What does due diligence mean for my Hungarian company?

Keeping your Hungarian company compliant starts with submitting all reports and accounting documents on time, paying taxes, contributions and salaries when they are due and ensuring all contracts and invoices conform to regulations. In order to ensure this, you need to gather reliable information about all your business partners; ideally, before you start any business dealings with them.

Know about your business partner

Naturally, you will need your partner’s basic data (official name, registered company seat and tax number) for contracting and invoicing purposes, but due diligence also means that you can be reasonably certain that the contractual information provided by your partner can be trusted, and ideally, documented in case of a future audit. Does your partner have a valid EU VAT number? Do they have a contract with the warehouse provider they said they would use? Do they have the necessary permits and licenses to carry out their business activity? Will they be able to deliver their services on time? Will they keep the payment deadlines? Are they on any industry or government blacklists?

Careful when buying a shelf company

Similar care must be taken when buying a shelf company. A very thorough audit is necessary to ensure that all accounting records are correct and complete, and that all deadlines, laws and contracts were met. You as the new owner are liable for all mistakes the company made, even if it was under the old management, unless the sales contract explicitly states the contrary.

Our experienced legal and accounting professionals will advise you every step of they way, checking existing contracts, advising on state and EU regulations, and requesting missing documentation. By mapping the risks ahead of time, you can avoid unexpected legal battles and extra charges, not to mention state fines and loss of revenue.

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