Official Power of Attorney Formulation in Hungary: A Guide by IST Hungary
A written power of attorney is a widely used method in Hungary for delegating authority to a representative—be it a relative, an acquaintance, or a professional lawyer. Like any other official document, a power of attorney requires proper drafting and appropriate signature authentication.
Purpose and Objectives of the Power of Attorney
When a private individual in Hungary needs to authorize another person to act on their behalf, a power of attorney must be drawn up—either in free form or based on a ready-made template. The applications for this document are extremely diverse: from solving simple everyday tasks, such as picking up an order from a dry cleaner, to participating in serious legal and corporate processes.
For instance, if a person must travel abroad while an unfinished property transaction remains in Hungary, the optimal solution is to issue a power of attorney to a lawyer. This document empowers the representative to perform all necessary actions, including receiving documentation, funds, and other assets.
Another example: when constructing a private house, the owner, unable to personally supervise the process, can delegate their functions to a third party via a power of attorney. In this case, the appointed person assumes the role of project manager: handles hiring contractors, ensures compliance with project specifications, makes payments to suppliers and contractors, and performs other related tasks.
Procedure for Formulating a Power of Attorney in Hungary
According to Section § 6:15 of the Hungarian Civil Code, a power of attorney is interpreted as a unilateral act granting the right to perform certain actions on behalf of the principal. It is important to note that in most situations, mandatory notarization is not required for the document to have legal force.
Notarization of the signature may become necessary in special cases, for example, when collecting prescription medication or arranging for the principal's parents to be admitted to a retirement home.
Persons Signing the Document
The following parties must sign the power of attorney:
The principal (the person granting the authority);
The attorney-in-fact (the agent, representative);
Two witnesses.
The document is finalized by indicating the date of its signing.
Afterwards, the power of attorney is delivered to the authorized representative, the relevant public authority, a court of law, or the principal's legal advisor—depending on the purpose for its creation. The power of attorney is valid indefinitely and can be revoked after the agent has fully performed all obligations assigned to them.
Power of Attorney on Behalf of a Legal Entity
In corporate practice, the right to sign a power of attorney is held by a person authorized to act on behalf of the company and assume obligations. Typically, this right is vested in the Chief Executive Officer, their deputy, the Managing Director, or a member of the Board of Directors. A key requirement is the official registration of the principal in the company trade register.
According to Hungarian law, a signature made on behalf of a company is valid only if it is located on the same page as the legal entity's name—above, below, or next to it.
If the company name is missing from the text of the power of attorney, it can be replaced with the organization's official seal. This also helps streamline the process when filling out a multi-page document is necessary.
When signing a power of attorney on behalf of a legal entity, the presence of witnesses is not mandatory. The signature of the managing officer combined with the company's details carries the same legal force as a separate document certified by two witnesses.
Important! The power of attorney must be signed with a pen using blue ink. A signature made in pencil is not accepted under any circumstances, and a signature in black ink can be difficult to distinguish visually from a copy of the document.
Situations Involving the Absence of an Authorized Company Representative
Circumstances may arise where the responsible company officer cannot be present for signing important documents or discussing deal terms. In such cases, a written power of attorney is prepared, in which the manager transfers their authority to a colleague, for example, the chief accountant or legal counsel.
This power of attorney must explicitly state the specific instance of its application. A document of a general nature, lacking specificity, contradicts the principles of Hungarian corporate law and is considered invalid.
Structure of the Power of Attorney
In terms of content, the power of attorney traditionally consists of three main sections:
Personal and contact details of the principal;
Personal and contact details of the attorney-in-fact;
List of delegated powers and actions.
Examples of Power of Attorney Formulations
Power of Attorney where a client of home renovation services authorizes their acquaintance to make decisions related to paying utility bills, installing heating radiators, meters, gas water heaters, and electrical wiring:
"I, the undersigned (state name given at birth, place and date of birth, mother's maiden name, citizenship, type and number of identification document, permanent residential address), hereby grant [Name of Agent] (state name, place and date of birth, mother's maiden name, citizenship, type and number of identification document, permanent residential address) permission to act on my behalf in all matters concerning my property (excluding any rights of alienation or leasing of the said property), located at: 6723 Budapest, Attila József utca 2/B VI/29."
Power of Attorney for receiving overpaid funds into a bank account at a banking institution:
"I, the undersigned (state name given at birth, place and date of birth, mother's maiden name, citizenship, type and number of identification document, permanent residential address), hereby grant [Name of Agent] (state name, place and date of birth, mother's maiden name, citizenship, type and number of identification document, permanent residential address) the right to submit to the bank on my behalf notification of the address for correspondence, fill out settlement forms, and make legally binding statements to the bank on my behalf regarding the procedure for refunding overpaid amounts remaining after the settlement of liabilities, using the forms provided by the bank.
In the context of the credit agreement to be settled, this power of attorney waives the provisions of banking secrecy in accordance with Section 161 (1) (a) of the Act on Credit Institutions."
Note: For a power of attorney intended for a bank, a copy of the principal's identification document, certified by the principal themselves, must be attached.
Formulating a Power of Attorney Outside Hungary
An Apostille is an international standardized form of certifying the legality of a document.
In cases where the power of attorney is signed abroad and subsequently presented to Hungarian authorities, an Apostille or consular legalization may be required—depending on the specific country where the principal is located.
Countries where an Apostille is not required, but authentication of the document by a local notary is permitted, include:
Albania;
Algeria;
Austria;
Belarus;
Bosnia and Herzegovina;
Bulgaria;
Vietnam;
Greece;
Egypt;
Italy;
Cuba;
Cyprus;
Macedonia;
Mongolia;
Poland;
Romania;
Russia;
Serbia;
Slovakia;
Slovenia;
North Korea;
Turkey;
France;
Croatia;
Czech Republic;
Montenegro.
Powers of Attorney that have not undergone the authentication procedure may be accepted only in a limited number of cases; therefore, we recommend taking care of this matter in advance to avoid complications in Hungary.
Conclusion
A properly drafted power of attorney significantly simplifies handling personal, legal, and commercial matters that would otherwise require the individual's physical presence in Hungary. Furthermore, the document retains its legal validity even if executed abroad.
The most critical aspect when preparing a power of attorney is the careful and responsible selection of one's representative. For personal matters, it is advisable to choose a close relative or a trusted friend as the attorney-in-fact.
The second key point is the formulation of delegated powers in an extremely clear and unambiguous manner. Third parties should have no doubt that the representative's actions are strictly confined within the framework established by the power of attorney.
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