Company Law
NAGY, Csongor István
[email protected]
Types of business entities
 Partnerships: general and limited
partnership
 Limited liability company
 Stock corporation (shareholding company)
General Partnership
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Unlimited & joint and several liability!
Small, family businesses.
Easy to establish and to administer.
Representative: managing partner.
No minimum capital requirement.
Limited partnerships
 The same rules are applicable as in case of
general partnerships, with the exception that
there is a limited partner.
 The liability of the limited partner does not
exceed the money he/she invested.
 The question whether the limited partner may
take part in the management of the company
depends on the local law.
Limited liability company
• Limited liability company (LLC ~ USA),
Private company limited by shares (Ltd. ~ UK),
GmbH (Germany), Kft. (Hungary), SARL
(France)
• Limited liability of the members, who own
shares (called business quota in Hungary).
• Representation: managing director
• Transfer of shares: some restrictions may apply,
e.g. right of preemption, assent of the members’
meeting.
Stock corporation
 Closely & publicly held stock corporation.
 Publicly held stock corporation: shares/stock
publicly traded on the capital market (stock
exchange) ~ in case of a closely held
corporation public trading is forbidden
(similar to LLC).
 Board of Directors, Supervisory Board,
Auditors, Assembly.
Competition law
NAGY, Csongor István
[email protected]
Fields of competition law
• Unfair competition law: acts contrary to
business ethics
• Antitrust:
– Cartels/agreements in restraint of trade
– Abuse of dominant position
– Merger control
• Competition rules applicable to states:
– State aid
– Market liberalization
Sanction of antitrust violations
– competition fine;
– actions for damages;
– exclusion from public tenders;
– criminal punishment or occupation ban (not in
all countries)
Agreements
• Automatic condemnation / effects-analysis
– Hardcore agreements
– Agreements subject to effects-analysis (‘it
depends’)
• Horizontal and vertical agreements
Horizontal hardcore cartels
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Price-fixing between competitors
Market-sharing, customer-sharing agreements
Reduction of output
Holding back technological development
Exchange of pricing information
Leniency policy
• Complete immunity:
• information that enables the institution of the
proceedings, or
• Information the enables the establishing of the
violation
• Reduction of the fine:
• evidence of added-value
• admission of guilt
Vertical hardcore agreements
• Resale price fixing (minimum and concrete
prices, BUT maximum and recommended
resale prices are not automatically prohibited)
• Absolute territorial protection (ban on passive
sales); BUT relative territorial protection (ban
on active sales) is not automatically
prohibited.
Effect type agreements
• Horizontal Agreements
– Joint selling/purchasing
– Research & Development
– Specialization
• Vertical agreements
– Non-compete clauses
Abuse of dominant position
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Tying/bundling
Predatory pricing
Price/Margin squeeze
Refusal to deal/essential facilities
Loyalty rebates
Mergers
• Over a certain turnover all transactions are to
be notified to the competition authority.
• EU dimension: Commission; otherwise:
national competence.
• No dominant position may be created by way
of merger. Internal growth is certainly not
prohibited.
• Conditions/commitments:
divestiture,
behavioral commitments.