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• Texas Shoot-out and other security clauses in the Syndicate (Shareholders) Agreement

  118-129

  Gergely Szabó

  Views:

  72

  The shareholders agreement is considered a typical contract. This agreement is concluded by and between the members of the company in order to establish the rules of the cooperation among them, their behaviour towards and expectations from each other in connection with the company.

  The agreement is often used in the practice, since its flexible construction enables to rule various types of transaction. For example, in Hungary there is a growing tendency i.e.the major investments and joint venture agreements are being established in the frame of a shareholders’ agreement.

  On the other hand, drafting such a contract is a complex procedure. This type of agreement is not governed by specific law, therefore the general rules of the contract law may be linefore. Furthermore the shareholders’ agreement is located at the borderline between the civil and company law, and in a given case it might be complicated to enforce the provisions of the agreement. For example, if the member breaches the voting provision outlined in the shareholders’ agreement, then the resolution passed upon the contract breach cannot be challenged.

  Due to lack of a specific law, the practice created the adequate legal securities to ensure the enforcement of the cooperation structure outlined in the shareholders’ agreement.

  As the first analysed security, the purpose of the buy-out clauses (Russian Roulette, Texas Shoot-out, Dutch Auction, Put-Option, Call-Option) is to ensure the company’s permanent operation, if there is an insoluble dispute among the members, which obstructs the decision making, and consequently the operation of the company, as well. The concept of the buy-out clause is to settle the dispute in the way of taking over the participation of the involved member by another member.

  The exit clauses (Drag Along, Carry Along) aimed to encumber or to unburden the step out from the company. The entitled person is able to sell the shares of the remaining members to the buyer, or to oblige the seller to sell his own and the entitled person’s participations jointly to the buyer.

  The takeover clauses’ (Control Flip Over, Swiss Clause) duty is to enable the enforcement of the corporate legal obligations outlined in the agreement. If a member fails to fulfil his obligations, the entitled person may acquire his participation, which will enable him to pass the necessary resolution in the members meeting (general meeting). After the voting, the “seller” is entitled to buy back his participation at the same price.

  If the members want to exclude acquiring participation by third persons in the company without their approval, there are adequate securities to be specified in the shareholders’ agreement (for example the right of first refusal, option right).

  By the specific type of shareholders’ agreement the creditor makes investments in the company and becomes member in order to secure the transaction. If the company or the original owners of the company breach the contract, they will be held individually liable till the limit of the investmented amount.

  The shareholders’ agreement is an efficient option to rule major transactions, and with the help of the securities described in this study, the investor could feel his money in safe. On the other hand, there are still a lot of questions to be answered. For example the compliance of these securities with the strict provisions of the law. It is the duty of the practice to reveal the answers.

• The syndicate agreement

  45-57

  Krisztina Nagy Barna

  Views:

  231

  Before the new codex of civil law the law of business associations was cogent, that is why the syndicate agreement became a popular contract again. Yes, I would like to emphasize again, because in the past decade, after the commercial law became valid, this type of agreement and cooperation, what was regulated by the syndicate agreement was well known in the Hungarian civil law. Namely this commercial law had a provision, which said, that every occasional associations i.e. civil association or consortiums, are actually civil associations not business associations. The bottom line is, they are contractual collaborations, with one purpose, to make profit. If someone comes to make this kind of cooperation/collaboration, it has to be regulated by a syndicate agreement.

  After the WWII, the syndicate agreement was not popular. By the time when the first law of business association entered into force, this type of cooperation reached high popularity, because of the cogent rules, in respect of the private limited company. This is the reason why the syndicateswith vote became so popular,and they will be after a dispositive civil codex.

  First I would like to present syndicate agreement of company law, second I would like to give a brief overview about the syndicate agreement of public law.

• Thoughts on the successions of the business shares

  János Dúl

  Views:

  93

  The article focuses on the successions of the business shares which are in the Hungarian limited liability companies. There are several changes because of the new Civil Code that affected this area although we have to examine the former regulation because of the period of validity, too.

  The succession law is the area of the law with whom every people has connection at least once in their life. The number of the legacies grows in which business shares can be founded because more and more people are participating in business societies.

  The new method of the regulation differs from the previous. The new Hungarian Civil Code (Act V of 2013) consists of not only the “classical” civil law (for example property law, law of contracts) but the family law even the business law. Before this there were two separate laws and because of this situation we have to examine the relation of these laws and their methods of regulations.

  Afterwards we study the state of the successors in the Hungarian limited liability companies. It diverges from the other companies because the limited liability companies are transitions between general and limited partnerships and joint-stock companies. There were more ideas how to regulate this company; at the end it has differences but not so significant.

• Doubtful questions in connection with the effectiveness of insurance contracts

  László Pribula

  Views:

  57

  The dispensation of justice most often makes decisions in legal disputes about contract law on the basis of the general rules of contract law. The freedom of making contracts and the dynamism of contract law have resulted in an agreement that the conditions of the contract and the general rules should generally be considered to an increasing extent rather than the special regulations referring to the given contract. However, there are some contracts which theme, subjects and content require the application of special rules that result in solutions hard to interpret for parties inexperienced in law and that are radically different from those recommended by the general rules of contract law. Insurance contracts are those type of contracts, where the rules determine when the contract comes into existence and effect and when the services are due. These regulations are based on a logic that is radically different from the general rules, so they can often lead to serious misunderstandings. It is discernable in the judiciary practice that the dispensation of justice respects the specific features of insurance contracts, but tries to interpret the rules in a way that draws near to the general rules of contract law. The decisions of the Hungarian Supreme Court give priority to the interests of the insured parties and allow in fewer cases when the insurance company is exempted of its obligation of payment. However, judiciary practice has little effect on the content of insurance law. It seems justified to make insurance companies work out as detailed and clear conditions as possible and make them disclose the orders basically concerning their obligation of running risks.

• Family businesses and shareholders' agreements - possible links

  99-124

  Zoltán József Fazakas

  Views:

  97

  The concept of a family company is not defined in current law. In the case of companies in which members of a family have a decisive influence, it allows only a formal approach. However, in addition to the formal approach, the substance of the company, the specific nature of family interests and values, justify an examination of the company from other points of view, which allow not only the long-term commercial economic activity but also the specific nature of family relationships to be examined on the basis of company law. It is therefore of the utmost importance that family companies should reflect family relationships, the need to operate intergenerationally and protect the family nature of the company, and ensure the family's long-term prosperity. The combination of the formal and substantive elements makes it possible to conclude that family companies are special legal entities in which a particular family community has a decisive influence, has and represents specific interests and values, among which the protection of family assets, the aim of intergenerational operation and the safeguarding of the long-term well-being of family members are to be highlighted. The Civil Code provides for multiple means of achieving these interests, in addition to the classic instruments of company law, including the possibility of shareholders’ agreement.

• Assessing of company shares in marital property sharing lawsuits

  László Csirmaz

  Views:

  134

  New types of assets has appeared in property lawsuits in the past 25 years, such as company shares (one of the most important kind of valuable rights). This fact made forensic experts - who deal with evaluation of these assets - to obtain additional comprehensive knowledge.  The Kuria quoted that "the expert opinion is an underlying proof for the court judgment, an objective and precise means of proof, which usually affects directly the decisions of the court," and I think the date of the completion of the trial can be affected significantly.

  The author of the study and writing of the addition was designed to court pointed out weaknesses in the analyzed case by case decisions perceived peer involvement draws the attention of the interested public on the company's assessment of literature on the importance of knowledge. To that aim the light of the experience gained from the analysis of the case law, above all, the study seeks to publish the company's fundamental valuation basic concepts summarize the literature on the same value in generally accepted and applied definitions and outline the applicable assessment methods. It is certain that the regulation of property relations in the new Code requires the renewal of judicial regulation of professional activity as well.

• Judicial review of company decisions in the view of jurisprudence

  29-48.

  Judit Barta

  Views:

  102

  The study presents in detail and in a systematic way the legal rules of judicial review of decisions of companies in the light of case law.

  The study describes when a review of a decision can be requested, who the parties are, how the time limit for bringing an action is set, what kind of decision the court can issue, groups and describes typical infringement decisions, and then distinguishes the legal institution from the judicial oversight.

• Strategic Questions of the electronic administrative procedure in the European Union

  50-56

  Péter Ravasz

  Views:

  93

  Radical changes could be observed at the of the 20th century and can also be found especially in the 21st century regarding the electronic administrative procedure both in the European Union and in the Member States. These changes primarily originate from the technical development, to which administration has to reflect; furthermore administration should be more faster and can be made closer to the citizens. I review the European Union's strategies and priorities concerning electronic administration in this paper. The European Union's powers are mainly focused on the implementation of such services in all Member States approximately at the same time in this field, if possible on the same technical grounds because only this way can the real interoperability between the different systems be guaranteed. But the interoperability of the national administrations is significantly limited by the linguistic diversity of the European Union because in the absence of a common official langugae real interoperability is limited by the different official languages used in the Member States. Such fields are for example the company registers and its accessibility through the European e-Justice Portal. Although, the efforts for e-administratation of the European Union do not cover all areas of the national administrations, furthermore while the European Union's regulation is focused on the economically efficient activites, Member States have to prioritise issues of citizens' and legal persons' everyday lives when creating and realising eloctronic administration.