For years, Georgia has positioned itself as one of the most business-friendly countries. This is due to its streamlined registration procedures, low administrative barriers, and legislation that aligns closely with European standards.
However, the speed of registration should not imply that the decision regarding the legal form can be made lightly. Choosing the correct organizational-legal structure significantly affects partner liability, investment strategy, and the company’s growth potential.
The following legal forms are available for registration in Georgia:
- Individual Entrepreneur (IE)
- Limited Liability Company (LLC)
- Joint Stock Company (JSC)
- General Partnership (GP)
- Limited Partnership (LP)
- Cooperative
1. Individual Entrepreneur (I.E.)
The Individual Entrepreneur (I.E.) is the simplest legal form for launching a small-scale or seasonal business activity in Georgia. Registration is carried out at the Public Registry using only a personal identification document, and the entrepreneur’s personal number serves as their taxpayer identification number (TIN).
Advantages:
- Fast and simple registration process
- Minimal bureaucracy and straightforward procedures
- Eligibility to register as a micro or small business, offering tax incentives
Tax Regimes for Micro and Small Businesses:
- Micro Business: Annual turnover does not exceed GEL 30,000; exempt from profit and income tax (0%)
- Small Business: Annual turnover does not exceed GEL 500,000; subject to 1% income tax (on gross revenue only)
Limitation: The entrepreneur is personally liable for all business obligations, including with their private assets.
To mitigate such risks, many individuals opt for the Limited Liability Company (LLC) structure, where partners are liable only within the amount of their contributions to the company.
2. Limited Liability Company (LLC)
The most popular legal form in Georgia – flexible, easy to register, and attractive to investors.
Key Features:
- May be established by a single person or multiple partners
- No minimum capital requirement
- Share classes, restrictions, values, and rights can be defined
- The charter may specify an authorized capital, allowing for easier issuance of additional shares in the future
- Suitable for startups and fast-growing businesses
3. Joint Stock Company (JSC)
Typically used when a business seeks to attract investors through the issuance of shares or plans to go public.
Key Features:
- Mandatory definitions of placed, paid-in, and authorized capital
- Minimum placed capital: 100,000 GEL, of which at least 25,000 GEL must be paid at incorporation
- The charter must detail the terms of share issuance
- Shareholders do not participate in management and are liable only up to the value of their shares
In case of non-monetary contributions, the charter must include:
- Type of contribution
- Contributing party
- Nominal value of the shares issued in return
4. General Partnership (GP)
Structurally similar to an LLC, but each partner is fully and jointly liable for the company’s obligations.
Key Features:
- The governing body is the partners’ meeting
- The company name must include a reference to at least one partner
- Written agreement between partners is required for registration
- Due to the high level of risk, this form is rarely used in practice
5. Limited Partnership (LP)
Consists of two types of partners:
- General Partner – manages the business and is personally liable for its obligations
- Limited Partner – does not participate in management and liability is limited to a predetermined guarantee amount
Additional Features:
- General partner holds full authority
- Limited partner has rights to oversight and access to information and may represent the company by proxy
- The company name must include the “LP” designation and reference at least one partner
6. Cooperative
Formed by members pursuing a shared economic goal, based on labor cooperation.
Key Features:
- Not oriented toward profit
- Commonly used in agriculture and small local production
Steps for Registration
- Drafting the charter and, if needed, a partnership agreement
- Registering with the Public Registry
- Providing a consent letter from the director
- Publishing legal form and company data on an official letterhead and website
- Obtaining additional licenses/approvals if necessary (e.g., from the National Bank of Georgia)
Mandatory Elements of the Charter
- Legal form
- Scope of activity
- Restrictions on share ownership
- Authority of directors
- Number and distribution of shares
Conclusion
The success of a business often starts with choosing the right legal form.
While registration in Georgia is straightforward, poorly drafted charters, unstructured partnerships, or vague terms can lead to costly and prolonged legal disputes.
Therefore, before registration:
- Define a shared vision and responsibilities
- Agree on clear operational rules
- Prepare a well-drafted, legally sound charter
Only then should you choose the legal form that aligns with your business goals, risk tolerance, and growth strategy.
Need consultation or help with registration?
Orson offers end-to-end support, from selecting the appropriate legal form and drafting the company charter, to registering the company in the public registry and preparing legal documentation, including contracts, internal regulations, employment agreements, personal data protection policies, and other documents related to entrepreneurial activities.