Abstract
Hungarian cooperative law is based on valuable traditions. Reviewing the historical development of cooperative law, three primary eras can be identified.
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Notes
- 1.
- 2.
Nizsalovszky (1933), under the title of “Cooperatives”, art. 223–257.
- 3.
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The most important law of this period was Act III of 1967, which was on farmer agricultural cooperatives together with Act IV of 1967, which was on the development of the legal estate and leasehold. The latter act institutionalized the legal estate of the agricultural cooperative in Hungarian law, required registration of the legal title of acquisition of ownership and determined the content of it. Act III of 1967 played an important role in this period because after its promulgation on 1 January 1968 agricultural cooperatives could become a legal estate. Previously, agricultural cooperatives could only have a leasehold. In fact, this law organized and clarified the legal relationships of agricultural cooperatives, but because of the contemporary importance of agriculture in the Hungarian economy, this law was considered as only a basic rule in the field of the cooperative regulation.
- 5.
After 1945, the Hungarian cooperative law was fundamentally determined by the two eras of the socialist economy. Until 1968, the so-called “direct economy” management style characterized the economic system. In this system the influence of the State was extremely important. The role of the State became more flexible as time progressed and the management style became more indirect. As a result, economic organizations could gain more freedom. On this topic, see Berend (1974).
- 6.
Governmental Decree 30/1971 (X.2.) was the determining rule concerning execution.
- 7.
It is worth mentioning, that the development of a Hungarian constitutional basis for cooperative legislation dramatically changed the Hungarian system compared to the preceding socialist regime, as well as the development of the cooperative definition, which was modified in the Polgári Törvénykönyv [Civil Code].
- 8.
Two laws on agricultural and industrial cooperatives may be pointed out from the aspect of property law. The first one was Act XV of 1989 modifying Act III of 1971 on cooperative law, and the second one was Act XX of 1989 modifying Act III of 1967 on agricultural cooperatives. For industrial cooperatives law-decree 32 of 1991 had great importance, because it modified the previous law-decree on industrial cooperatives.
- 9.
Concerning agricultural land, there was a possibility to start compensation procedures and the giving of the so-called “part proportion” of the land to the legal owner. In addition, an independent rule entered into force in connection with lands in mutual use and owned by the State.
- 10.
The exact name of the Act is Act II of 1992 on the entry into force of Act I of 1992 and on the transitional rules.
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- 12.
http://net.jogtar.hu/jr/gen/hjegy_doc.cgi?docid=A0600010.TV, accessed 20 July 2012.
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A typical example of the independent regulation is the Act on housing cooperative. See for the Act in Hungarian, http://net.jogtar.hu/jr/gen/hjegy_doc.cgi?docid=A0400115.TV, accessed 1 July, 2012. A striking example for the lower level provision of rules concerning special type of cooperatives is the government decree on social cooperatives. See for the government decree in Hungarian, http://www.complex.hu/jr/gen/hjegy_doc.cgi?docid=A0600141.KOR, accessed 1 July 2012.
- 18.
For the special rules see Act CXII of 1996 on credit institutes and financial undertakings.
- 19.
http://www.complex.hu/kzldat/t1200001.htm/t1200001.htm, accessed 30 July 2012.
- 20.
Text of the Act on cooperatives sec. 4.
- 21.
The Act names the following cooperatives regulated by other special rules too: insurance cooperatives, (for the special rules see Act LX of 2003 on insurance companies and insurance activities) credit and savings cooperatives; for the special rules see Act LX of 2003 on insurance companies and insurance activities—housing cooperatives, social cooperatives, school cooperatives, employment cooperatives.
- 22.
For data of February 2012 see the webpage: http://www.losz.hu/oszt/kozlemeny.php, accessed 5 July 2012. According to this data the number of the cooperatives in Hungary is 2,959. The most successful cooperative chain is the so-called COOP Group and it operates in the sector of small trade. Its turnover is 510 billion forints annually. For earlier data see http://tudatosvasarlo.hu/cikk/szocialis-szovetkezetek-magyarorszagon, accessed 4 July 2012. The basic time for this data was December 2010. The data changes continually.
In 2010 there were about 5,300 cooperatives with about 1 million 800 thousand members in Hungary. The capital of the Hungarian cooperatives was 230 billion forints, the income was 800 billion, and the profit was about 6 billion forints. Of these, there were about four thousand housing cooperatives, consumer cooperatives, industrial, savings and student cooperatives. This data shows the success of cooperatives in the agricultural sector. In Hungary the tradition and the importance of agricultural cooperatives is very significant.
- 23.
For the interaction between the international cooperative basic principles and the definition of cooperatives, see Bak Klára, A nemzetközi szövetkezeti alapelvek és a szövetkezet fogalmának összefüggése a szabályozásban [The context between the international cooperative basic principles and the definition of cooperatives in the regulation.], http://www.szovetkezetikutato.hu/kozlesre.php, accessed 30 July 2012.
- 24.
From the entry into force of the Act, social cooperatives were consistently founded. For data, see http://tudatosvasarlo.hu/cikk/szocialis-szovetkezetek-magyarorszagon, accessed 4 July 2012; see furthermore Roelants (2003), pp. 109–113.
- 25.
Section 8, citing the Act: “A social cooperative is a cooperative that fits the definition set out in Section 7: whose objective is to find employment for its members who are without a job or are socially disadvantaged, and to encourage the improvement of their social situation by other means; or that operates as a school cooperative. The name of a social cooperative shall contain the designation ‘social cooperative’, and the name of a school cooperative shall contain the designation ‘school cooperative’. Similarly to certain European cooperative regulations social cooperatives in the Hungarian regulation have special goals and they own a specific subjective circle.” It must be emphasized that from 2012 a new form of social cooperative would be registered in the Act—the so-called employment cooperative.
- 26.
For the analysis of Italian and other European regulations, see Réti (2010), pp. 47–73.
- 27.
For Act CLXXV of 2011 on the legal status of civil organizations and on public benefit organizations http://net.jogtar.hu/jr/gen/hjegy_doc.cgi?docid=A1100175.TV, accessed 12 July 2012.
- 28.
An analyst of the Hungarian Cooperative Law pointed out this feature several times. E.g. Professor Kuncz Ödön had written about the activity of the cooperative and about the relationship between members and the cooperative as a special relationship—the so-called “cooperative cooperation”. See for this, Kuncz (1939–1941).
- 29.
Article 5a, sec. 10, states that social cooperatives, except for school cooperatives, may have natural persons, local governments, national governments, and their associations with juridical persons as members.
- 30.
Sec. 14.
- 31.
Art. 1, sec. 23 of Act X states that, “All members must be invited to the general meeting. Members may request information from the cooperative bodies and executive officers. Members have the right to make proposals and to cast their votes in connection with items on the agenda. Each member shall have one vote in the general meeting”.
- 32.
See for the rules of the investor membership Act X, sec. 60.
- 33.
The capital contribution is regulated in secs. 49–51 of Act X.
- 34.
See sec. 44 for share certificates.
- 35.
See secs. 52–53 for loans.
- 36.
Supplementary payments are regulated in sec. 54.
- 37.
The fellowship fund is regulated in Act X, secs. 57–59, 71.
- 38.
See secs. 20–26 of Act X.
- 39.
See sec. 27 of Act X.
- 40.
See sec. 28 of Act X.
- 41.
See secs. 29–34 of Act X.
- 42.
See secs. 35–40.
- 43.
For the legal qualification of a cooperatives see sec. 3 subsec. 33 stating that, “‘Business partnership’ shall mean business associations, European public limited-liability companies (including European holding companies), European cooperative societies, professional associations, cooperatives, housing cooperatives, sole proprietorships, law offices, court bailiffs’ offices, notaries’ offices, patent practitioners offices and forest management associations and ESOP organizations”.
- 44.
See sec. 2.
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1.
The persons defined in subsecs. (2)–(4) shall be subject to corporate tax.
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2.
The following resident persons shall be deemed resident taxpayers: (a) business associations (including nonprofit business associations, regulated real estate investment pre-companies, regulated real estate investment companies and regulated real estate investment special purpose companies), groupings and European public limited-liability companies (including European holding companies), and European cooperative societies”.
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1.
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Further Reading
Benkő A, Domé M, Hegedüs I, Nagy L, Veres J (1988) Szövetkezeti jog [Cooperative law] (university notes). Course Book Publisher, Budapest
Acknowledgments
Thank you to the editors for the opportunity to write this essay, and to Bak Klára (Ph.D. fellow at the ELTE University Budapest, Faculty of Law) for contributing to its translation into English.
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Réti, M. (2013). Hungary. In: Cracogna, D., Fici, A., Henrÿ, H. (eds) International Handbook of Cooperative Law. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-30129-2_19
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