Legal Entities in Georgia
Law of Georgia on Enterpreneurs, regulates the legal forms of the subjects of entrepreneurial activity. The following are the types of legal entities offered by the law:
Joint-Stock Company (JSC) – JSC is a legal entity the charter capital of which is divided into shares of equal nominal value. There are two types of shares applicable in the JSC, namely ordinary shares and privileged shares. The shareholders of the JSC may increase the capital of the company through issuing additional shares. The share amounts to a security certifying the claim of a shareholder in relation to the property of the JSC. The liability of a JSC is limited to its total assets. Shareholders are not liable for obligations of the JSC vis-à-vis the third parties.
Limited Liability Company (LLC) – Limited Liability Company, as it is very quick and easy to form. They have a less complicated organizational and management structure in which there is no shareholder(s)’/Director(s)’ personal liabilities involved. It can be established by a single founder, whether it is physical person or legal entity, with full flexibility of local or foreign (or mixed) ownership and share distribution. There are no restrictions regarding the number of directors and there is no minimum initial capital enrolment required.
General Partnership (GP) 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.
Limited Partnership (LP) 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 payment of a fixed guarantee amount – limited partners (komandits) and the liability of other partners is not limited – general partners (komplementars).
Cooperative (CO) shall be a company based on the labour 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.
Individual Enterprise (IE) – IE is the form of the entrepreneurial activity in Georgia. As the owner of an enterprise, an individual entrepreneur is a physical person whose entrepreneurial activity shall be conducted in an entrepreneurial manner. In legal relations such person shall act on its own behalf.
