Forced Deletion Proceedings in Hungary

 

Can the Company Continue Operating During Forced Deletion Proceedings?

As a general rule, a company may not continue its ordinary business activities after forced deletion proceedings have commenced. However, in eligible cases, the company may request permission from the company court within 15 days from the starting date of the proceedings to continue business activities not exceeding its ordinary course of business while preparing a request for continued operation.

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The 15-day deadline is strict, and this option is not available in every forced deletion case. In particular, the company must have a valid tax number and the statutory exclusion grounds must not apply.

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Can the Forced Deletion Proceedings Be Terminated? 

In eligible cases, the company may request the company court to establish that the conditions for continued operation are met and to terminate the forced deletion proceedings. The request may be submitted until the 90th day from the starting date of the proceedings. This deadline cannot be extended by a request for excuse. 

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The company must demonstrate that the reason giving rise to the forced deletion proceedings no longer exists and that its lawful operation has been restored. Additional statutory conditions must also be satisfied before the court can terminate the proceedings.

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Because the applicable deadlines are strict, the legal position of the company should be reviewed as soon as forced deletion proceedings are commenced.

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​How Major Gabor Law Firm Can Help in Forced Deletion Proceedings

Major Gabor Law Firm advises companies, managing directors and owners in Hungarian forced deletion proceedings. Our work includes assessing the legal and tax position of the company, identifying available options for continued operation, representing clients before the company court and NAV, and supporting the lawful closure of the company where continued operation is no longer possible

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Dr. Gábor Major’s previous professional experience at NAV provides practical insight into tax authority procedures that may arise alongside forced deletion proceedings, particularly where tax compliance, tax number issues or outstanding filing obligations are involved.

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Legal and Tax Risk Assessment

Review of the company’s legal and tax position, the reason for the forced deletion proceedings and the potential risks for managing directors and owners.

 

Representation Before the Company Court and NAV

Legal representation and communication with the company court and the Hungarian National Tax and Customs Administration (NAV) in matters related to the proceedings.

 

Continued Operation Strategy

Assessment of whether the statutory conditions for continued operation may be met and assistance with the necessary legal steps and submissions.

 

Lawful Closure and Risk Management

Where continued operation is no longer available, assistance with managing the legal and tax consequences of the company’s termination and reducing avoidable risks.

 

Frequently Asked Questions About Forced Deletion in Hungary

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What is forced deletion in Hungary?

Forced deletion is a company court procedure that may lead to the termination of a company without legal succession if its lawful operation is not restored. The procedure is intended to remove unlawfully operating or non-functioning companies from the company register.

Can a company continue operating during forced deletion proceedings?

In certain eligible cases, yes. For proceedings commenced on or after 1 July 2021, the company may request permission from the company court within 15 days from the start of the proceedings to continue business activities not exceeding its ordinary course of business while preparing a request for continued operation. This option is not available in every case.

Can forced deletion proceedings be terminated?

In eligible cases, yes. The company may request termination of the proceedings within 90 days from the starting date if it can prove, among other conditions, that the reason for the forced deletion no longer exists, lawful operation has been restored, due reported claims have been settled, the applicable supervisory fee has been paid and the company has a valid tax number.

Can a managing director be held personally liable?

Personal liability is not automatic, but the company court may examine the conduct of current and former managing directors and certain members or shareholders. Depending on the circumstances, liability for unsatisfied creditor claims and disqualification from company management may arise.

When can forced deletion turn into liquidation?

In certain cases, the company court terminates the forced deletion proceedings and initiates liquidation instead. For proceedings published from 28 January 2025, this may occur, among other cases, where reported claims reach HUF 1,000,000 or where a claim has been reported and the company’s assets reach HUF 1,000,000.

What should a managing director do after forced deletion proceedings are ordered?

The legal reason for the proceedings, the company’s tax status, outstanding obligations, creditor claims and available deadlines should be reviewed immediately. Early action is particularly important because several procedural deadlines are strict and may determine whether continued operation can still be restored.

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