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A “Special” Employee Stock Ownership Plan has been Introduced

A “Special” Employee Stock Ownership Plan has been Introduced

Hungary
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The provisions creating the legal framework of the Special Employee Stock Ownership Plan (“Special ESOP”) entered into force on 13 July 2021, providing a new special ownership opportunity for employees or board members of limited companies to acquire stocks at a more favourable rate than before.

The Special ESOP is based on certain general provisions of an employee stock ownership plan, however, it offers a special, more favourable opportunity to employees, members of the supervisory board or the board of directors / managing directors of a joint stock company or limited liability company to acquire the company’s shares or stocks.

Special ESOP may be established upon request of its employees with the launch of the plan, at the inaugural general assembly with at least ten participants, by the adoption of the statutes and the election of a body responsible for the operational management of the Special ESOP and the managing directors. Employees, simultaneously to the establishment of a Special ESOP, may create an asset managing foundation as well.

The number of the participants of the Special ESOP cannot be increased after its establishment, and as a principle, a membership cannot be terminated (with the exception of the transfer). In case of a Special ESOP, the membership may be inherited. The plan may be operated for an at least ten year-long limited period, after which the assets acquired by the implementing entity or their equivalent value must be transferred to the participants and the implementing entity must be dissolved.

By Eszter Kamocsay-Berta, Managing Partner, KCG Partners Law Firm

Hungary Knowledge Partner

Nagy és Trócsányi was founded in 1991, turned into limited professional partnership (in Hungarian: ügyvédi iroda) in 1992, with the aim of offering sophisticated legal services. The firm continues to seek excellence in a comprehensive and modern practice, which spans international commercial and business law. 

The firm’s lawyers provide clients with advice and representation in an active, thoughtful and ethical manner, with a real understanding of clients‘ business needs and the markets in which they operate.

The firm is one of the largest home-grown independent law firms in Hungary. Currently Nagy és Trócsányi has 26 lawyers out of which there are 8 active partners. All partners are equity partners.

Nagy és Trócsányi is a legal entity and registered with the Budapest Bar Association. All lawyers of the Budapest office are either members of, or registered as clerks with, the Budapest Bar Association. Several of the firm’s lawyers are admitted attorneys or registered as legal consultants in New York.

The firm advises a broad range of clients, including numerous multinational corporations. 

Our activity focuses on the following practice areas: M&A, company law, litigation and dispute resolution, real estate law, banking and finance, project financing, insolvency and restructuring, venture capital investment, taxation, competition, utilities, energy, media and telecommunication.

Nagy és Trócsányi is the exclusive member firm in Hungary for Lex Mundi – the world’s leading network of independent law firms with in-depth experience in 100+countries worldwide.

The firm advises a broad range of clients, including numerous multinational corporations. Among our key clients are: OTP Bank, Sberbank, Erste Bank, Scania, KS ORKA, Mannvit, DAF Trucks, Booking.com, Museum of Fine Arts of Budapest, Hungarian Post Pte Ltd, Hiventures, Strabag, CPI Hungary, Givaudan, Marks & Spencer, CBA.

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