kft

Korlátolt Felelősségű Társaság, abbreviated as Kft, is the Hungarian private limited liability company. It is the most common form of private business entity in Hungary and is identified by the suffix "Kft" in its name. A Kft is a separate legal entity, and the liability of its owners is limited to their contributed capital.

Formation and governance: A Kft is formed by an articles of association and registration with the Court of Registration (Cégbíróság) through the company registry. It can have one or more shareholders, who contribute capital as specified in the articles. The company is represented and managed by a managing director or directors, who are authorized to act on behalf of the company. Depending on the size and the articles, a supervisory board may also be established to oversee management.

Capital and liability: The company’s capital is divided into shares owned by the shareholders. Shareholders are not personally liable for the company’s obligations beyond their contributed capital. The articles of association determine the capital amount, the distribution of shares, and the conditions for capital calls and transfers.

Operations and compliance: Kfts engage in a wide range of commercial activities and are subject to Hungarian corporate tax rules, accounting and reporting requirements, and value-added tax where applicable. Annual financial statements must be prepared and filed, and share transfers are typically subject to provisions in the articles and statutory notification.

Comparison and use: The Kft is designed for private, often small to medium-sized ventures, offering limited liability with comparatively flexible governance. It contrasts with a Rt (joint-stock company), which is used for larger, publicly traded entities, and with Bt (partnership), where liability can be more extensive. The designation Kft in a company name signals this legal form to others in Hungary and beyond.