Kft. or Zrt.? Key Differences Between Hungary's Two Most Popular Company Forms

When setting up a company in Hungary, in the vast majority of cases the choice comes down to two forms: the limited liability company (Kft.) and the private company limited by shares (Zrt.). Both are capital companies in which the members' or shareholders' personal assets are, as a general rule, shielded from the company's debts – but that is roughly where the similarities end. In this article we walk through the most important differences based exclusively on the Hungarian Civil Code (Act V of 2013, "Ptk."), looking separately at incorporation and at day-to-day operation.

1. What is what? – The two forms defined

Under Section 3:159 of the Civil Code, a Kft. is a business association founded with registered capital made up of capital contributions (quotas) of a predetermined amount. A member's obligation towards the company is limited to providing their capital contribution and any other contribution of pecuniary value set out in the articles of association.

A company limited by shares (Rt.), by contrast, operates under Section 3:210 of the Civil Code with share capital consisting of a predetermined number of shares with a set nominal value, and a shareholder's obligation is limited to paying the nominal value (or issue price) of their shares.

An important clarification: the "Zrt." is not a separate company form but one of the two operating modes of the company limited by shares. Under Section 3:211 of the Civil Code, a company whose shares are listed on a stock exchange is a public company limited by shares (Nyrt.), while a company whose shares are not listed is a private company limited by shares (Zrt.). This article focuses on the Zrt., which is far more common in practice.

In terms of liability, the two forms rest on the same principle: unless the law provides otherwise, neither the member of a Kft. nor a shareholder is required to answer for the company's obligations. So if limited liability is your only criterion, there is nothing to choose between them – the real differences lie elsewhere.

2. Differences at incorporation

Minimum capital

The most visible difference is the mandatory minimum capital. Under Section 3:161(4) of the Civil Code, the registered capital of a Kft. may not be less than HUF 3,000,000 (roughly EUR 7,500), and no individual capital contribution may be below HUF 100,000. The share capital of a Zrt., under Section 3:212(2), must be at least HUF 5,000,000 (roughly EUR 12,500) – for comparison, an Nyrt. requires HUF 20,000,000.

Rules on paying in the capital

The Kft. is surprisingly flexible here. Under Section 3:162 of the Civil Code, the articles of association may provide that the cash contribution need not be paid in at all before registration: the member may even satisfy it later out of profits that would otherwise be distributable as dividends. The law sets a limit, however: if the full cash contribution has not been provided by the end of the second full financial year following registration, the member must make it up. For in-kind contributions the rule is that if their value reaches half of the registered capital, they must be made available to the company in full before the registration application is filed (Section 3:163).

For the Zrt., the Civil Code prescribes a stricter and more detailed regime. Under Section 3:212(3), the cash portion at incorporation may not be less than thirty per cent of the share capital – so a company limited by shares cannot be founded with in-kind contributions alone. Under Section 3:252, the company may only be registered once the founders have paid in at least twenty-five per cent of the nominal value (or issue price) of the shares they undertook to take up, and any in-kind contribution reaching twenty-five per cent of the share capital has been made available. The full nominal value must be paid within one year of registration, and in-kind contributions must be provided within three years.

Gathering members or shareholders, and the founding document

Both forms are private by nature: it is prohibited to recruit the members of a Kft. (Section 3:160) or the shareholders and share capital of a Zrt. (Section 3:249) through a public call.

A Kft. is founded with articles of association (társasági szerződés), a Zrt. with statutes (alapszabály). The mandatory content of a Zrt.'s statutes is broader: under Section 3:250 they must include, among other things, the founders' undertaking to take up all shares, the amount of the share capital, and the number, nominal value and form of production of the shares to be issued. A Zrt.'s shares may be produced in printed or dematerialised form (Section 3:214).

3. Differences in operation

What embodies your ownership?

This is the deepest structural difference between the two forms. In a Kft., the totality of membership rights and obligations is the business quota (üzletrész), which comes into existence upon the company's registration, with its size following the capital contribution (Section 3:164). The quota is not a security. In a Zrt., by contrast, membership rights are embodied in the share, which under Section 3:213 is a registered, negotiable security with a nominal value.

Transfers

The transfer of a business quota must be put in writing, and the acquirer must notify the company within eight days (Section 3:168). Quotas may be transferred freely between existing members (Section 3:166), but a transfer to an outsider is only possible if the member has provided their capital contribution in full, and in the case of a transfer for cash consideration, the other members, the company, and a person designated by the company – in that order – hold a statutory right analogous to a right of first refusal (Section 3:167). A share, by comparison, circulates freely as a security under the general rules; however, a Zrt.'s statutes may restrict transfers or make them subject to the company's consent (Sections 3:219–3:220).

Supreme body and management

The supreme body of a Kft. is the members' meeting (taggyűlés) (Section 3:188); that of a company limited by shares is the general meeting (közgyűlés) (Section 3:268). Their function is similar, but the detailed rules on convening, agenda and decision-making are more formalised for the company limited by shares.

The management of a Kft. is carried out by one or more managing directors (ügyvezető), who – where there are several – act independently as a general rule (Section 3:196). In a company limited by shares, management is collegiate: it is the task of a board of directors of at least three natural persons, which exercises its rights as a body (Section 3:282). The Zrt. has a simplification option: its statutes may provide that the powers of the board of directors are exercised by a single executive officer, the chief executive officer (vezérigazgató) (Section 3:283).

Differentiating members' rights

In a Kft., quotas of equal size carry equal membership rights (Section 3:164). A company limited by shares, on the other hand, may issue several classes of shares under Section 3:228 – ordinary, preference, employee, interest-bearing and redeemable shares – and within preference shares, different share classes may be created. If you plan to bring in investors and allocate differentiated dividend or voting rights, the Zrt. offers a far more finely tunable toolkit.

4. The differences at a glance

Which one should you choose?

The character of the two forms emerges clearly from the Civil Code. The Kft. is the simpler, cheaper and more flexible option: lower minimum capital, more permissive payment rules, single-person management. In exchange, transferring quotas is more cumbersome and members' rights are less differentiable. The Zrt. demands higher capital and more formalised operation, but the share as a security offers easier transferability, and the system of share classes allows a flexible allocation of rights – not to mention the far-from-negligible market factor that the company-limited-by-shares form conveys a weightier image to many business partners.

This article is for general information purposes only and does not constitute legal advice. It is based exclusively on the provisions in force of Book Three of Act V of 2013 on the Civil Code (Ptk.). The legal environment may change – please seek professional advice in specific matters. Last updated: July 2026.