How to Successfully Organize Your AGM in Hungary on Short Notice

With only two weeks until your Annual General Meeting (AGM) in Hungary, ensuring all preparations align with legal requirements is crucial. Whether you operate a Zrt. (Private company limited by shares) or a Kft. (Limited liability company), the deadline to conduct your AGM and approve financial statements is May 31. This guide will help you navigate the essential tasks leading up to your AGM.

Check Your Timing and Invitations

Ensure you’ve sent your AGM invitations at least 15 days before the meeting as required by law. This not only meets compliance but also prepares shareholders for active participation. Verify that the invitations follow your company’s Articles of Association and keep proof of dispatching for later verification.

Also, confirm the availability of all key individuals, including directors, managers, and auditors. Their presence is vital for discussing agenda items and addressing shareholder questions. Securing their availability early prevents last-minute issues that could disrupt the meeting.

Prepare and Review Documentation

The preparation of annual accounts is foundational for the AGM. Ensure that:

• The annual accounts, including income statements, balance sheets, cash flow statements, and equity changes, are fully prepared and offer a comprehensive view of the past year’s financial activities.
• The board of directors has thoroughly reviewed these statements to ensure they accurately reflect the company’s financial health.

Auditing Requirements

• Audit Eligibility: Check if your company needs an audit, which is likely if you use double-entry bookkeeping or exceed specific thresholds for revenue, assets, or employee numbers.
• Audit Objectives:
  • Verification: Ensure the audit independently verifies the accuracy of the financial statements.
  • Compliance: Confirm that the auditing process complies with both local and international standards.

Enhance Stakeholder Confidence

Plan to present the audit results at the AGM, providing shareholders a transparent view of the company’s financial status. Address any audit recommendations promptly to improve financial management and operational efficiency.

Ensure Effective Participation and Compliance

• Verify Shareholder Information: Ensure your shareholder or quotaholder register is up-to-date to enable eligible shareholders to vote accurately at the AGM.
• Compliance with E-Voting: If holding the AGM electronically, ensure your systems meet legal standards set out in Section 3:192 of Act V of 2013. Your systems should accurately record and verify all discussions and resolutions.

Finalize the AGM Agenda and Minute-Taking

• AGM Agenda: Confirm that the agenda includes all required items, such as approving financial statements and deciding on dividend distributions. Communicate the agenda clearly to all participants ahead of the meeting.
• Minute-Taking: Assign a responsible person for minute-taking. The minutes should detail discussions, decisions, and voting outcomes and comply with a 30-day publication deadline.

Special Resolutions and Final Checks

• Special Resolutions: For resolutions that require amendments to the Articles of Association or capital changes, ensure you have the necessary quorum. Some resolutions may need a qualified majority.
• Final Preparations: A few days before the AGM, review all preparations. Ensure that technology setups are operational and that participant information is accurate.

By adhering to these streamlined guidelines, your AGM will meet legal expectations and enhance shareholder engagement and trust. This approach ensures a successful and transparent meeting.

Stay informed and proactive about your corporate governance responsibilities to leverage these regulations for your company’s benefit. Ensuring you are up-to-date with the latest legal requirements can prevent potential pitfalls and foster a culture of transparency and accountability within your organization.

Harness Klea’s extensive expertise in AGMs to navigate the complexities of these critical meetings, not only in Hungary but internationally. Dive into our detailed blog post on Poland, Plan Your AGM in Poland: Key Steps for Success, for tailored insights. We’re confident these resources will empower your governance efforts.