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The transitional rules following the end of ’state of emergency’

The transitional rules following the end of ’state of emergency’ have been established by Act LVIII of 2020 on the Transition Period, the most important of its provisions summarized as follows:

According to the transitional provisions, in the sectors of tourism, restaurant and catering services, entertainment, gambling, film industry, performers, event coordinators and sport services the lease of non-residential premises may not be terminated by the lessor until 30 June 2020. Lease agreements of state or municipally owned premises, which would have expired during the ’state of emergency,’ may be extended – without a new tender – until 16 September 2020 by the written declaration of the lessee, issued during the emergency or on the last day of the lease term at the latest.

Derogations from the Labour Code implemented during the emergency remain in effect until 1 July 2020, however, working time frames ordered unilaterally or by mutual agreement of the parties shall remain applicable until the end of the working time frame, regardless of the termination of ‘state of the emergency’.

The Békés County Government Office acting as the state employment body, may – at the request of the employer – allow the use of a working time frame of up to 24 months or a settlement period in the case of a new investment of national economic interest generating employment.

Most of the transitional rules concern legal entities and other organizations not considered legal entities, and these rules remain in force until 31 December 2020.

The transitional provisions affect the operation of the main decision-making bodies and the procedure for convening them. The temporary rules prescribe for the decision-making bodies of legal entities to be convened within 90 days of end of the ‘state of emergency’ (which ended on 18 June according to Prime Minister Decision No. 41/2020. (VI. 17), i.e. 16 September 2020, and the following shall be on their agenda in accordance with the Gov. Decree:

·         decisions of the management during ‘state of emergency’ on matters within the competence of the decision-making body;

·         decisions regarding mandates of the organizations’ managing directors, board members or auditors, which expired during the ‘state of emergency’ if no decision has been made to extend or renew the mandates

·         decisions regarding the share capital if they could not have been made during the ‘state of emergency’;

·         in case of private limited liability companies, decisions regarding the reduction of the share capital if they could not have been made during the ‘state of emergency’.

Although it is already possible to make decisions in person, until 31 December 2020 it is also possible to make decisions through flexible solutions such as electronic decision-making without holding a physical meeting, even if the deed of foundation does not provide for its possibility or conditions.

Regardless of their expired mandate, the managing directors (supervisory board member, etc.) shall continue to perform their duties even if the legal person did not provide for renewal of terms, until the date determined by the decision-making body’s resolution, but until 90 days after the end of ‘state of emergency’ at the latest (16 September 2020).

If the mandate is terminated after the end of ‘state of emergency’, but before session of the decision-making body, it shall also be put on agenda, however, the mandate shall continue to be effective until the date set out in the resolution, but until 90 days after the end of ‘state of emergency’ at the latest.


Legal entities’ decision making bodies may also hold their sessions online.

In order to prevent misuse of the extended deadline for adopting the Annual report, where its adoption requires at least a ¾ majority of votes, resolving a valid decision on any other matter requires unanimous vote until the Annual report is adopted, until 30 September 2020, whichever is earlier.According to the transitional provisions, in the sectors of tourism, restaurant and catering services, entertainment, gambling, film industry, performers, event coordinators and sport services the lease of non-residential premises may not be terminated by the lessor until 30 June 2020. Lease agreements of state or municipally owned premises, which would have expired during the ’state of emergency,’ may be extended – without a new tender – until 16 September 2020 by the written declaration of the lessee, issued during the emergency or on the last day of the lease term at the latest.


Derogations from the Labour Code implemented during the emergency remain in effect until 1 July 2020, however, working time frames ordered unilaterally or by mutual agreement of the parties shall remain applicable until the end of the working time frame, regardless of the termination of ‘state of the emergency’.


The Békés County Government Office acting as the state employment body, may – at the request of the employer – allow the use of a working time frame of up to 24 months or a settlement period in the case of a new investment of national economic interest generating employment.

Most of the transitional rules concern legal entities and other organizations not considered legal entities, and these rules remain in force until 31 December 2020.

The transitional provisions affect the operation of the main decision-making bodies and the procedure for convening them. The temporary rules prescribe for the decision-making bodies of legal entities to be convened within 90 days of end of the ‘state of emergency’ (which ended on 18 June according to Prime Minister Decision No. 41/2020. (VI. 17), i.e. 16 September 2020, and the following shall be on their agenda in accordance with the Gov. Decree:

·         decisions of the management during ‘state of emergency’ on matters within the competence of the decision-making body;

·         decisions regarding mandates of the organizations’ managing directors, board members or auditors, which expired during the ‘state of emergency’ if no decision has been made to extend or renew the mandates

·         decisions regarding the share capital if they could not have been made during the ‘state of emergency’;

·         in case of private limited liability companies, decisions regarding the reduction of the share capital if they could not have been made during the ‘state of emergency’.

Although it is already possible to make decisions in person, until 31 December 2020 it is also possible to make decisions through flexible solutions such as electronic decision-making without holding a physical meeting, even if the deed of foundation does not provide for its possibility or conditions.

Regardless of their expired mandate, the managing directors (supervisory board member, etc.) shall continue to perform their duties even if the legal person did not provide for renewal of terms, until the date determined by the decision-making body’s resolution, but until 90 days after the end of ‘state of emergency’ at the latest (16 September 2020).

If the mandate is terminated after the end of ‘state of emergency’, but before session of the decision-making body, it shall also be put on agenda, however, the mandate shall continue to be effective until the date set out in the resolution, but until 90 days after the end of ‘state of emergency’ at the latest.


Legal entities’ decision making bodies may also hold their sessions online.

In order to prevent misuse of the extended deadline for adopting the Annual report, where its adoption requires at least a ¾ majority of votes, resolving a valid decision on any other matter requires unanimous vote until the Annual report is adopted, until 30 September 2020, whichever is earlier.
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