A common stereotype prevails that banking contracts are non-negotiable, and borrowers hardly have a say in the terms of their contracts. However, this is not the case: like any economic operator, banks are also willing to compromise. Banks’ flexibility varies depending on who and when is seeking preferential treatment and on the contractual terms subject to negotiations.
If you decide to apply for bank financing, you will need to consider not only the financial terms of the loan but also whether you are ready to allow the bank to access your assets as collateral. It will probably ask for the following guarantees.
Ever since it was introduced eight years ago, the long-term investment account (TBSZ) has been a source of continuous excitement for tax advisors and their clients interested in saving on tax. This is not surprising, as the TBSZ allows business owners to take the income generated by their companies without any tax liability. And although some classic approaches to tax planning based on the TBSZ have closed over time, others are still available.
The Performance Certification Expert Board (PCEB) is playing an increasingly important role in disputes between construction-industry firms. Nevertheless, a few legal questions relating to the PCEB remain to be clarified, including that of for how long an expert opinion issued by the organisation can prevent the enforcement of contractual security (e.g. a bank guarantee). Until this issue is resolved, a party to the dispute that would otherwise possess legitimate security could be put at a disadvantage.
Although the new Civil Code that took effect in 2014 made it impossible to use a good few commonly used types of loan security, since then the legislature has gradually restored them to their rightful place. Indeed, the amendments to the Bankruptcy Act coming into effect on 1 July will go further than the previous rules, giving security options and security assignments, the same priority status as mortgages. This case is a good example of the effective cooperation between the legislature and the banking industry in Hungary.
The law is constantly in flux. While many people may find this intimidating, for us it’s precisely what makes it so exciting. We’d like to share this attitude with businesspeople and managers, and with those who just have an interest in business law, in the form of a regularly updated blog that discusses the latest tax law and commercial law issues in an accessible style. Feel free to send your questions and suggestions for topics you’d like us to cover to blog@jalsovszky.com.
