Many people believe that if they want to establish an LLC, there is one major obstacle standing in their way before they can get started: they need to come up with the 3 million HUF share capital. However, this assumption is not entirely accurate and often discourages people from starting their own business. The good news is that the 3 million HUF share capital does not have to be paid immediately. In fact, the law expressly allows the founders to provide it at a later date.
In this post, we explain in detail when the share capital actually has to be paid and how you can make informed use of this opportunity.
The full amount does not have to be in the bank account at the time of starting the company.
The Civil Code and company registration practice allow the members of a company to pay only part of the share capital at the time of incorporation. This means that paying the full 3 million HUF is not a prerequisite for company registration. The company can be established with even a minimal cash contribution, provided that the Articles of Association specify when the members will provide the remaining amount.
This is especially good news for those who are just starting a business but do not have sufficient savings available immediately or do not want to tie up all their funds at once. Starting a company is therefore not necessarily a matter of money, but rather a matter of decision-making and strategic planning.
By when does the share capital actually have to be paid?
The law regulates the deadline for providing the share capital in two ways: on the one hand, under the general rules of the Civil Code, and on the other hand, according to the deadline specified in the company’s founding document (Articles of Association). Under the law, the full share capital must be available to the company no later than within two years from the date of company registration.
This deadline serves as an upper limit. The members may also decide, in the Articles of Association, to provide the share capital earlier, for example within six months or one year. However, it is important to note that if no specific deadline is set, the statutory two-year deadline will apply.
What should you pay attention to when deferring the payment of share capital?
Although this option is available, deferred payment is not a “loophole”, but a responsibility. As long as the full share capital has not been paid or provided as an in-kind contribution, the members may operate under certain restrictions. For example, they are not entitled to dividends, and if the company accumulates debts, the members may also become personally liable up to the amount of the unpaid share capital.
So, the deferral provides flexibility rather than an exemption. The goal is to allow the business to develop and become stronger during its first few years and, once it is on a more stable footing, to provide the full share capital.
Establishing an LLC does not mean that you have to “put down” 3 million HUF upfront. The law allows this financial commitment to be fulfilled after the company has started operating, even gradually. This is a tool worth using consciously, especially for those who want to start a business with a limited budget but build a stable company in the long term. The key is to be informed: know the rules, make use of the opportunities available, and plan ahead.