The capital of the limited liability company opened in Georgia is divided into shares and the responsibility of each member is limited to the value of his shares. The shares are freely transferable and the members may also leave them as inheritance. If a member of the company owns a single share, that share can’t be sold. At the same time, it is important to know that theentity registered as a limited liability company must add in its trading name the particle “LLC”, the abbreviation available for this legal entity.
Another important aspect referring to the limited liability company in Georgia is that this entity can be set up by an individual or by a legal entity. This is the most common business form registered in Georgia due the liability of the shareholders, which is limited to the number of shares they own in the company.
Each limited liability company is based on a charter, where all the internal regulations of the company are stipulated.
The attributions of the general meeting of the shareholders
The highest authority in alimited liability company in Georgia is the general meeting of the shareholders. The general meeting is usually taking place every year and can take decisions regarding the beginning and termination of the commercial activities in which the company is involved, the purchasing or selling real estate, buying or selling shares, the approval of the annual statements and for borrowing money, the request of paying deposits or refunding deposits, naming the directors and approving their reports.
A general meeting may also be appointed by the company’s director. He must send an invitation along with the meeting agenda to all the participants with minimum a week before the meeting. The participants may bring modifications to the agenda in maximum three days after receiving it. The participants at the meeting are allowed to take decisions only if the partners with decisional power are attending. If not, another meeting with the same agenda may be appointed. This time, the decisions are taken even if the partners with decisional power are not participating.
If an entrepreneur is willing to set up a limited liability company in Georgia, he can do it by registering at the Entrepreneurial Register. The necessary documents are:
- the company charter,
- the document which stipulates the value of the contributions of each member,
- an application which contains: the name of the company, the legal entity of the company – in this case the limited liability company, the address, the business plan, date of starting the business, date of termination of the year, details regarding the founder of the company (name, address, place of birth and the profession), the amount of share capital, documents for naming each member of the supervisory board and management board.
After depositing it, the representatives of the limited liability company must open a bank account. With this last step, the limited liability company may start its commercial activities.
The registration of company in Georgia is performed following the rules and regulations imposed by the Civil Code 1997, the Law on Entrepreneurs 1994 and the Law on Assistance and Guarantees for foreign investments.
The above mentioned documents which are necessary for the registration procedure have to be translated into the local language. Moreover, foreign investors interested in setting up a company in Georgia have to notarize the documents at a public notary.
Furthermore, the documents have to be legalised in the country in which the foreign shareholders are residents, in accordance with the provisions set up by the Hague Convention.
Those who want to register a limited liability company must know that they have to be present in the country during the incorporation procedure, for legal matters concerning the notarial aspect or to submit the requested documents at relevant authorities.
Another important aspect refers to the duration of the incorporation process. Businessmen should know that the procedure can be performed in maximum a week.
Key facts referring to Georgia
In Georgia, the standard VATrate is 18%. There are no reduced rates, but a 0% VAT rate applies to exports, services of tour operators, electrical power, international shipping activities or transfers of gold to the National Bank of Georgia.
The corporate income tax rate for a business in Georgia is 15%.
In Georgia, dividends distributed by a company are subject to a 5% dividend tax rate, no matter if the dividends are paid to a non-resident entity or an individual.
Overall, Georgia provides an attractive and welcoming business environment.
Call us now at +995 595 11 88 22 to set up an appointment with Valeri Bendianishvili, one of our specialists in company formation in Tbilisi, Georgia. Alternatively you can incorporate your company without traveling to Georgia.
As a Legal Support Team LLC client, you will benefit from the joint expertize of local lawyers and international consultants. Together we will be able to offer you the specialized help you require for your business start-up in Georgia.