The decisions of a company's shareholders can be made in a simplified manner during the pandemic based on a new government decree. The simplifications apply, among other things, to the conduct of the shareholders’ meeting or the members’ meeting, the approval of the annual report and the decision on dividend payment. Management can get additional powers and decide on behalf of the owners in certain cases.
The meeting of the main body of a legal person can take place electronically or by written vote, unless this is not legally excluded and if it cannot be held in a conventional manner due to epidemiological measures.
If it is not possible for the shareholders or shareholders to make the necessary decisions in a conventional or simplified manner, the decision-making powers of the shareholders pass to the management, with the exceptions specified in the government decree.
In view of the above, the management of the legal person can decide on the adoption of the annual financial statements in accordance with the Accounting Act, the use of the after-tax profit and other important questions within the limits set by the decree. The regulation also specifies the areas over which management cannot make decisions, even in an emergency.
The financial audit according to the Accounting Act can be carried out even in the case if the annual report was passed by the management of the legal person. If the legal person has a supervisory board, the management can decide on the annual financial statements after it has considered the written report of the supervisory board.
The general deadline for the publication of the annual report in Hungary is May 31, this date also being applicable to the yearly tax returns. This date has however been postponed to September 30 by the government, so it may be an option for companies to simply postpone the shareholders’ meeting until the epidemic has somewhat subsided and travel becomes possible again.
The simplified decision-making process described above enables legal entities to operate smoothly, but the regulation contained in the decree is extremely complex and incomplete due to the special circumstances under which it was passed. Therefore it is important for corporate decision-makers to take their decisions with the greatest care and after thorough examination of the legal regulations.
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