How to Register a Company in Georgia: LLC or JSC

What types of legal entities exist in Georgia?

Georgian legislation offers several types of legal structures for businesses:

• Limited Liability Company (LLC)
• Joint Stock Company (JSC) – open or closed type
• Limited Partnership (LP)
• General Partnership (GP)
• Cooperative
• Individual Entrepreneur (IE)

For foreign businesses, it is also possible to:

• Open a branch
• Establish a subsidiary company

What is a Limited Liability Company (LLC)?

LLC is the most popular and flexible business structure in Georgia, offering:

• Liability limited to the company’s capital (partners are not liable with their personal assets)
• Simple establishment with no initial capital requirements
• Flexible management structure
• Possibility to benefit from preferential tax regimes
• 0% profit tax on reinvested profits (tax is paid only when distributing dividends)
• Possibility of remote registration
• LLC is ideal for small and medium-sized businesses where owners are actively involved in daily operations.

What is a Joint Stock Company (JSC)?

A Joint Stock Company is a form of company whose capital is divided into shares. In Georgia, there are two types of Joint Stock Companies:

Closed Joint Stock Company:

• Share transfers are restricted and typically require the consent of other shareholders
• Shares are not traded on the public market
• Suitable for family businesses or structures consisting of a small number of investors

Open Joint Stock Company:

• Shares are freely bought and sold on the stock exchange
• Greater opportunities for capital raising
• Stricter regulatory requirements and reporting obligations
• Suitable for large companies planning to grow through public investments
• Joint Stock Companies have a more formalized corporate governance structure, including a supervisory board, shareholders’ meeting, and board of directors.

What do LLCs and JSCs have in common?

Despite their differences, LLCs and JSCs have several common characteristics:

• Both are independent legal entities
• Both provide limited liability for owners
• Both can benefit from Georgia’s tax advantages
• Both require registration in the public registry
• Both are obligated to maintain accounting records and financial reporting
• Both can be 100% foreign-owned

How can a partner leave an LLC?

An LLC partner can leave the company in the following ways:

Share transfer – A partner can sell or transfer their share to other partners or third parties. If provided for in the charter, other partners may have the right of first refusal.

Withdrawal from the company (under legally defined conditions) – A partner can request to leave the company and receive compensation for their share if:

• There is a significant reason, such as abuse of rights by major partners
• The partner cannot exercise their rights in the company
• Withdrawal conditions are provided for in the charter

In case of withdrawal, the partner receives the fair value of their share, determined based on valuation or by agreement between partners.

Is the procedure different for Joint Stock Companies?

Yes, the process is different in Joint Stock Companies:

In a closed Joint Stock Company, a shareholder can sell shares, but often requires the consent of other shareholders or they have the right of first refusal, according to the charter.

In an open Joint Stock Company, a shareholder can sell shares at any time on the stock exchange without the consent of other shareholders. The process is much simpler and is carried out through a broker.

Joint Stock Companies do not provide for the concept of “withdrawal from the company” as in the case of an LLC. Shareholders can only sell their shares.

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What are the peculiarities of LLC and JSC registration?

LLC registration:

• Selecting and verifying the company name
• Preparing founding documents:
  • Founding agreement
  • Charter
  • Decision on appointment of director(s)
• Confirmation of legal address
• Submission of documents to the public registry
• Payment of registration fee
• Opening a bank account

JSC registration (additional requirements):

• Determining the minimum amount of capital
• Determining the types and number of shares
• Formation of a supervisory board (if necessary)
• Establishing corporate governance rules
• Registration can be completed in 1 business day, or on the same day through an expedited procedure by paying an additional fee.

Motivation for company registration in Georgia

Currently, registering a company in Georgia has become even more attractive due to the following factors:

• Improved electronic services – the possibility of fully digital remote registration
• Strengthened ties with the European Union – free trade agreements that expand market access
• New tax benefits – additional tax incentives for specific sectors
• Simplified investment regulations – reduced barriers for foreign investors
• Special regimes for digital businesses – expanded virtual zone opportunities for IT companies
• Expanded conditions for international company status – additional business areas that qualify for preferential regime

Management of the company registry

In Georgia, the company registry is managed by the National Agency of Public Registry. All registered companies are required to:

• Update information in case of any change in registered data (address, directors, charter, capital, etc.)
• Submit annual financial reports (according to company size)
• Keep mandatory company documentation (charter, legal acts, accounting documents)
• Update information about beneficial owners in cases provided by law

Any change in company data must be registered with the public registry in accordance with the deadlines established by law.

Peculiarities of Joint Stock Company management

Joint Stock Companies have a more complex management structure:

For open Joint Stock Companies:

• Mandatory supervisory board (minimum 3 members)
• Regular reporting obligations to the stock exchange and regulator
• Obligation to submit audited financial statements
• Disclosure of information about significant events
• Stricter corporate governance rules

For closed Joint Stock Companies:

• Can function without a supervisory board
• Fewer public reporting requirements
• More flexibility in internal corporate decision-making

In both types of Joint Stock Companies, decisions are made at the general meeting of shareholders according to the number of votes, which is determined by the number of shares.

Business registration in Georgia is a simple and fast process, accessible to both local and foreign entrepreneurs. Choosing the right form of company and properly conducting the establishment process is the first step to creating a successful business. Consider your business goals, volume, and specifics to make the right decision.