedure provide that a party to a dispute may, prior to the commencement of proceedings, request the district court or tribunal which would otherwise have jurisdiction to hear the case to summon the other party to a settlement attempt.

The procedure is considered to be fast, as the court sets a deadline for the attempted settlement within thirty days of receipt of the request.

If the parties manage to reach an agreement, the court will record it in the minutes. A settlement approved by the court has the same effect as a judgment: if one of the parties fails to comply, it can be enforced by execution.

If no agreement is reached by the deadline, the court will issue an order declaring the proceedings ineffective and closing them. 

If the applicant fails to appear, the court shall, at the request of the opposing party who has appeared, order him to pay the costs.

An important procedural rule is that, in cases falling within the jurisdiction of the courts, the parties must also appoint a legal representative when attempting to reach a settlement.

The costs of summoning a lawyer to a settlement attempt are relatively low, as the fee payable is limited to HUF 15 000, but the rules on legal aid apply in the same way as in litigation.

A court summons may also be requested if the parties have previously been in mediation and one of them wishes to have the agreement reached in mediation put into a court settlement. In this procedure, legal representation is no longer mandatory and the court will also set a deadline of thirty days from the date of receipt of the request for an attempt at conciliation.

A settlement attempt summons thus allows the parties to a dispute to discuss their case relatively quickly and at low cost before the court as the main dispute resolution forum and then to reach a settlement with the court's assistance.

Dr. György Zalavári LL.M.
Ecovis Zalavári Legal Hungary
Lawyer | Mediator | Corporate Law and Data Protection Specialist
gyorgy.zalavari@ecovis.hu

To ensure a uniformly high level of cybersecurity across the European Union, the Cybersecurity Certification and Supervision Act (Cybersecurity Act) 2022/2555 (NIS2) aims to secure the EU's digital infrastructure and enhance the ability to defend against cyber threats.

The Act imposes a number of requirements on companies whose activities or organisations fall within its scope. Each company should check whether the provisions of this legislation apply to its business.

If the Cybersecurity Act applies to the company, it must submit an application for NIS2 registration to the Regulated Activities Supervisory Authority (RPAA) by 30 June 2024. In addition, the company must classify its activities into a security class and define specific security measures in accordance with the Cybersecurity Act, Decree No. 7/2024 (VI. 24.) MK. Furthermore, it is mandatory to choose a cybersecurity auditor, to conclude a contract with it and to carry out the cybersecurity audit.

These obligations apply mainly to medium and large enterprises, as defined in Act XXXIV of 2004 on Small and Medium Enterprises. Companies with at least 50 employees or an annual turnover of at least €10 million should take into account these obligations.

It is also important to consider the activity of the SME in question. The Cybersecurity Act. Annexes I and II of the KiP Directive set out in detail which firms fall into the critical and highly critical sectors.

Exceptions to the main rules include electronic communications trust service providers, DNS providers, top level domain name registrars and domain name registrars, as they are subject to the provisions of the Act even if they are not medium-sized and large companies.

If a company is not directly covered by the Act but subcontracts to one of these companies, they must agree in their contract to comply with the Act.

Companies that fail to comply can face substantial fines and even be banned from doing business if their managers fail to comply.

Dr. György Zalavári, lawyer and partner at Ecovis Zalavári Legal Hungary, stresses that it is important to note that only a person who is authorised to use the company's company gate can apply for registration.

Dr. György Zalavári LL.M.
Ecovis Zalavári Legal Hungary
Lawyer | Mediator | Corporate Law and Data Protection Specialist
gyorgy.zalavari@ecovis.hu