Compulsory chamber registration – a new-old obligation for business organizations

From January 1, 2012, the Act on Chambers of Commerce re-introduced a previously eliminated administration obligation for business organizations. The compulsory registration andwith chambers of commerce– the express legislative purpose of which was the further development of the system of the chambers commerce and to raise funding for the chambers for this purpose – is however somewhat different from the earlier regulation. In the current issue of our newsletter, we provide information on registration with chambers of commerce.

Organizations having registration obligation
According to the regulations effective from the beginning of the year, newly established companies must apply for registration with chambers from January 1, while existing economic organizations are obliged to do so by March 1.

The registration obligation applies to economic organizations (which are defined by the act as economic companies, single member companies, associations, companies of certain legal persons, subsidiaries, the Hungarian branches of enterprises having their registered seat abroad, cooperatives with the exception of housing cooperatives, private entrepreneurs and agricultural producers eligible for agricultural and rural development subsidies). The economic organizations naming agriculture and forestry as their main activity and agricultural producers are not obliged to initiate registration.

Registration with the chamber of commerce of the given region must be requested within 5 working days of registration by the court of registration in the case of newly established economic organizations obliged to register with the court of registration and within 5 working days of registration with the Central Public Administration and Electronic Public Services Authority in the case of private entrepreneurs. The act also applies to existing and operating economic organizations, which must fulfil the registration obligation until March 1, 2012.
Registration with the competent chamber is not enough to fulfil the registration obligation. The act also requires economic organizations to initiate the updating of their data within 5 working days of any change.

The registration procedure
In the chamber registration procedure, economic organizations will have to submit their registration applications signed and executed on behalf of the company to the regionally competent chamber of commerce on paper. Based on the communication of the Hungarian Chamber of Commerce and Industry, electronic submission will also be possible from the end of January 2012.

The application must contain the name, registered seat, site, branch office, the main activity and actually performed other activities of the economic organization as well as the organization’s classification based on the Act on Small- and Medium-sized Enterprises and their Development Support.

The sample form available on the website of the chamber includes in addition to the compulsory data prescribed by the act and based on the authorization provided in the act, other information on the economic organizations the reporting and the entry in the register of which is optional. Such data currently includes quantified data regarding the size of the company (statistical headcount, net sales revenue) and the declaration on the performance of foreign trade activities. The third type of data provided on the form is contact details, which are only provided for internal use and are not available to the general public. The supply of such contact details is however compulsory.

Detailed instructions are provided for the filling out of the form also helping economic organizations in determining their classification under the Act on Small- and Medium-sized Enterprises and their Development Support.

Registration fee and sanctions of failure to meet the registration obligation
The amount of the chamber contribution to be paid by economic organizations is HUF 5,000 annually. The contribution is payable until March 31 of each year to the chamber of the respective region.

If the chamber of commerce of the respective region detects that an economic organization is not listed in the chamber register, it will instruct the organization to fulfil this obligation within five working days. If the organization fails to comply, the competent chamber of commerce will register the economic organization in the chamber register and take measures for the collection of the chamber contribution. The act regards unpaid chamber contributions as public debt, which can be collected by the tax authorities as taxes.

Other information
In addition to the above, we also have to mention that no member relationship is established between the economic organizations and the chambers as a result of the registration with the chamber of commerce of the respective region. Accordingly, the economic organizations will not be entitled to the services coming with chamber membership. However, the economic organizations having member status may deduct the amount of the compulsory chamber contribution from their membership fees.

The Newsletter contains general information. Therefore, the content of the Newsletter may not be regarded as professional advice or comprehensive information for decision-making. This information – due to its nature – may not address all details, especially all circumstances of a certain transaction. Although we used every effort for our Newsletter to be comprehensive, we cannot assume liability for the outlining and interpretation of the relevant regulations.