The companies’ actions in Georgia are usually regulated by the Civil Code of Georgia (1997), the Law "On entrepreneurs" (1994) and the Law "On assistance and guarantees for foreign investments" (1996).
The most important regulations are included in the Law on Enterprises which is regulating the organization and the operation of every legal form of business in Georgia.
The notaries, legal and accounting professions or activities related to the medicine, architecture, art and science are not considered entrepreneurial activities and are not regulated by this law.
There are some several forms of business recognized by the law in Georgia:
- sole proprietorships,
- joint liabilities companies,
- stock companies,
All these forms are considered legal entities.
Also, the partnership activities are regulated by the Law on Entrepreneurs. There are two forms of partnerships: general or limited.
The only forms of business that may have more than 50 partners are the stock companies and the cooperatives.
All the legal entities in Georgia must be recorded in the Public Registry. For all the actions performed before the registration, the founders are directly responsible. A company may begin any commercial activities only after registration.
One of the most important regulations is that, if refunding is necessary in the limited liabilities companies opened in Georgia, stock companies and cooperatives, the founders must record the changes at the Public Registry and modify the company’s chart. This fact is possible only by reducing the authorized capital.
Another rule stipulated by the law is that half of the company’s capital must be deposited when the founders are signing the company’s charter. If a member is not paying its share in the specific period of time, he must receive a notification where is specified the time limit when he can pay its debt. If this time limit is not respected, the member may be excluded from the company. The remaining partners must cover the missing part, after the member is excluded. If the contribution supposes to be in kind, it must be changed into the appropriate cash value.
All the legal entities must operate under a unique name. In case of a partnership, the name must contain at least one name of a general partner.
The management of a limited liability company, stock company and cooperative created in Georgia, is provided by a director. The company’s chart may stipulate that the company may be ruled by a two directors instead of one or by a board of directors.
The managers of the companies are responsible for keeping the company’s books and the recording of these books at the end of every financial year. A financial year cannot exceed the period of twelve months.
There are several documents that must be kept by the managers for more than ten years:
- the accounting documents,
- the business mails,
- organizational documents,
- accounting books,
- balance sheets,
- inventory sheets.
Within the first three months of every financial year, the managers must fill the balance sheet and the annual account of the previous economic year and also the activity report.
A company may be liquidated in Georgia for multiple reasons:
- the end of the company’s availability,
- a court decision based on a request from a creditor,
- if the laws are broken by the company,
- if a decision is taken during a general meeting by the company’s members.
Also, a company may be liquidated very simple if it didn’t issue any shares or didn’t perform any commercial activity.
If the company did raise any shares and performed commercial activities, a liquidator is appointed to make all the necessary arrangements in order to liquidate the company established in Georgia.
For more details about setting up a company in Georgia or liquidating it, you may contact our agents in company formation.