News of VJT & Partners
We welcome Emőke Buzogány to the law team!
3 September 2020
We congratulated Emőke on becoming a lawyer with a big celebration associated with a bowling party.
Emőke has been working with us since 2017. We have been pleased to follow her progress from associate to lawyer. Easily and lovingly connected to us and our clients, her serene temperament brought a cheerful breeze to our firm.
She is enthusiastic and determined in her work, her attention is always on the clients. She has a good overview and management of complex transactions with diverse documentation and over the years has become an expert in corporate law issues.
She is open and sociable, present with heart and hand at the cultural events of our firm.
We appreciate this year’s Legal 500 review
Legal500 EMEA 2020
Legal 500’s publication appraising law firms is like the Michelin guide for restaurants. It ranks offices, shows the strengths of the firms, highlights significant personalities, and shares customer feedback with the reader. Here’s a bunch of reviews of this year’s Legal500 ranking.
VJT & Partners is absolutely at the top of Employment Law! VJT’s managing partner, János Tamás Varga, received the highest recognition given by the publication and was included in the Hall of Fame. It’s like being in the company of the best master chefs. János Tamás, who, for decades, has only received praise from clients, has joined the team of the most recommended lawyers in recognition of his high-quality, excellent work. The publication highlights the leader of our employment law team, Zoltán Csernus, as a “Leading Individual”. Our office is also among the first to be recommended in this area, so we can say that we are absolutely at the top in terms of employment law!
Our office has also achieved excellent results in the field of Data Protection. Law firms were evaluated for the first time in this field, and we were immediately ranked among the best as the only independent Hungarian law firm. Our data protection guru, Endre Várady, is recommended among the Leading Individuals, which is the highest recognition in the category of data protection. Our customers have said that we provide a super-efficient service and the reliability of our privacy team is second to none!
In the field of Commercial, Corporate and M&A, the publication highlights the pair of János Tamás Varga and András Lovretity, who have forged together in high-volume transactions. János Tamás’ strategic thinking is perfectly complemented by András' practicality. The hard-hitting team is further strengthened by Zoltán Csernus, Andrea Belényi and Tamás Virág.
In the TMT area, we are listed as the highest rated independent law firm in Hungary. Our clients, who are at the forefront of the profession, have emphasized that our TMT team with first-class knowledge is constantly working at the highest level. The publication mentions János Tamás Varga and Endre Várady among the bests.
VJT & Partners also has a prominent position in the field of Competition Law. Our clients consider us to be “super-efficient” and they also described Andrea Belényi's professional competence with the same word combination.
Eszter Vezse is now working for us as a counsel!
28 April 2020
Eszter took the oath of attorney a few days ago, therefore the VJT team lost an associate, but gained a lawyer!
Eszter started working for us before graduation, and her enthusiasm has been unbroken ever since. During her junior years, all the lawyers in the office were happy to work with her because she is not only reliable and conscientious, but always strives for perfection in her work.
Eszter's work is praised not only by lawyers but also by clients, because with her natural kindness and commitment she has helped many of our clients settle difficult situations. One of her most important skills is cooperation, which is also a cornerstone of our office.
Eszter will work in the areas of insurance law, commercial contracts and real estate law.
Covid-19 – What employers in Hungary need to keep in mind
Last updated: 30 March 2020
Can we make it public within the company that one of our employees has been diagnosed with the disease?
If our employee has been diagnosed with the disease after returning from a holiday from abroad and has not been working since then, nor has been in contact with another employee, then we cannot make his or her illness public within the company. If our employee was infected while he or she was working, it is reasonable to inform those colleagues who may have been in contact with the patient. However, even in this case it will not be justifiable to inform all staff working at different premises or in separate buildings. If we provide information in-house revealing the name, we must first inform our sick worker about this. Also, we must ensure that the human dignity of our employee is not compromised by this situation and that only the name of the patient is published.
VJT & Partners wishes you a Happy New Year!
2020 is a special year for us. Why? This short video reveals.
Andrea Belényi and Endre Várady will join our office as a partner from January 2020
Welcome on board!
Our firm's team is expanding with two new partners this year, both dedicated, enthusiastic, and highly experienced lawyers.
Andrea joined us in 2018 from the field of competition law to expand her expertise into data protection and other regulatory areas. She's an excellent project manager, great speaker and engine of our DPO training program. With her expertise and perseverance, she has taken a big part in developing the Adatsólyom GDPR Compliance Software, which was awarded the Wolters Kluwer Lawyer Award for the second year running.
Endre has spent his early years with us, and since 2016 he has been strengthening the team as a senior lawyer. He specialises in technology, outsourcing and data protection, where he takes the Wolters Kluwer Lawyer Award for the second time as team leader. He also edits many of the firm's publications.
"I am very pleased that they are now part of the team that manages our firm," said János Tamás Varga, our managing partner. - "Welcome on board!"
Double award-winning data protection team!
Best Data protection team of the year 2019
We defended our title of "Data Protection Team of the Year"! At a solemn award ceremony, Wolters Kluwer repeated the awards to the best lawyers, and our firm again won the award in the best data protection team category. Our team created a healthcare privacy solution that is accessible and easy to use for a wide range of medical practices. “With the creation of Doki and Multidoki, our goal was to put a fast, affordable, yet professional GDPR compliance tool in the hands of doctors,” said Andrea Belényi. Beside Andrea, Endre Várady and Eszter Kata Tamás attended the ceremony, and the other colleagues who stayed at home cheered on the other as one man.
Do you know a good law firm in Mexico? Of course!
Report on the Global Leaders Forum Annual Meeting in London
Our firm participated in the Global Leaders Forum this year, where a total of 45 small and large offices dealing with technology rights and data management were represented around the world. This year, Andrea Belényi attended the meeting.
One of the goals of the meeting is to get to know each other both as a person and as a professional, so that the participating firms can work together or recommend each other to their clients if needed. Andrea said that this part was very successful thanks to the joint programs and quick dates, and she met many kind, professional people from all over the world.
Meetings were enriched by presentations and roundtables that addressed the most pressing issues of our time in all countries. For example, there was talk on how the use of artificial intelligence affects data protection compliance, or how legislation can keep pace with accelerated technological change.
“During the meetings and presentations, it became clear that very similar problems are encountered in different countries, at the level of legislation and enforcement for example. It was good to hear about them, to discuss them, I think we all widened our horizons a lot during these two days. As a data management and competition law expert, I was particularly pleased to hear how these two areas of law are evolving in parallel, at the level of legislation for instance.” said Dr. Andrea Belényi. "We will definitely be there again next year."
Zoltán Csernus in EELA’s leading team
For years our office has participated in the EELA – the European Employment Lawyers Association – conferences, which gathers together the European Union’s Employment Law offices. The organization’s conferences provide an opportunity for Employment Lawyers to exchange experiences and build relationships. Additionally, one representative from each Member State is recruited by the board (EELA’s management body) to represent the interests of the law firms in their country through their work in the organization. At the last conference, held in Tallinn, the members vote of confidence was for Zoltán Csernus, consequently Zoltán now represents Hungary’s affairs in the organization. Congratulations Zoltán on your appointment!
We are highly greatful to our clients for their appreciation
Chambers Europe 2019
This year’s Chambers Europe publication has ranked law firms again. In order to set the ranking, the staff at Chambers Europe asked our colleagues about professional issues and quizzed our clients about our work. Thank you for your appreciation!
„They are always available, reply promptly, and come up with great suggestions,” says one of our clients to whom we provided legal advice on M&A. – Lawyers blessed with business sense.” The publication highlights András Lovretity, who is very precise in legal documentation and also a strong strategist. János Tamás Varga is also praised for his tactical thinking as well as for his overall mind: „He has an eye for high-level planned business considerations and for detail at the same time.”
In the field of EMPLOYMENT, of course, the publication highlights Zoltán Csernus, the leader of the team, who has been praised by clients both for his professional skill and ability to connect on a human level: „precise, thorough, reliable and possesses up-to-date legal knowledge” and also „works in a timely manner, even with short deadlines.”
The publication highlights the experience and high-quality work of our staff in the field of TECHNOLOGY. The team is extremely reliable and takes deadlines seriously, was described by one of our clients as: “They held our hands and guided us through the whole process.”
The team also participated in the development of a GDPR compliance software.
About Endre Várady, our young colleague, our clients stated that he “is very helpful and comes back with good and conclusive counsel”. Another source states: "If we had tough and direct questions, he gave answers and worked out the process." However, in the field of enthusiastic opinions, our office manager partner János Tamás Varga finished in front , as he received effusive praise from clients, one of whom highlights that "he has a good understanding of the business environment." Another source notes: "He understands the Hungarian legal market and is extremely approachable."
Three sayings that we love in Legal 500 this year's evaluation
Legal500 EMEA 2019
Legal 500's opinion-forming, legal review publication again ranked the best law firms this year. Thanks to the excellent work of our lawyers and the satisfaction of our clients, VJT & Partners has reaped the top spot in the competition.
We appreciate this years’ ranking in three ways:
1. In a new practice area, COMPETITION, we have entered the field of view of Legal 500.
Andrea Belényi leads the competition team with an experienced, knowledgeable expert. Our office has recently been entrusted by several leading international and Hungarian companies with competition law duties.
2. Our EMPLOYMENT law team has been at the forefront for 8 years now!
Practice head Zoltán Csernus has "an instinctive understanding of business needs" and his advice is "always clear and focused on producing workable solutions within a swift timeframe" says the publication. Our employment law team advises dozens of major international and Hungarian companies.
3. In other areas of practice, we have maintained a high profile.
The publication reports in summary, that our MERGERS & ACQUISITIONS team responds immediately to emerging issues. András Lovretity's proactivity, and the speed, and precision of Zoltán Csernus are praised by customers. And who brings this together on the basis of the right values, is János Tamás Varga, managing partner. Our clients include leading Hungarian companies and major international companies.
In the area of DISPUTE RESOLUTION Zoltán Csernus is also highlighted.
In the areas of TECHNOLOGY, DATA PROTECTION AND OUTSOURCING, our customers emphasized that our friendly team always "strives for perfection” and offers "creative and tailor-made solution". Our young colleague, Endre Várady, who has been recognized by Legal 500 from among the lawyers of the next generation, is well prepared to solve problems. János Tamás Varga, in addition to being the first-rate leader in our office, is a "serious strategic thinker and an excellent leader". Customers include the world's leading online businesses and leading domestic and international companies in the application and development of technological solutions.
New GDPR challenges in Hungarian employment
The Hungarian GDPR implementation package – amending 86 sectoral laws – has brought important changes in the workplace environment. Many of the new rules may present hardships for employers, as changes will be forced upon deeply rooted traditions. The stakes are high as the employee has got a powerful tool in his hand, both in front of the data protection authority and the labour court. Companies therefore are highly advised to check their data processing practices in the employment context.
VJT & Partners has collected the key legislative changes in the employment context.
From now on, during the onboarding process employers may only ask the employee to show his/her documents (e.g. ID, driving licence, address card, tax card and qualification documents) and the employee may not make copies of these neither electronically nor in paper form. This is hard to put into practice, when the labour authority examines the lawfulness of onboarding process, but the employee cannot show the necessary onboarding documents to the labour authority (i.e. he/she lost them). Thus, a solution must be worked out which properly answers both privacy and labour inspection challenges.
No criminal background checks
The employer may ask from the employee to show his/her criminal convictions information, only under very limited circumstances, such as when the employer has a relevant financial interest to protect (such as works concerning money management, surveillance or key IT system administration). The financial interest must be backed up with the ”legitimate interest test” (showing that the employer’s interest to see the employee’s criminal conviction record is greater than the employee’s personality rights).
Stricter conditions for employee monitoring
Even before the GDPR implementation package, it was clear that the employer may monitor the employee’s work (such as monitoring of e-mail, laptop or internet use) only if the employer provides a prior notice about this action. However, the GDPR implementation package made it clear that such notice must be made in writing and it must cover why the employer’s measures are necessary and proportionate in comparison to the limitation of the employee’s personality rights.
Biometric entry methods became forbidden
From a practical point of view, as a result of the GDPR implementation package, it became forbidden to use biometric (such as, fingerprint authentication) entry systems. Some exceptions apply, but only in a very few limited cases: for example the employer may use such entry methods if the operation of such system is to protect the employees’ physical integrity and health.
CCTV rules do not stay the same either
From now on, the employer may decide on its own about the length of time CCTV records may be held, but in accordance with the storage limitation principle. Furthermore, the employer may only make CCTV records of the private area of the company, and in public areas used as private areas (such as around the entrance of the company) the employer no longer may record picture.
In a nutshell, rules on data processing in the employment context, have become significantly stricter and the expectations have also risen. Companies are advised to reconsider their current practices, policies and other documentations in this area. Endre Várady, head of VJT & Partners’ data protection team is here to assist in creating lawful and tailor-made processes.
See how we wish you a Happy New Year!
A Hungarian software offers GDPR compliance solutions
Hungarian Watch Autumn 2018
GDPR is and will remain a hot topic for every business in the EU. VJT & Partners closely worked with the consulting software developer company Simplexxy to develop the “Data Hawk” (“Adatsólyom” in Hungarian) software. Based on its installed know-how, Data Hawk screens the data processing of the companies and makes proposals on an automated basis, without any human intervention. This revolutionary law-tech solution has never been seen before. The mid-term plan is to launch Data Hawk in other Member States also.
In this interview, János Tamás Varga, head of VJT & Partners – the law firm responsible for the content of the software – shared his experience about Data Hawk.
Could you please briefly introduce Data Hawk?
Data Hawk is a stand-alone software that provides significant help especially for small- and medium-sized Hungarian enterprises and non-profit organizations in preparing for GDPR. An online questionnaire that can be used to assess GDPR compliance readiness of businesses and get an action plan on exactly what needs to be done to meet GDPR requirements. Its main motto: “You do not have to understand GDPR. It is enough to know your own business”.
Where did the idea of the Data Hawk come from?
As a lawyer in the field of data protection, when I was in the process of adopting GDPR regulations, I realised that small- and medium-sized enterprises would certainly not be able to meet the requirements of GDPR without external assistance. Paying huge penalties would mean the end of many businesses. The idea came to me to develop a stand-alone and easy-to-use online software that comes with a full GDPR screening, yet which reaches the quality of typical GDPR audits. The one filling out the questionnaire does not have to stand in line for the advice of a privacy expert, he simply answers the questions online and Data Hawk makes proposals on an automated basis, without any human intervention.
Which areas can we examine with the Data Hawk?
Data Hawk examines dozens of areas that are problematic in terms of data protection, including the most important employment and marketing areas. There are several hundred questions in the software, and the user can choose among several predefined answers to each question. Of course, not all questions need to be answered: our questionnaire leads you - the user, according to your responses, only to those questions that are relevant to your business.
Was it a big work to create such a compliance tool?
I would call it gigantic. We processed hundreds of pages on GDPR regulation and the Hungarian and European data protection practice, and then transferred the whole material into questions and responses to make it clear to everyone. Questions, answers, suggestions are all written in clear and plain language, explained in layman’s terms. We also help the user with examples to clarify more complex issues.
What is special about Data Hawk?
Data Hawk is a new milestone in the legal-tech area, a high-quality legal service that only a limited number of large and multinational companies could have afforded is now equally available to small- and medium-sized enterprises.
How much time does it take to use Data Hawk?
You can go through the questionnaire within 2-3 hours. This is realistic because in the case of a small business, the user of the questionnaire knows much more about all the ins and outs of a company than in the case of a large company where the full picture can only be grasped with the involvement of several different departments. On the other hand, Data Hawk speeds the auditing work of large companies. When we make GDPR compliance audit projects for large companies, we always ask them to use Datahawk as a first step, as it is much faster and easier to find and solve the problematic areas.
After using the questionnaire, Data Hawk processes the answers and gives an evaluation report. What can we learn from this assessment?
The evaluation includes a specific task list, accurate, personalized tasks about what to do to meet GDPR requirements. Most of these tasks can be done by the company’s owner and staff. Of course, there are also more complex tasks where an expert’s help is inevitable. But in this case, the expert gets the Data Hawk report (containing legal gaps) which makes the whole process more affordable and faster.
Can you tell about such a diversified product that it is ready?
Data Hawk is ready, but our plan is to continuously improve and update it to emerging needs. We are also paying attention to our customer feedback, and on that basis we will further improve the software. We also have the mid-term plan to launch this product in other Member States as businesses struggle there with similar GDPR compliance problems.
For further information about how Data Hawk can help your business in GDPR compliance, please contact:
VJT & Partners
János Tamás Varga, managing partner
VJT & Partners contributes to the Dual Citizenship Report
As a top tier specialised law firm in Hungary, VJT & Partners is pleased to have been selected to contribute to the Dual Citizenship Report.
The Dual Citizenship Report is a definitive guide to Dual Citizenship based on the legislation different in the numerous countries throughout the European Region through a collaboration of over 30+ European Law firms.
The report was compiled and edited by our Maltese partners, Chetcuti Cauchi Advocates and can be found on the https://www.dualcitizenshipreport.org/, which offers the report on an interactive platform, making it more widely accessible.
Our firm has contributed to the Hungary chapter, where we outlined the most recent developments in the legislation on the different ways of acquiring citizenship in our jurisdiction as well as the possibility of holding dual citizenship.
We are pleased to form part of this comprehensive legal analysis and we look forward to further contributions and updates.
See how we wish you a Happy New Year!
VJT & Partners Highly Recommended by Chambers Europe 2017
VJT & Partners is recognised for its prominent Corporate/M&A, Employment and TMT legal advice.
Leading Hungarian commercial law firm VJT & Partners has again been recommended in Chambers Europe 2017’s Hungarian chapter for its Corporate/M&A, Employment and TMT practices.
In addition, Managing Partner János Tamás Varga is recommended as a Ranked Lawyer in all three practices, with partner Zoltán Csernus recognised as a Ranked Lawyer for both Corporate /M&A and Employment law.
Chambers Europe 2017 recommends VJT & Partners for its Corporate/M&A advice in Tier 4 with János Tamás Varga ranked in Band 2 for individual lawyers and Zoltán Csernus in Band 5.
The commentary notes that the team is again noted for its "growing presence in the Hungarian commercial market" and for being "experienced in multi-jurisdictional mandates, frequently acting alongside major international firms on the Hungarian aspects of cross-border investments and corporate restructuring cases".
Clients comment that the team has "an exceptional understanding of business, a pragmatic and precise approach, and they give valuable input to the pure commercial points." Another comments that the "junior lawyers support the seniors’ work very efficiently and can manage even the shortest deadlines".
In addition, János Tamás Varga is singled out as continuing "to grow in stature in the Hungarian corporate market, following exceptional praise for his wide-ranging expertise". He is also recognised as "pragmatic, thinks rationally, and sees the bigger picture," as "very professional, open-minded and understands business needs" and "extremely commercial".
Zoltán Csernus is noted for his "clear guidance and instructions," and that he takes "care of things swiftly and without error, regardless of how complicated the issues were".
Within the Employment section, the team is ranked in Tier 2 with both János Tamás Varga and Zoltán Csernus ranked in Band 3.
The team "receives enthusiastic praise from clients for its high level of employment-specific knowledge". Clients comment that the team has "a superb level of employment law expertise, combined with a very client-centred and professional approach". Other clients agree, saying: "They have a deep knowledge of labour law, provide prompt and detailed answers, and have flexibility and availability," as well as offering "excellent value for money".
Zoltán Csernus is described by clients "extremely knowledgeable, and very responsive and approachable," with a "deep understanding of clients’ legal and commercial needs," with János Tamás Varga described by a client as "very client-centred with brilliant organising skills," and by the guide as "highly skilled in handling employment-related litigation".
Within TMT the firm is ranked in Tier 2, with János Tamás Varga ranked in Band 2.
The practice is noted for its "high-profile transactions in the telecoms and technology sectors," its "impressive client roster" and its advice "on both the supplier and consumer sides…on data protection and advertising issues". Its work with "major international law firms on cross-border cases" is also highlighted. Clients say the team has "truly experienced specialists for all types of IT, internet and data protection matters. They are the best technology team in the market with wide international reach," and "they are always ready to work out truly tailor-made solutions for every single matter. They are especially strong at data protection, privacy issues and all types of internet-related matters".
János Tamás Varga is singled out by clients for combining "unparalleled technology industry expertise with superb organisational and communication skills".
VJT & Partners Managing Partner János Tamás Varga comments: "These results position the team as firmly embedded in the top tier of law firms in Hungary, alongside the leading international firms. We continue to work hard to ensure we provide exactly what our clients need and to ensure that our advice is accessible and always commercial."
Further information can be accessed here.
VJT & Partners recognised among the leading law firms in Hungary by EMEA Legal 500
Prestigious independent legal directory EMEA Legal 500, 2017 again includes VJT & Partners among the leading commercial law firms in Hungary.
The EMEA Legal 500, published in April 2017 has recognised VJT & Partners as a top-tier firm for Employment for the sixth year running and as very highly recommended in a further four practice areas.
The guide comments that the ‘leading’ employment group at the firm has ‘deep knowledge’, provides ‘prompt and detailed answers’ and offers ‘flexibility and availability’. It is recognised as "having a standalone labour department which is active across the whole spectrum of employment matters, with complementary expertise in immigration law."
Practice head Zoltán Csernus is acknowledged as a ‘go-to lawyer’, with both Managing Partner János Tamás Varga and Zoltán Csernus included in the list of elite ‘Leading Individuals’ for employment.
Three of VJT & Partners’ other practices continue to be recommended in the second tier: Commercial, Corporate and M&A, Dispute Resolution and TMT, while the firm’s Real Estate and Construction practice is in the fourth tier.
All of VJT & Partners’ partners are recommended in The Legal 500 Europe, Middle East & Africa 2017 editorial.
The guide also makes the following comments:
Commercial, corporate and M&A: "Clients of VJT & Partners are full of praise for the ‘very reliable team’ of ‘true professionals’, who are ‘organised, expedient, accurate and flexible’. Corporate and M&A work form a cornerstone of the firm, which has a clear focus and specialism in cross-border work. András Lovretity has ‘an intricate understanding of the client’s business’. János Tamás Varga, Zoltán Csernus and Gábor Hacsi are also highly recommended."
Dispute Resolution: "VJT & Partners’ ‘dedicated, efficient and hardworking’ team excels at employment litigation, with insurance cases being another key focus area. Practice head Zoltán Csernus is ‘very confident and active at court hearings’."
TMT: "The ‘approachable, fast and efficient’ team at VJT & Partners is noted for its ‘tailor-made solutions’. It is ‘especially strong in data protection, privacy issues and internet-related matters’, and has been advising Google on right-to-be-forgotten matters. Gábor Hacsi and János Tamás Varga are well regarded."
Real estate and construction: "‘Very skilled real estate lawyer’ Gábor Hacsi heads the practice at VJT & Partners alongside János Tamás Varga, who ‘always sees the big picture’. András Lovretity, who joined the firm from an in-house counsel position in the aviation sector, is ‘very experienced in real estate matters’."
The Legal 500 series of legal directories provides an in-depth assessment of law firms based on intensive independent research of firms and their clients.
János Tamás Varga, Managing Partner of VJT & Partners, commented: "Being ranked alongside our international and domestic peers at such a high level is testament to the hard work and dedication the whole team puts into offering the highest level of legal advice. I am delighted with this recognition, both personally and for the firm as a whole, but recognise that there is always more we can do."
Further information can be accessed here.
VJT & Partners: Should I sell my business?
Dr János Tamás Varga // MM // May 2017
What happens in business is always unpredictable - any businessman is aware of this. Anything could happen. Good times and bad times alternate each other, and it might occur that - in order to remain in competition - a change of ownership is the only solution. The idea of selling one’s company might come up when the younger generation won’t be continuing the business when the older one plans to retire. It could also happen that the person in question desires to get involved in other areas of life. And then comes the big question: Should I sell my business?
The MM’s new series of articles introduces the reader in the process of selling a company, presenting the details, meanwhile the big picture of the process can also be seen. Our professional partner is Dr. János Tamás Varga, lawyer and managing partner of VJT & Partners Law Firm; in the past twenty years, he has conducted more than 60 acquisitions that included the sale of companies, mostly involving foreign entities as buyers.
Part no 1. What reasons could lead to the sale of a company?
MM: Most of the technical development or producer companies are competitive on the Hungarian market. These companies have been established and built by Hungarian entrepreneurs, and are operated in the present also by their founders. When does the time come for a business owner to consider selling his company?
VJT: Each and every sale of a company is unique, but typical situations are also seen.
Sometimes the market conditions lead the owner to the decision of selling his company. For example, when the competition requires developments or extra resources that the owner cannot or will not undertake. On the other hand, it is very possible that no external pressure exists, only the company holds an outstanding market position, therefore there is a demand for the company’s acquisition.
Another typical situation could result from the internal relationships within the company. For example, the founder of the company gets tired, perhaps wants to deal with other things, therefore desires to hand over the business, but there is no one to take it.
MM: Could it be the case that the manager - already at the moment of establishment – plans to build the business and then a couple of years later to sell it?
VJT: In several industries this case is quite common. But for the traditional technical industry where the companies deal with development and production, the change of ownership right after a company is establishment is not very likely. The value in this field is found in the technical knowledge gained and developed through decades, in solid production technology, and not in fast changes. Usually, production requires decades to achieve a market value that results in an appropriate selling price for the owner.
MM: Is it likely that the founder draws back right after the acquisition and the new owner also takes the company in hand right afterwards?
VJT: Nowadays it is very unlikely, that the remaining colleagues say goodbye to the former owner on the day of the acquisition. Usually, the purchaser expresses his specific demand for the work and experience of the former owner-manager of the company, especially in the 6-18 months period following the acquisition. The extent of this demand varies from case to case, depending on instance of the experience of the vendor in the relevant industry and in the Hungarian market.
It is imaginable that the vendor requests the operative management of the prior owner’s company during the transitionary period; it is also possible that the managing of a running project is required, or there could be demand only for consultation. It’s not unusual that the vendor does not acquire all at once and does not buy 100% of the company, thus the transitionary period might be longer. It’s typical that in the first step the vendor acquires a majority ownership, this way the former owner remains in the company with a minority share for an interim period. And of course, it is possible that the vendor does not acquire the whole company, so the prior owner remains in the company for a longer period.
MM: I suppose we managed to cover the essential questions of the sale of a company. How should we continue?
VJT: If the decision to sell has been made, the only remaining question is: How to proceed to sale? This will be the topic of our next conversation.
VJT & Partners Highly Recommended in Chambers Global 2017 for Corporate/M&A
Leading Hungarian commercial law firm VJT & Partners has been highly ranked in Chambers Global 2017 for its work in Corporate/M&A. In addition, both Managing Partner János Tamás Varga and corporate partner Zoltán Csernus have been individually recommended as Ranked Lawyers for their expertise in corporate M&A work.
Within the Hungarian section, Chambers Global 2017 ranks VJT & Partners for corporate/M&A in Band 4, positioning the firm as an elite corporate law firm in Hungary. In addition, János Tamás Varga has been ranked in Band 2, and Zoltán Csernus in Band 5, for individual lawyers in Corporate/M&A in Hungary.
Chambers Global commented that János Tamás Varga "continues to grow in stature in the Hungarian corporate market, following exceptional praise for his wide-ranging expertise". Chambers cites clients who comment that Dr. Varga is "pragmatic, thinks rationally and sees the bigger picture", while also noting that "he is very professional, open-minded and understands business needs".
Zoltán Csernus has been ranked for the first time as a recommended individual in corporate/M&A in Chambers Global 2017. He is recommended for his "clear guidance and instructions", with clients recommending him for "taking care of things swiftly and without error, regardless of how complicated the issues were". His knowledge base spans distribution, supply, agency, purchase and franchising agreements.
VJT & Partners provides market-leading corporate M&A advice to a wide range of companies operating across multiple industries. Its work in this area is widely recognised as commensurate with that of major international law firms’ Hungarian offerings.
Further information can be accessed here.
We wish you a Happy Year of the Rooster!
‘Silence is Acceptance’ in Competition Law
Dr Laura Kőszegi, Dr Gábor Hacsi // origo.hu // 28 February 2017
Even in the most honorable of business transactions, any manager could easily find himself in a discussion about anti-competitive matters and thereby suddenly become a member of a cartel. The manager’s conduct may consequently result in a fine imposed on his company of up to several hundred million Hungarian forints. Managers are usually aware that agreements between competitors aimed to reconcile their business policies are considered anti-competitive agreements i.e. cartels. Cartels are unlawful and severely punished with a large fine by the Hungarian Competition Authority. However, what they usually do not know that they could become a member of a cartel without agreeing to it in written form or even verbally, but simply through silent assent.
The ‘silence is acceptance’ principle means that anyone who participates in a discussion where an anti-competitive agreement is formed automatically becomes a member of such cartel regardless of his own – even passive – action, since his presence can be considered supportive to the anti-competitive behaviour.
The question arises: what can one to do to avoid such a scenario?
Beyond abstaining from participating in the cartel, it is also essential to condemn and clearly distance ourselves from the initiative when an idea of concluding a cartel begins to take shape. In order to defend ourselves efficiently, we have to be prepared and contact our legal counsel about how to behave and how to separate ourselves from being suspected of participation in cartel initiatives.Read the whole article in Hungarian
Mistake to be avoided in a non-competition agreement
Dr Eszter Vezse, Dr Zoltán Csernus // origo.hu // 7 February 2017
When concluding a non-competition agreement an employer must be very careful, otherwise a lot of money could be lost. In addition, the employee can use the experience and acknowledge on another employer and it may strengthen the employer's competitors.
The basic wage and the compensation of the non-competition agreement must be separated in the agreement. The Hungarian Supreme Court has declared in its decision that the compensation of the non-competition agreement is not part of the base wage. Therefore, if the base wage includes the compensation, the non-competition agreement will be void and the employee may start working for the competitor right after the termination of employment.
In order to avoid further disputes, the employer and the employee must comply with some basic rules. The minimum non-competition period and the minimum compensation is prescribed by law. Besides that, the geographic and professional area covered by the agreement must be reasonable and it can not unduly restrict the employee. Contractual penalties can also be stipulated, but the amount should be defined really carefully.
The provisions of the non-competition agreement should be defined carefully in order to protect the economic interests of the employer and to properly regulate the further employment of the worker.Read the whole article in Hungarian
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