1. Cross-border mergers of companies are believed to facilitate the mobility and thus improve the general business position of small and medium-sized companies.
2. The Cross-border Merger Directive was implemented in the Hungarian legislation by a single act, namely Act CXL of 2007 on Cross-border Merger of Limited Liability Companies (the ‘CXL Act’). The Act, which entered into force on 15 December 2007, does not extend the scope of the Cross-border Merger Directive and sets only the rules of cross-border mergers.
Matters not covered by the CXL Act are subject to Act IV of 2006 on Business Companies (the ‘Companies Act’) and Act V of 2006 on Public Company Information, Company Registration and Winding-up Proceedings (the ‘Corporate Procedure Act’).
The CXL Act avails itself of the provision of Article 3(2) of the Cross-border Merger Directive and ensures the participation in cross-border mergers of cooperatives and European cooperative societies having a domestic corporate seat (Section 13 CXL Act). These companies, however, must take into account domestic rules on their mergers and may, thus, merge only with certain kinds of corporate companies in accordance with Hungarian law.
Scope of the new rules
3. The CXL Act governs the cross-border mergers of limited liability companies with a registered office in Hungary, and the foundation of companies with a registered office in Hungary by way of the cross-border mergers of such companies. Furthermore, the Act establishes the related company registration proceedings in Hungary (Section 1(1) CXL Act).