"From 1 September 2007 it will again be allowed for executive officers (especially Managing Directors) in Hungary to establish an employment relationship with the company, PricewaterhouseCoopers said in its latest Tax and Legal Alert on Thursday.Consequently, the provisions of the employment can be applied to the relationship between the company and the Managing Directors.
Those members of a one-member limited liability company, or of a limited or unlimited partnership, who are at the same time executive officers of these companies, are still not entitled to establish an employment relationship with their companies.
The provisions which came into force on 1 July 2006 prohibited the application of employment, however as these rules had not worked perfectly, therefore it became an option again for companies to establish employment relationships with the executive officers.
If an employment relationship is established, then both the special provisions of the Labour Code concerning executive employees and the regulation of the Act on Business Associations on executive officers shall be applied.
According to the new provisions the existing civil law based relationships can be maintained, however if the executive officer performs his/her duties on a daily basis it is advisable to restore his/her employment relationship."
Source:
Portfolio Online Financial Journal
12.07.2007