repreneurs (LoE) (Corporate Law)
Under the Law of Georgia on Entrepreneurs the following forms of commercial entities may be established in Georgia:
i. Sole proprietorship - An enterprise operated by a physical person with unlimited liability and no minimum capital requirement. A sole proprietorship is not considered a legal entity under the commercial code of Georgia.
ii. Joint Liability Company - A legal entity with unlimited liability established on the basis of a partnership of several individuals or companies.
iii. Limited Partnership - A legal entity consisting of general and limited partners. The limited partners have limited liability and general partners bear full and direct liability for the obligations of the company.
iv. Limited Liability Company - A legal entity that is separate and distinct from its shareholders (One or more legal or physical persons). The company's liability is limited to its authorized capital. Founders and shareholders are not liable for the obligations of the company.
v. Joint Stock Company - A legal entity characterized by the limited liability of the partners. The company's liability is limited to its authorized capital.
vi. Cooperative - A legal entity characterized by the limited liability of the shareholders. In Georgia, this is a common form of organization for agricult ural enterprises.
Sole proprietorships, joint liability, limited partnerships and cooperatives are rarely established by foreign investors in Georgia. Therefore, the following focuses on the legal requirements for Limited Liability Companies (LLCs) and Joint Stock Companies (JSCs), which are the most popular forms of incorporation used by foreign investors in Georgia.
The Law on Entrepreneurs does not set limitations on the domicile of partners. A partner in a legal enterprise can be a citizen or resident of any country. Foreign companies can be established as fully foreign-owned enterprises or in partnership with Georgian companies or physical persons. In accordance with the Law on the Promotion and Guarantees of Investment Activities of November 12, 1996, companies with foreign investments enjoy national treatment and the same rights as Georgian companies.
Provisions of the Law on Entrepreneurs for Limited Liability Companies (LLC):
В· An LLC can have a maximum of 50 shareholders. The minimum equity capital requirement is 2,000 GEL. The share of the equity capital to be covered by each of the partners may be determined freely, but it must be divisible by 10;
В· At least 50 percent of the equity capital must be paid up at the time of incorporation, with the rem...
