In the life of a business, the company name may need to be changed. This can happen because there is a change of ownership and the previous owner does not consent to the continuation of the existing company name, since it was the owner's family name. However, the modification may also occur for reasons that the company wants to enter a foreign market, so instead of the company name, it wants to include a foreign language keyword. The company decides, but the court of registration approves the change.
So the question arises: when does the change of company name come into effect? When should business partners be informed about this? When does the invoice have to be issued for the new company name and is it necessary to modify the existing contracts due to the change of company name?
In Hungary, we can talk about several dates regarding a company law amendment. In the case of a limited liability company, one of these dates is the day of the members' meeting, when the members decide on the change. The other date is the date of registration, when the court of registration registers the change in the commercial register. There is also the date of publication, which means publication of company data in the Company Gazette. If we take the company's certificate of incorporation in hand, we can see that these dates are also reflected in the commercial register. Normally, the date of the change is the date on which the general meeting makes its decision on the change of the company name. In fact, this date is also associated with the entry into force of the change. The date of registration is a later date, as the application for registration of changes must be submitted to the court of registration, where there is a deadline of 15 working days for issuing the registration order.
Despite the above, however, it is not certain that the date of the change, i.e. the date of the resolution of the general meeting and the entry into force of the amendment, are the same. Based on the legislation in force, companies have the possibility to determine the date of change. There is only one condition: the date must not be earlier than the date of the underlying decision. This means that the general meeting may not pass a decision that the change has already entered into force before the date of the decision. However, it is possible for the change to occur later than the date of the general meeting.
Therefore, the date of the change is the date determined by the company as described above or the date of the resolution of the general meeting. At the same time, it is important to highlight the role of the court of registration. The court decides on the registration of the change, so it may happen that the company name chosen by the company is not registered because the court objects to the chosen name. This could occur because there is a company already registered with the same name or it is not sufficiently distinguishable from the name of another company with a similar field of activity. In this case, problems may arise, as the company may have already informed its partners about the changed company name, it may be that invoices for the new company name have already been issued, and the new company name letterhead, filing folder or envelope have also been ordered at the printing house. Therefore, it is important to act in accordance with the law when choosing a company name, and it is advisable to schedule the information of partners, the order of printing products and the issuance of invoices after receiving the order of the court on the registration.
In one of its decisions, the Curia also emphasized that a change of company name becomes legal only if it has been examined from the point of view of legality by the court of registration and a decision has been passed on the change since the company name changes upon registration at the court of registration. (Case number: KGD2012.53).
Book a meeting: https://calendly.com/andrea-egertz
