Published on: July 26, 2026
The Law of Georgia on Entrepreneurs establishes the legal framework governing the formation, registration, and management of companies in Georgia. The law applies to various legal forms of business entities, including Limited Liability Companies (LLCs) and Joint Stock Companies (JSCs).
Its primary objective is to create a transparent, modern, and investor-friendly corporate environment. The law regulates company names, shareholder and partner contributions, capital formation, corporate governance, and the responsibilities of management bodies.
Understanding these legal requirements is essential for entrepreneurs, investors, and anyone planning to establish or participate in a business in Georgia.
Table of Contents
- Company Name Selection and Registration
- Limited Liability Company (LLC)
- Joint Stock Company (JSC)
- Shareholder and Partner Contributions
- Director’s Legal Status and Corporate Governance
- Advantages of the Current Legal Framework
Company Name Selection and Registration
One of the first steps in establishing a company is selecting its name.
Under Georgian law, the proposed company name must be unique and must not duplicate the name of an already registered legal entity. If an identical name has already been registered, a new company cannot be incorporated under the same name.
This requirement is intended to:
- Ensure clear identification of legal entities;
- Reduce the risk of confusion between businesses;
- Protect customers and business partners from being misled;
- Promote transparency within the Public Registry.
Limited Liability Company (LLC)
Capital Formation in an LLC
A Limited Liability Company (LLC) is one of the most commonly used and flexible business structures in Georgia.
Partners may contribute to the company’s capital in several different forms.
Capital contributions may include:
Monetary Contributions
Partners may transfer funds directly to the company’s bank account or provide monetary contributions in another agreed manner.
Non-Monetary Contributions
Partners may contribute tangible or intangible assets, including property, property rights, intellectual property, or other assets with economic value.
Work or Services
In an LLC, a partner’s contribution may also consist of agreed work performed or services provided to the company.
LLC Shares and Capital
An LLC may issue:
- Shares with nominal value;
- No-par value shares;
- Or a combination of both.
The subscribed capital may be determined freely by the partners, providing significant flexibility in structuring the company.
The company’s capital must be expressed in the national currency of Georgia — Georgian Lari (GEL).
Joint Stock Company (JSC)
Capital Requirements for a JSC
The Law imposes stricter capital requirements on Joint Stock Companies (JSCs) than on LLCs.
This is because JSCs are generally intended for larger businesses, investment projects, and participation in the capital market.
The principal requirements include:
- Minimum subscribed capital upon incorporation;
- Monetary capital contributions by shareholders;
- Prohibition on contributing work or services as capital;
- Independent valuation of non-monetary assets by a certified auditor;
- Publication of the valuation report through the official electronic registry.
Shareholder Obligations
Shareholders are required to make their agreed capital contributions within the prescribed time limits.
Failure to comply may result in:
- Interest being charged on the outstanding amount;
- Initiation of a share forfeiture procedure;
- Granting the shareholder an additional period to fulfil the obligation;
- Ultimately losing both the shares and any partial contribution already made.
Shareholder and Partner Contributions
The Law of Georgia on Entrepreneurs clearly regulates capital contribution obligations for both LLC partners and JSC shareholders.
Contributions may be:
- Monetary;
- Non-monetary.
Where a non-monetary contribution is made, ownership or the relevant property right must actually be transferred to the company.
A mere promise to contribute an asset is insufficient unless the corresponding ownership or usage rights have legally passed to the company.
Consequences of Failure to Make Contributions
If a partner or shareholder fails to fulfil their contribution obligations, the company may:
- Demand payment of the outstanding contribution;
- Charge statutory or contractual interest;
- Grant an additional period of at least 30 days for compliance;
- Initiate forfeiture of the relevant share;
- Recover the share if the obligation remains unfulfilled;
- Retain any partial contribution where permitted by law and the company’s constitutional documents.
Director’s Legal Status and Corporate Governance
The legal status of a company director plays a significant role in corporate governance.
Under Georgian law, an agreement concluded between a company and its director is generally not regarded as an employment contract.
Accordingly, the director’s rights, duties, remuneration, liability, and termination conditions are determined through an individual agreement, the company’s charter, and applicable legislation.
As a result:
- The relationship between the director and the company is corporate rather than employment-based;
- Labour law protections do not automatically apply;
- The parties have greater flexibility in determining management arrangements;
- The scope of the director’s liability is clearly defined.
Advantages of the Current Legal Framework
The Law of Georgia on Entrepreneurs is intended to strengthen Georgia’s corporate environment and enhance legal certainty for businesses.
Its key advantages include:
- Clear procedures for company formation and operation;
- Stronger protection of shareholder and partner rights;
- Flexible capital structures for LLCs;
- Higher governance standards for Joint Stock Companies;
- Clearly defined corporate management responsibilities;
- Alignment with international best practices and European standards;
- A more reliable legal environment for domestic and foreign investment.
Conclusion
Establishing a company in Georgia involves more than simply registering a legal entity with the Public Registry. It also requires selecting the appropriate legal structure, determining capital contributions, organising corporate governance, and complying with the requirements of the Law of Georgia on Entrepreneurs.
An LLC provides greater flexibility in terms of management and capital, while a JSC operates under stricter legal standards designed to protect shareholders and investors.
A proper understanding of Georgian corporate legislation reduces legal risks, strengthens business stability, and supports successful commercial activities in Georgia.
Looking to Register a Company in Georgia?
If you are planning to establish a company in Georgia, register an LLC or JSC, create a corporate structure, or require ongoing legal support for your business, Chikovani Law Office is ready to assist you throughout every stage of the process.
Our legal team provides assistance with:
- Company registration and incorporation;
- Drafting articles of association and incorporation documents;
- Preparing shareholder and partnership agreements;
- Corporate and commercial law matters;
- Ongoing legal support for businesses;
- Legal services for foreign investors and international companies.
Contact us today for professional legal assistance.
Chikovani Law Office
📍 Tbilisi, Georgia
📞 (+995) 555 15 13 13
Published on: July 26, 2026
