VERIFICATION OR DUE DILIGENCE OF REAL ESTATE IN HUNGARY

VERIFICATION OR DUE DILIGENCE OF REAL ESTATE IN HUNGARY

Author

Prykhodko Andrii

An audit is mandatory in Hungary. An audit of financial statements is mandatory if the company’s turnover in the last two years exceeds HUF 100,000,000 and the number of employees exceeds 50 people;

The annual report is also submitted to the Ministry. Companies whose assets do not exceed 500 million forints, and the number of employees – 50 people, can prepare an annual report in a simplified form;

The tax return must be submitted by March 31 every year.

Legal due diligence is the process of gathering, understanding and evaluating all the legal risks involved during the M&A process. During due diligence, the buyer reviews all documents related to the target company and interviews people associated with it.

Legal due diligence typically includes investigations into the following areas: corporate, commercial contracts, employment, intellectual property, information systems, environment, health and safety, regulatory compliance, competition, litigation, property and tax.

Legal analysis and verification of the company in Hungary includes the following provisions:

•  Research of share capital, its structure and corporate documents,
•  Analysis of personnel and relevant documentation in the personnel field,
•  Verification of compliance with the legislation and policies of the country, including GDPR,
•  Analysis of business contracts and counterparties,
•  Verification of the legal status of property, funds and other assets of the enterprise, as well as the presence of intellectual property and its protection,
•  Checking the presence or absence or status of courts or criminal or administrative disputes.
•  Compliance with environmental standards.

Depending on the type and size of the company, the due diligence may include:

•  Legal aspects related to contracts, corporate structure and governance, industrial and intellectual property, administrative and environmental permits, employees, competition, social security and regulatory compliance.
•  Financial and accounting aspects related to financial statements and accounting records, investors, debit and credit
•  Assessment of the real value of the company and determination of the sale price.

Since this is a purchase from a Hungarian company, Due Diligence will be conducted in accordance with the rules of Hungarian law.

Therefore, every aspect will be analyzed in accordance with the legislation of the European Union and of course with the legislation of Hungary.

Therefore, DUE DILIGENCE is a LEGAL BUSINESS AUDIT

The legal company “Prikhodko and Partners” provides the following services.

Before buying a company, you must understand its condition, including legal, tax, accounting, financial and other risks. Due diligence is carried out in the interests of both the business owner (Vendor Due Diligence) and the potential investor (Buyer Due Diligence).

In what cases is it necessary to conduct a legal audit of a business:

•  Buying a new business or selling your own
•  Absorption of business
•  Analysis of investment attractiveness
•  Analysis of risks and attractiveness of the company
•  Business financing or lending

Question:

What is the cost or how much does it cost to check a company (business) in Hungary?

To get an answer to this question, it is necessary to understand that the cost of due diligence in Hungary, like anywhere, depends on the volume of work that lawyers and auditors need to carry out, on the number of issues that are investigated, on the volume of materials provided for verification, on the complexity in access to the information that needs to be checked.

Depending on this, there are at least two types of business verification

Full due diligence report (full scope) – the most detailed and complete analysis of all provided documents, open sources of information, as well as sources of information with limited access.

Selective due diligence report (red flag report) — only those questions raised for research are checked.