It is a long-standing claim to arrange more of our cases – whether as individuals or in the representation of our company – electronically. This expectation and the practical application of solutions have been accelerated by the COVID-19 pandemic. The rapid responses to the changed circumstances have shaped our daily lives, not only temporarily, but also in the long term with its various positive benefits. One of the good practices is that the company registration procedures can be carried out fully electronically. Although the court phase itself has already been electronic, the signing of the underlying documents has mostly happened traditionally, in the personal presence of the members / managing directors by physical means. In many cases – not only regarding to the pandemic situation – it became difficult and exceeded to sign the documents each time personally, especially in case of multi-member companies, or businesses having foreign owner / managing director.

Our experience

Our experience with many of our clients is that the signatures and the countersignature related to company registration procedures can be carried out without printing a single page, within a few working days, regardless of whether the parties are separated even by an ocean.

In one of this year’s company registration procedure, we were able to finalize the documents entirely online within a few working days in case of five affected Hungarian companies of a foreign-owned group of companies having seven signatories. We received most of the registration orders – also electronically – within 1-2 working days after filing the company amendment application, which shows that the registry courts are well prepared for this practice.

Brief background

Signature with qualified electronic signature

Among electronic signatures we distinguish simple, advanced and qualified electronic signature, from which the qualified electronic signature has the equivalent legal effect of a handwritten physical (paper) signature. In Hungary the National Media and Infocommunications Authority (NMHH) records the service providers from which such qualified electronic signature can be requested, but of course the electronic signatures granted by foreign qualified trust service providers can also be used. We experience at many of our clients, that the members / managing directors – flexibly adapting to the situation caused by distance – already have suitable e-signature.

Signature with document authentication

For those who do not have an electronic signature as described above, there is also the possibility to use authentication based on identification (AVDH), which creates private document providing full evidence similarly to qualified electronic signature. Furthermore, the use of the service is free, and its only condition is to have an existing digital gateway registration. The digital gateway can be used not only by Hungarian citizens, but also by EEA citizens presenting EEA identity card or driving license, and also by foreigners out of EEA having passport.

It is therefore apparent, that AVDH is widely accessible under much more favourable conditions, thus it can serve as a real alternative to electronic signature.

The legal representative – after adequate identification – also electronically countersigns the electronically signed/AVDH authenticated documents, that has the equivalent legal effect of the previous, personally executed physical signature and countersigning, however the procedure is much more (i) faster, (ii) cost-effective and last but not least,(iii) entirely paperless.

If a company is opened to digitalize processes and is partner in retaining the rules of online reconciliations and signatures, the possibilities are given to carry out company registration procedures entirely electronically.