Registration of Entrepreneurial Legal Entity in Georgia
Registration of Entrepreneurial Legal Entity in Georgia: A legal entity is an organized formation established for a certain purpose, having own property, which independently takes responsibility based on its property, assumes rights and obligations, concludes agreements, and is entitled to be presented as complainant and defendant in court. Its purpose is to engage in business activities. Entrepreneurial activity is considered a legitimate and not-single activity for making a profit, in an independent and organized way.
Registration of Entrepreneurial Legal Entity
The following enterprises have a legal entity status:
A legal entity is established since the moment of registration in the Entrepreneurial and Non-entrepreneurial (Non-commercial) legal entities Registry.
General Partnership is a company where several persons (partners) conduct entrepreneurial activity jointly, under one common company name, and are jointly and severally liable with all their assets to the creditors as joint debtors.
A company name of the General Partnership should include at least one partner’s name plus “GP”. If the GP unites only Legal Entities, its name should contain one of the Entity’s company name plus “GP”. All partners are entitled to manage the General Partnership (unless otherwise provided by the Charter).
A limited partnership is a company where several persons carry out entrepreneurial activity under one common company name, where the liability of one or several partners to creditors of the partnership is limited to the payment of a fixed-guarantee amount – limited partners (komandits) and the liability of other partners is not limited – general partners (komplementars).
General partners (komplementars) shall be jointly and severally liable to creditors with all their assets. Together with the rules stated in the general provisions of this Law, the rules for the general partnership shall apply in respect of a limited partnership, unless otherwise provided for by this Chapter.
A partner of a limited partnership may be natural as well as a legal person. Shares in the capital of the company may be apportioned only among the komandits, unless otherwise provided for by the partners’ agreement.
The company name of the Limited Partnership should contain at least the name of one partner plus “LP”. If only legal entities are united in the Limited Partnership, its name should contain one of their company names plus “LP”.
In the case of Limited Partnership general partners (komplementars) are eligible to manage it and in case of a legal entity – an assigned physical person. Limited partners (komandits) do not participate in the managing of the partnership; they may not object against actions undertaken by the general partner (komplementar) within ordinary business activity. Limited partners are entitled to vote only in the case provided by the Charter of the Partnership.
A company whose liability to creditors is limited to its assets shall be a limited liability company. Such a company may be established by a single person. The agreement of the partners of an enterprise on reducing liability shall be void against third parties.
The capital of a limited liability company shall be divided into shares. A share shall be transferable.
The rights and obligations of the partners and the initial distribution of shares is defined by the company statute (by partners’ agreement). It may be defined by the statute, that at making a decision, partners’ voting right and/or profit/loss distribution between partners is not proportional to their shares.
Directors are entitled to manage Limited Liability Company unless otherwise provided by the Charter (partners’ agreement).
Registration of A limited liability company (LLC):
A limited liability company (LLC) will be registered by the National Agency of Public Registry, a limited liability company (LLC) under public law within the Ministry of Justice of Georgia (‘the registration authority’).
A limited liability company (LLC) will be deemed established upon registration with the Entrepreneurial Registry. The existence of the limited liability company (LLC) shall be verified by an extract from the Entrepreneurial Registry. The registration of a limited liability company (LLC) shall imply both state and tax registration. The registration decision of the registration authority shall take effect upon officially providing notice to the concerned party of the decision or upon publication of the decision. A decision shall be deemed published when it has been placed on the website of the registration authority.
Joint Stock Company shall be a company whose capital is divided into shares of a certain class and quantity as determined by the Charter of the company. A share shall be an intangible registered security that evidences the obligations of a joint stock company to a partner (shareholder) and the rights of the shareholder in the joint stock company. The Charter of a joint stock company may determine a value below which the values of shares may not be set for the initial issuance of the shares for a given class (par value).
The liability of a joint stock company to its creditors shall be limited to all of its assets. The shareholder of a joint stock company shall not be liable for the obligations of the joint stock company. When founding a joint stock company, the capital can be determined in any amount.
Shares are registered by a joint stock company itself or by the independent registrar in cases provided by law.
A shareholder’s title to a share shall be evidenced by a record in the Share Register of the joint stock company or with a nominee holder’s record. The shareholder shall be given an extract from the Share Register of a joint stock company or an extract for a nominee holder.
Directors are entitled to manage the Joint Stock Company, unless otherwise provided by the Charter (by partners’ agreement).
A Cooperative shall be a company based on the labor activity of its members or established for developing the business and increasing the income of the members. The objective of a cooperative shall be the satisfaction of interests of the members. A cooperative shall not aim primarily at gaining profit.
Cooperatives shall include:
- a) cooperatives obtaining raw materials for members by way of extracting raw materials;
- b) cooperatives jointly selling agricultural products or hunting and fishery produce;
- c) cooperatives producing agricultural products and manufacturing different articles, and selling them at joint expenses (agricultural and production cooperatives);
- d) cooperatives buying consumer goods by wholesale and selling them by retail;
- e) cooperatives buying and producing, as well as jointly using material and technical resources necessary for agricultural production or for hunting and fishing;
- f) agricultural-credit cooperatives;
- g) consumer (diversified) cooperatives whose legal, economic and social bases shall be governed by the Law of Georgia on Consumer Cooperatives;
- h) non-bank deposit institutes – credit unions;
- i) agricultural cooperatives whose legal, economic and social bases shall be governed by this Law and the Law of Georgia on Agricultural Cooperatives.
The liability of a cooperative to creditors shall be limited to its own property.
Upon founding the company the parties should agree on amount input into the capital. A deposit may be real and intangible property, fulfillment of work and rendering of service. The founders of a cooperative shall determine the minimum quantity (defined deposit) of a unit for its members. One member of a cooperative may hold several units.
Directors are entitled to manage the Cooperative, unless otherwise provided by the Charter (by partners’ agreement).